Cyfrowy Polsat capital group revenues in the second quarter of 2024 amounted to PLN 3.45 billion, an annual growth of 5%. from PLN 3.29 billion. The vast majority of the holding’s business continues to be telecommunications, pay television and advertising on TV and the Internet.
Quarterly retail revenues from individual and corporate customers (mainly for telecommunications and pay-TV services) increased year-on-year from PLN 1.73 to PLN 1.78 billion. However, wholesale revenues (including advertising and sponsorship, interconnections, infrastructure rental, roaming, TV operators and licenses, sublicenses and property rights) decreased from PLN 859 to 848.2 million, and those from equipment sales (mainly Plus and Polsat Box customers) – from PLN 483.6 to 432.8 million.
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From the second half of last year in the balance sheet of the Cyfrowy Polsat group are revenues from the sale of electricity and heat. In the last quarter they amounted to PLN 249 million and in the entire first half of this year – PLN 530.9 million.
– We are seeing a dynamic increase in green energy production. In the first half of the year, we produced 421 GWh of green energy – more than 40 percent more than last year. The financial results of the green energy segment are very good – in the first half of the year it generated up to PLN 121 million in EBITDA – describes Maciej Stec, Vice President for Strategy at Cyfrowy Polsat. – As planned, we are launching new wind farm production capacities. In February, we started the technical commissioning of the Człuchów wind farm with a capacity of 72.6 MW, and at the end of June, the Przyrów wind farm with a capacity of 50.4 MW – he adds.
However, quarterly revenues classified as other (including interest from installment sales, rental of premises and equipment, as well as sales of photovoltaic installations, hydrogen, apartments, gas and hydrogen buses) decreased from PLN 212.4 million to PLN 139.9 million.
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Cyfrowy Polsat: subscribers pay almost 5% more
In the last quarter, the Cyfrowy Polsat group had 13.09 million unitary services (RGUs) sold under the subscription model, almost the same number as last year. In the pay TV area, there was a decrease of 146 thousand (3%) to 4.75 million RGUs. – The erosion of the base was influenced by the decreasing popularity of satellite technology, as well as the ongoing process of consolidation of contractual customers under a common contractual arrangement within a family – noted in the company’s report.
When it comes to in mobile telephony, there was an increase of 1.6%. up to 6.32 million RGUs, and in the case of Internet services – 2.5%. to 2.02 million. The total number of subscribers decreased by 90 thousand. (1.5%) to 5.76 million. – The main reasons for the decline in the pay-TV service base are the lower number of satellite TV services provided and the gradual elimination of the Ipla service following the change in the strategy for offering our online video services in 2021. This decrease is partially offset by the increasing number of television services provided via Internet technology (IPTV/OTT), the report explains.
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The average monthly revenue from a subscriber customer increased by 4.7% to PLN 75.2. – In line with the assumptions of the long-term strategy, we strive to maximize revenue per customer through upselling and combination sales of additional products and services to our customer base as part of the combined service offering and by offering richer television and telecommunications packages (more-for-more strategy) – noted in the report. The average number of services per subscriber increased by 0.03 to 2.27.
– At a high and stable level of almost 2.5 million, Despite unfavorable market conditions, the number of subscribers using our bundled services remains the same. They make up 43 percent of all our customers, which is a very good result. – emphasizes Maciej Stec. – We have effectively built the value and loyalty of our customers, largely thanks to the consistent implementation of the multiplay strategy and the popularization of 5G. The average revenue per customer has increased across all our customer groups: contract B2C, B2B and prepaid, and the customer churn rate remains low at 7.5%. – he adds.
Fewer prepaid customers
In the prepaid segment, the number of services sold decreased by 1.8% y/y to 2.61 million, and when it comes to mobile telephony, which dominates this area – by 2.9%. to 2.47 million. Cyfrowy Polsat explains that the reason is the “high level of competitiveness manifested, among others, by large data transmission packages offered as part of prepaid mobile telephony tariffs. The average monthly revenue of a prepaid customer increased by 1.1%. up to PLN 18.
On the other hand In the corporate segment, where services are provided mainly by Netia and its subsidiaries, the number of clients decreased by 0.7% year-on-year to 68.5 thousand, and the average revenue from each increased by 1.5%. up to PLN 1,485 (and in cumulative terms by 2.6% to PLN 1,487.
Cyfrowy Polsat emphasizes that the business division “is under the influence of strong competitive pressure, which is reflected in the price level of traditional telecommunications services”– The basis for building value in our B2B database is, naturally, the additional services provided to our corporate customers. To this end, we seek to constantly expand the offering to corporate customers with new services that generate incremental revenue. One example is the continuous process of expanding the data center resources offered to corporate customers, the offering of cybersecurity solutions and cloud resources, the company added.
Operating expenses of Cyfrowy Polsat Group in the last quarter amounted to PLN 3.06 billion, up 4.8%. over a year ago. Personnel costs increased from PLN 274.9 million to PLN 296.4 million, maintenance expenses – from PLN 529.4 to PLN 555.4 million, and the cost of energy sold amounted to PLN 194.1 million.
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However, revenues classified as other amounted to PLN 27.5 million, compared to PLN 15 million a year earlier. As a result, the holding’s operating profit increased from PLN 329.8 million to PLN 396 million.
Loans cost less
Gross and net profitability increased thanks to a better balance between revenues and financial costs. Quarterly profit from investment activities increased by PLN 21 to 84.2 million (including due to an increase in the valuation of the block of shares held in Asseco Poland by PLN 21.4 million and an increase in the interest defined as other from PLN 11.9 to PLN 32.8 million), while financial costs decreased from PLN 300.7 to PLN 267.1 (interest on loans and advances decreased, the result of exchange rate differences in the assessment of loans improved, the company, unlike the previous year, did not repay part of the loans at once).
Thanks to that net profit increased from PLN 8.1 to PLN 175.5 million, and the share attributable to the shareholders of the holding’s parent company increased from a loss of PLN 7.3 million to a profit of PLN 146.4 million.
– It was a very good quarter in terms of financial results – the Group’s revenue and EBITDA increased by 5 percent year-on-year and 8.3 percent respectively. The green energy segment contributed significantly to the Group’s results – in the second quarter alone it generated PLN 324 million in revenue and PLN 71 million in EBITDA. The consistent implementation of the multiplay strategy was reflected in the increase in ARPU across all customer groups and the increase in retail revenue by 3 percent. The TV advertising market is growing strongly and we are growing with it – comments Katarzyna Ostap-Tomann, Member of the Board of Directors for Finance at Cyfrowy Polsat and Vice President for Finance at Polkomtel.
The Cyfrowy Polsat Group exceeded analysts’ expectations, which expected (this is the average of forecasts collected by PAP Biznes) that it would record PLN 829 million EBITDA profit, 23.8 percent EBITDA margin, PLN 360.5 million operating profit and PLN 120.4 million profit attributable to shareholders of the parent company.
At the end of trading on Wednesday, the price of one Cyfrowy Polsat share was PLN 12.98, which gave a capitalization of PLN 8.3 billion. Over the past 12 months, the company’s share price has decreased by 11.5 percent (although since January of this year it has increased by 5.3 percent), within two years – by 33.3 percent, and within three years – by 59.3 percent.
The company is controlled by Zygmunt Solorzas holder of shares constituting 48.15 percent of capital and 59.51 percent of votes in the general meeting.