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Síminn hf. - Revenue growth and strong performance

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Financial highlights Q2 2021

  • Síminn‘s revenue amounted to ISK 6,352 million in the second quarter (Q2) of 2021, compared to ISK 6,214 million in the same period 2020. An increase by ISK 138 million or 2.2%.

  • EBITDA amounted to ISK 2,557 million in Q2 2021, compared to ISK 1,800 million in the same period of 2020, up by ISK 757 million or 42.1%. If ISK 500 million administrative fine in Q2 2020 is taken into account EBITDA is ISK 2.300 million. The EBITDA ratio was 40.3% in Q2 2021, compared to 29.0% in the same period of 2020. EBIT amounted to ISK 1,126 million in Q2 2021, compared to ISK 335 million in the same period of 2020.

  • Net profit in Q2 2021 amounted to ISK 618 million, compared to ISK 83 million in the same period of 2020.

  • Cash generated by operation amounted to ISK 2,717 million in Q2 2021, compared to ISK 2,905 million in the same period of 2020. Net cash from operating activities amounted to ISK 2,424 million in Q2 2021, compared to ISK 2,481 million in the same period 2020.

  • Interest-bearing debt including lease liabilities amounted to ISK 32.9 billion at the end of Q2 of 2021, compared to ISK 21.5 billion at the end of 2020. Net interest-bearing debt including lease liabilities amounted to 25.9 billion ISK at the end of Q2 2021 compared to 20.8 at the end of 2020.

  • Net financial expenses amounted to ISK 315 million in Q2 2021, compared to ISK 185 million in the same period of 2020. Financial expenses amounted to ISK 349 million, financial income ISK 57 million, and foreign exchange loss ISK 23 million.

  • Síminn's equity ratio was 44.7% at the end of Q2 2021 and equity was 31.1 billion.


Orri Hauksson, CEO:

“We are satisfied with the result for the quarter, which was considerably better than at the same time last year. Revenue, EBITDA, EBIT and cash flow increase between years. A large part of the increase is due to events in the second quarter of last year, when Síminn was fined by the Competition Authority in addition to significant layoff costs. Adjusted for these factors, however, there is still a positive development in all aspects of the operation.

The operations in the quarter were also characterized by many actions, which were only partially reflected in the financial figures. Refinancing and a change in the division of tasks within the group was completed during the period. We refinanced previous loans, returned considerable funds to shareholders, and issued commercial paper listed on the Stock exchange for the first time. The Radio Access Network and IP Network were transferred from Síminn to Míla, in accordance with previous plans and announcements.

In May, a major milestone was reached when 100,000 homes could connect to Míla‘s fiber network. Thus, the number of homes in the country that do not have access to fiber in their homes is steadily decreasing. However, there are still many urban areas in the countryside where fiber rollout is needed. This will be dealt with as soon as the regulatory framework for the investments becomes more sensible.

The operational security of telecommunications is important all over the world but needs more attention in Iceland than in many other countries. Most people remember the power outages due to storms in the winter of 2019-2020, which put telecommunications out in large areas of the country. In the second quarter of 2021, lava flowed over the main fiber cable at Nátthagi, but all communications were connected to a new cable that runs along Suðurstrandarvegur. Thankfully, this did not disrupt telecommunications. This summer, a new 200 gigabit trunk connection was installed across the country with a new highland route. The DWDM system over Míla’s trunk network is also being updated, but this system is one of the most important pillars of telecommunications in the country. The same goal is behind all these projects, to preserve and strengthen the security of telecommunications in Iceland.

The future possibilities of Míla as an independent company are still under consideration, with guidance of the investment bank Lazard and Íslandsbanki. As announced in April, changes in ownership of Míla is possible, but nothing has been decided yet. Domestic and foreign investors have shown interest in the company and next steps are discussions with some of them. The winter will be used to complete the future strategy for Míla.

Several important milestones have been reached for Síminn's customers. Míla’s upgrade and development of 5G transmitters for Síminn is proceeding according to plan and 5G will be opened for traffic this autumn. Síminn now provides internet services on all fixed line networks in the country, after an agreement with Gagnaveita Reykjavíkur came into effect recently. Síminn's TV service was made even more flexible than before. For several years, it has been possible to subscribe to Síminn’s TV services over all fixed line and mobile networks in the country. A change has now been made that you do not necessarily have to use a set-top box. Some customers immediately took advantage of the change, but most of them still want to use the same setup as before. Experience shows that changes of this nature take several years when new ways of using a service are offered but the use of previous technology is not discontinued at the same time.

In the second quarter, we extended our TV rights to the English Premier League until the spring of 2025. Delivery of foreign content to television viewers around the world is currently undergoing major changes and is being carried out more directly over the internet via the TV apps of the content producers themselves. The result regarding the English Premier League therefore provides a solid ground for our TV service in coming years. Agreements we have with foreign film studios and increased Icelandic production will also provide a strong framework for this important service.“

Investor meeting 1 September 2021
An investor presentation will be held on Wednesday 1 September 2021 at 8:30 am at Síminn‘s headquarters in Ármúli 25, Reykjavík. During the meeting, Orri Hauksson CEO and Óskar Hauksson CFO will present the financial results. The meeting will be held in Icelandic. Documents for the meeting are available in Nasdaq‘s Iceland company news and on the company’s investor relations website https://www.siminn.is/umsimann/uppgjor
The meeting is webasted on: https://www.siminn.is/fjarfestakynning

Further information
Orri Hauksson, CEO, tel. 354 550 6003 (orri@siminn.is)
Óskar Hauksson, CFO, tel. 354 550 6003 (oskarh@siminn.is)

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