Sýn hf.: Growth in telecommunication and media

 Sýn hf.‘s Condensed Consolidated Interim Financial Statement for the first half of 2021 was approved by the board of directors on September 1st 2021.

Main results:

• Revenue for the second quarter (Q2) of 2021 amounted to ISK 5,289M, a decrease of ISK 98M compared to the same period in 2020. Revenue for the first half (1H) of 2021 amounted to ISK 10,289M, a decrease of 1.2% compared to 1H 2020. This decrease can mainly be traced to a 650M decrease in revenues of Endor.

• EBITDA for Q2 2021 amounted to ISK 1,488M, compared to ISK 1,364M in Q2 2020. The EBITDA margin was 28.1% in Q2 2021 compared to 25.3% in Q2 2020. EBITDA for 1H 2021 amounted to ISK 2,876M, a 5.8% increase compared to the same period in 2020.

• Loss in Q2 2021 amounted to ISK 117M compared to ISK 60M in Q2 2020. Loss for 1H 2021 amounted to ISK 348M compared to ISK 410M in 1H 2020. A loss of ISK 179M was recognised in 1H 2021 in relation to the sale of the Company‘s share in its Faroese associate Hey.

• Cash generated by operations in Q2 2021 amounted to ISK 1,431M compared to ISK 1,744M in Q2 2020, a decrease of 18%. Cash generated by operations in 1H 2021 amounted to ISK 1,975M compared to ISK 2,799M in 1H 2020, a decrease of 29%.

• Total investments in 1H 2021 amounted to ISK 643M, thereof ISK 592M in property, plant and equipment and intangible assets (excluding broadcasting license rights) and ISK 1,117M in broadcasting license rights. Sales proceed from the sale of the Company‘s Faroese associate Hey amounted to ISK 1,065M.

• Negative cash flow from financial activities for 1H 2021 amounted to ISK 1,748M compared to ISK 1,445M in 1H 2020. Sales proceeds from the sale of Hey was used to pay down debt and decrease credit lines.

• The equity ratio was 28.5% at the end of 1H 2021.

• On March 31st, an agreement was signed for the sale of passive infrastructure in the Company’s mobile network. The sale is expected to be approved by the competition authority in the next few days. The proceeds will be used partly to pay down debt, repurchase shares and new investments.

Heiðar Guðjónsson CEO:

“Our core business continues to improve as can be seen by the increase in free cash flow (ISK 1,611M), which I think is the best indicator of our performance. Free cash flow has been completely transformed from the year 2018 and 2019 (ISK -143M and ISK 720M).

This is the first quarter since 2018 that we experience growth in our telecommunication business. Last year I stated that we will be utilizing our networks more efficiently and this growth is not spurred by increased investments. We have gained many subscribers in our media business and seen an increase in the sale of advertising. By making Stöð 2 exclusively available to subscribers we saw an increase in subscriptions by thousands without a big impact on advertising revenue. Stöð 2 Sport and Stöð 2+ have never been more popular. Vísir our web portal continues to increase its lead on other media, every week. We are now developing new content behind a paywall on Vísir, for instance Blökast and a new business media where Hörður Ægisson and Ólöf Skaftadóttir are editors. Vísir has great potential to become a central gateway for Icelandic content and services.

Turnover at Endor lowered by 650 million partly due to the pandemic but the long-term outlook for the business is good. The pandemic is impacting our business less and less.

Our biggest investment over the last quarters has been in our IT systems which made the Fjölskyldupakki offer possible at the close of the first quarter. We will launch new exciting products over the next few quarters since our reach is big, with half of households holding subscriptions to our products and close to half of all companies.

We are waiting for the approval of the ICA for the sale of passive infrastructure in our mobile network, which we expect in a few days. The proceeds will be used partly to pay down debt but also for repurchasing shares and new investments.”

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