HT achieved a revenue growth of 6.2 percent in the first half of 2023

Hrvatski Telekom recorded a revenue growth of 6.2 percent in the first half of 2023 based on positive business developments, which is the result of revenue growth in the business and private user segments.

As stated in the press release, despite double-digit inflationary pressures on the cost base, thanks to the continued transformation of the operational model and efficiency enhancement initiatives, the growth of operating costs was kept at 6.7 percent compared to the same period last year, which, together with strong business momentum, contributed to a 1.8 percent growth in adjusted EBITDA AL in the same period.

Net profit of 53.3 million euros is close to pre-pandemic levels, largely supported by non-operating items and results from Montenegro.

Total investments, including radio frequency spectrum, amounted to 233.1 million euros (+126.4 percent YoY), representing the largest investments in the market and reflecting HT’s ongoing commitment to enabling a platform for national digitalization and future business growth.

By further investing in infrastructure development across Croatia, HT has solidified its status as the leading network.

By securing the largest share of the spectrum at the auction for existing frequencies, combined with the largest share in the 5G spectrum won two years ago, HT has ensured that users enjoy the best mobile network experience in the coming years. At the same time, for the fifth consecutive year, HT has won the Ookla Speedtest award for the best and fastest mobile network, achieving the best result ever recorded in Croatia.

During the first six months of 2023, HT continued to expand its optical network (FTTH), the only true gigabit technology, increasing the largest FTTH network in Croatia by an additional 19 percent compared to the same period last year, bringing them closer to achieving their ambition of covering more than one million households with fiber optics, based on investments in digitalization across Croatia, in urban and rural areas.

HT has continued to systematically invest in employees, resulting in the highest levels of employee engagement and satisfaction, which has also reflected in the highest customer satisfaction ever recorded.

Initiated the takeover of the technology unit for construction and maintenance from ENTS

Hrvatski Telekom has decided to take back the technology unit for the construction and maintenance of the HT network from Ericsson Nikola Tesla Servisi (ENTS), which has been separated into the mentioned company since September 2014 and has performed tasks for Hrvatski Telekom in the domain of providing construction and maintenance services for electronic communication infrastructure.

HT will thus have all strategic business segments within the company. This change follows industry trends and will further accelerate the transformation of HT’s operational model, improve business flexibility, and create conditions for further development of fixed and mobile networks, while also providing even better and faster service to customers.

Ten-year contract for the supply of electricity from renewable sources

Hrvatski Telekom and Liburana, 100 percent owned by Professio Energia, have concluded a virtual corporate agreement for the supply of electricity from renewable sources (Virtual Power Purchase Agreement – vPPA), which represents an important milestone in HT’s energy strategy and confirms HT’s commitment to responsible and proactive management on the path to a sustainable future. The electricity from renewable sources, in the amount of 50 GWh annually, will be produced by a wind farm that will be built at the location Mazin Gračac.

The first corporate vPPA in Croatia represents a significant structural energy transition and an important step in meeting a significant part of HT’s annual electricity needs from renewable sources, while also directly contributing to the achievement of ambitious ESG goals.

Attractive capital return program for shareholders

HT’s capital allocation strategy clearly demonstrates Hrvatski Telekom’s strong focus on returns for shareholders and our intention to return value to shareholders.

At the General Assembly on May 10, 2023, the Management and Supervisory Board confirmed a joint proposal for the distribution of net profit for 2022. The amount of 1.10 euros per share represents a dividend payout ratio relative to the Company’s profit of 93.9 percent and a growth of 3.6 percent compared to the previous year.

In the first half of 2023, Hrvatski Telekom repurchased an additional 216,286 shares of the Company on the Zagreb Stock Exchange under the current Share Buyback Program and paid an equivalent value of 5.4 million euros for the acquisition of the Company’s shares during the reporting period.

The Management currently expects a minimum dividend of 0.80 euros per share for 2023.

Unchanged outlook for 2023.

In 2023, the goal is low single-digit revenue and EBITDA growth after leases, with a mid-single-digit decrease in capital expenditures after leases compared to 2022 (excluding spectrum investments). The outlook for regional expansion remains unchanged as HT continues to monitor and assess potential acquisition and takeover activities.

Reflecting on the business results for the first half of 2023, Kostas Nebis, President of the Management Board of Hrvatski Telekom, stated:

– In the first six months of 2023, we continued to achieve good business results in both the private and business user segments, with revenue and EBITDA growth mitigating inflationary pressures on our operating costs. At the same time, compared to the same period last year, we more than doubled our investments, which are crucial for the digitalization of Croatia and of vital importance for the country’s progress. With the largest investments in the industry, Hrvatski Telekom has strengthened the foundations for future sustainable growth and confirmed its status as the leading fixed and mobile network. Further improvements in the quality of our network and increased coverage of the gigabit 5G network have resulted in winning Ookla awards for the best and fastest mobile network for the fifth consecutive year. By continuing to build the largest optical network in urban and rural areas, we are ushering households and businesses across Croatia into the gigabit era, and we remain committed to plans to cover more than one million Croatian households with fiber optics. The transformative power of digitalization enables economic growth and social development, and with the networks we are building, which are the backbone of digitalization, we continue to create opportunities for the advancement of Croatia.