DNA’s net sales and EBITDA reach record levels in 2019, driven by strong mobile service revenue
This is a summary DNA’s Financial Statements Bulletin 2019. The complete report is attached to this release and also available at www.dna.fi/investors.
Summary
Unless otherwise stated, the comparison figures in brackets refer to the corresponding period in the previous year (reference period). Figures are unaudited. The impact of IFRS 16 on the statement of financial position and income statement is presented in Note 12.
In
October–December 2019
- Net sales increased 2.3% and amounted to
EUR 242.4 million (236.9 million). - Mobile service revenue grew 6.6% and was
EUR 123.6 million (116.0 million). - EBITDA increased 10.7% and was
EUR 72.4 million (65.4 million), or 29.9% (27.6%) of net sales. - The comparability of the operating result in the reference period was affected by a non-recurring expense item of
EUR 3.1 million . - The operating result decreased 8.4% and was EUR 26.1 million (28.4 million). The operating result as a percentage of net sales was 10.8% (12.0%).
- The comparable operating result increased 2.6% and came to
EUR 29.2 million (28.4 million). - IFRS 16 had a positive effect on EBITDA in the quarter and an insignificant impact on the operating result (Note 12).
- Earnings per share was
EUR 0.14 (0.16). - Revenue per user (ARPU) for mobile communications decreased 0.6% and was
EUR 18.7 (18.9). - The mobile communication subscription turnover rate (churn) increased and was 17.5% (14.8%).
- In December, DNA applied to delist its shares from the official list of Nasdaq Helsinki.
January–December 2019
- Net sales increased 3.3% and amounted to
EUR 942.1 million (911.8 million). - Mobile service revenue grew 7.0% and was
EUR 486.4 million (454.4 million). - EBITDA increased 7.2% and was
EUR 305.6 million (284.9 million), or 32.4% (31.2%) of net sales. - Comparable EBITDA increased 8.8% and came to EUR 309.9 million (284.9 million).
- In the review period, the comparability of EBITDA was affected by non-recurring expense items of
EUR 4.3 million in relation to business restructuring. - The comparability of the operating result was affected by non-recurring items of
EUR 7.4 million . - The operating result decreased 3.7% and was EUR 133.7 million (138.9 million). The operating result as a percentage of net sales was 14.2% (15.2%).
- The comparable operating result increased 1.6% and came to
EUR 141.1 million (138.9 million). - IFRS 16 had a positive effect on EBITDA in the review period and an insignificant impact on the operating result (Note 12).
- Operating free cash flow increased 12.3% and was EUR 169.6 million (151.0 million).
- Earnings per share was
EUR 0.75 (0.77). - The mobile communication subscription base shrank 1.9%, totalling 2,822,000 (2,877,000).
- Revenue per user (ARPU) for mobile communications remained constant at
EUR 18.7 (18.7). - The mobile communication subscription turnover rate (churn) also remained constant at 16.2% (16.2%).
- The fixed-network subscription base (voice, broadband, and cable television) grew 7.7% to 1,241,000 subscriptions (1,152,000).
- At the time of the publication of the Financial Statements Bulletin, DNA’s Board of Directors has not made a decision on a proposal to the Annual General Meeting on the possible distribution of a dividend per share.
DNA’s guidance for 2020
DNA has changed the way it issues guidance on future outlook, and it will not issue guidance on its net sales and EBITDA for 2020. DNA expects competition to remain strong in 2020. Nonetheless, DNA’s business is anticipated to develop favourably. DNA’s financial position and liquidity are expected to remain at a healthy level.
Key figures
Figures are unaudited.
