Rai Way (RWAY) Q2 2024 earnings summary

Executive summary

• Core revenues for the first half of 2024 rose 1.2% year-over-year to €137.6 million, driven by inflation-indexed contracts, regional broadcast services, and growth in tower hosting and broadcasting services.

• Adjusted EBITDA increased 3.0% year-over-year to €93.5 million, with margin improving to 68.0%, supported by cost control, higher capitalized personnel, and cost rationalization.

• Net income grew 5.2% to €47.2 million, reflecting improved operating performance and cost efficiencies.

• Five Edge data centers were completed in major cities, now operational and ready for commercialization, with a commercial partnership signed with Oracle.

• Organizational restructuring created three divisions: broadcasting and media, infrastructure, and data center network, to support diversification and new markets.

Financial highlights

• Revenues rose 1.2% year-over-year to €137.6 million in the first six months, with both media distribution and digital infrastructure segments growing.

• Adjusted EBITDA reached €93.5 million (+3.0%), with margin at 68.0%, up 120 basis points from H1 2023.

• Net income increased 5.2% to €47.2 million.

• Free cash flow to equity reached €64 million, up 3.5% from 2023.

• Net financial debt increased to €145.9 million, with Net Debt/Adjusted EBITDA at 0.80x as of June 30, 2024.

Outlook and guidance

• Full-year 2024 adjusted EBITDA growth is confirmed, supported by CPI-linked contracts, regional refarming, and DAB network contributions.

• Growth is tempered by lack of energy tax credits and higher infrastructure costs, but offset by OpEx reductions and non-recurring positive factors.

• Maintenance and development CapEx are expected in line with previous year, with development focused on diversification and third-party/internal projects.

• Edge data center commercialization has just started, with limited revenue impact expected in 2025 and fill factor ramping up over 3-4 years.