Telekom Austria (TKA) Q2 2024 earnings summary

Executive summary

• Total revenues increased by 1.3% in Q2 and 1% in H1 2024, driven by 3.9% service revenue growth, while equipment revenues declined by 13.4% year-over-year.

• EBITDA rose 3.8% in Q2 and 4% in H1, with margin improving to 38.3%; adjusted EBITDA up 8.3% in Q2, excluding one-offs, restructuring, and FX effects.

• Free cash flow surged 42% in H1 2024, mainly due to lower CAPEX and improved operational results.

• Dividend of €0.36 per share for FY 2023 approved and paid in July 2024; S&P confirmed A- credit rating in May 2024.

• Net result declined 11.9% in Q2 and 12.5% in H1 due to higher D&A post tower spin-off, but increased on a pro forma basis.

Financial highlights

• Q2 2024 service revenues: €1,124mn (+3.9% yoy); equipment revenues: €168mn (-13.4% yoy); total revenues: €1,316mn (+1.3% yoy).

• H1 2024 total revenues: €2,583mn (+1.0% yoy); EBITDA: €959mn (+4.0% yoy); EBIT: €396mn (-9.1% yoy); net result: €263mn (-12.5% yoy).

• EBITDA margin improved to 38.3% in Q2 and 37.1% in H1.

• Free cash flow after social plans: €175mn in H1 2024, up 42.1% year-over-year.

• Capital expenditures dropped 31.2% in Q2 and 20.8% in H1, mainly from lower spectrum investments.

Outlook and guidance

• 2024 guidance confirmed: total revenue growth of 3-4% and CAPEX (excluding spectrum and M&A) around €800mn.

• Fiber rollout in Austria to continue at unchanged pace; non-critical projects under review.

• Ambition for 2024-2026: annual revenue growth of 3-4%, EBITDA growth of 4-5%, and CAPEX of €2.8bn plus frequencies.