Ásar (SIMINN) Q4 2023 earnings summary

Executive summary

• FY23 revenue rose 4.8% to ISK 25.741bn; adjusted EBITDA increased to ISK 6.150bn, while EBIT fell to ISK 2.079bn.

• Q4 revenue and adjusted EBITDA grew YoY, with adjusted EBIT also higher; subscription revenue drove roughly two-thirds of revenue growth.

• 2024 guidance calls for EBITDA of ISK 6.4–6.7bn, EBIT of ISK 2.5–2.8bn and CAPEX of ISK 3.2–3.5bn.

Financial highlights

• Q4 revenue was ISK 6.659bn, up 6.8% YoY; FY23 revenue was ISK 25.741bn, up 4.8%.

• Q4 adjusted EBITDA was ISK 1.614bn, up nearly 13% YoY excluding the ISK 200m competition-fine item in Q4 2022; adjusted EBIT rose 26% to ISK 634m.

• FY23 EBITDA was ISK 6.150bn versus ISK 5.949bn in 2022; EBIT was ISK 2.079bn versus ISK 2.745bn.

• FY23 operating cash flow was ISK 4.853bn versus ISK 7.240bn; cash generated by operations was ISK 5.612bn versus ISK 8.134bn.

Outlook and guidance

• 2024 revenue growth is expected across core products, while fixed-line revenue is expected to fall significantly; considerable profit growth is forecast.

• 2024 guidance: EBITDA ISK 6.4–6.7bn, EBIT ISK 2.5–2.8bn and CAPEX ISK 3.2–3.5bn, excluding licences and spectrum.

• CAPEX is expected to decline, mainly on lower TV-rights investment; telecom infrastructure investment is expected to increase.

• Depreciation is expected to remain relatively high in 2024 due to 2022–23 TV-rights investment, but decline from its 2023 peak.