EUR million | 10–12/2019 | 10–12/2018 | Change (%) | 1–12/2019 | 1–12/2018 | Change (%) |
Net sales | 242.4 | 236.9 | 2.3 | 942.1 | 911.8 | 3.3 |
EBITDA | 72.4 | 65.4 | 10.7 | 305.6 | 284.9 | 7.2 |
% of net sales | 29.9 | 27.6 | 32.4 | 31.2 | ||
Comparable EBITDA | 72.4 | 65.4 | 10.7 | 309.9 | 284.9 | 8.8 |
% of net sales | 29.9 | 27.6 | 32.9 | 31.2 | ||
Depreciation, amortisation, and impairment | 46.3 | 37.0 | 171.9 | 146.0 | ||
Operating result, EBIT | 26.1 | 28.4 | –8.4 | 133.7 | 138.9 | –3.7 |
% of net sales | 10.8 | 12.0 | 14.2 | 15.2 | ||
Comparable operating result | 29.2 | 28.4 | 2.6 | 141.1 | 138.9 | 1.6 |
% of net sales | 12.0 | 12.0 | 15.0 | 15.2 | ||
Net result before tax | 24.0 | 26.3 | –8.7 | 124.6 | 127.7 | –2.4 |
Net result for the period | 19.0 | 21.2 | –10.4 | 98.8 | 102.2 | –3.3 |
Return on investment (ROI), % | 9.3 | 11.5 | 12.1 | 14.1 | ||
Return on equity (ROE), % | 13.9 | 14.2 | 17.1 | 16.4 | ||
Capital expenditure | 74.2 | 53.7 | 38.1 | 158.7 | 138.3 | 14.8 |
Cash flow after investing activities | 3.3 | 10.5 | –68.5 | 60.6 | 63.4 | –4.6 |
Free cash flow to equity | 88.5 | 72.0 | ||||
Net debt | - | - | 559.1 | 379.3 | ||
Net debt/EBITDA | 1.93 | 1.45 | 1.83 | 1.33 | ||
Net gearing, % | - | - | 101.4 | 62.7 | ||
Equity ratio, % | - | - | 38.8 | 46.9 | ||
Basic earnings per share, EUR | 0.14 | 0.16 | 0.75 | 0.77 | ||
Diluted earnings per share, EUR | 0.14 | 0.16 | 0.75 | 0.77 | ||
Personnel at end of period | - | - | 1,624 | 1,590 |
CEO’s review
Once again, DNA has fared well in a challenging market environment. Net sales for January–December increased 3.3% and amounted to
Competition intensified further during the last quarter of the year. Even so, both our growth and profitability showed a positive trend. Net sales increased 2.3% year-on-year and amounted to
Our mobile communication subscription base decreased by 55,000 in the October–December period, due to a decrease in prepaid subscriptions. Our postpaid subscription base increased by 37,000. Revenue per user (ARPU) decreased slightly from the reference period to
We are in the process of launching the sales of 5G subscriptions to consumer and corporate customers. In early 2020, DNA’s 5G network will be available in more than 20 locales. Customers using 5G subscriptions benefit from higher speeds and lower latency. The benefits of 5G and its positive impact on customer experience will become more evident as customers use increasingly rich content, higher resolution videos, and services such as online gaming, where low latency is critical. In December, we launched the sales of our 5G Fixed Wireless Access service. The solution provides super-fast connections in areas where fibre-optic connections are not available or would be very expensive to build. We will continue to improve and expand our 4G network parallel to the 5G investments.
In August, Norwegian telecommunications group Telenor acquired a 54% stake in DNA and became the main shareholder. After the completion of the transaction and the resulting mandatory public tender offer, Telenor’s holding of DNA shares was 97.87%. Telenor then commenced mandatory redemption proceedings for the remaining shares, following which DNA submitted an application to Nasdaq Helsinki in December, requesting the termination of public trading in DNA’s shares and the delisting of DNA’s shares from the official list of Nasdaq Helsinki. Delisting of DNA share is possible once Telenor has the right to obtain title to all DNA’s minority shares, which is expected to take place in early 2020.
We will continue the long-term development of our business, focusing on customer experience, personnel satisfaction, and the resulting profitable growth. We expect our business to develop favourably in 2020.
CEO
Additional information:
Marja Mäkinen, Head of IR,
DNA is one of the leading telecommunications companies in
Attachment
- DNA Financial Statements Bulletin 2019
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