NOS SGPS (NOS) Q2 2024 earnings summary

Executive summary

• Strategic execution and operational discipline drove robust Telco performance in both B2C and B2B, with best-in-class service quality and positive operational momentum.

• Consolidated revenue grew 4.7% year-over-year in 2Q24, led by Telco, while Media & Entertainment underperformed due to fewer blockbuster movies.

• Net income rose 77.2% year-over-year to €80.7 million, including a €30.6 million after-tax gain from the sale of a tower portfolio.

• Free cash flow increased by €99.2 million, supported by operational performance and non-recurring effects from tower sales and activity fees.

Financial highlights

• Consolidated revenues rose 4.7% year-over-year to €412.2M, with Telco segment revenue up 6.1%.

• EBITDA AL increased 3.8% to €156.5M, with Telco EBITDA AL up 6.1% year-over-year.

• Net income grew by €35 million mainly due to a one-off tower sale, with total net income at €80.7M.

• CAPEX declined 5.1% year-over-year to €93.1M, reflecting lower network expansion investments.

• Return on capital employed reached 12.7%, a 2.2 percentage point increase year-over-year.

Outlook and guidance

• Expectation to maintain current momentum in revenue and EBITDA AL trends for the rest of the year, with further expansion in fixed and mobile coverage and reinforcement of 5G leadership.

• CapEx is expected to continue its downward trend as 5G rollout phases out.

• Ongoing optimization of cost structure to contain inflationary pressures.

• Media & Entertainment expected to improve in 2H24 with a stronger lineup of blockbuster movie releases.

• Financial costs expected to stabilize as interest rates plateau.