DNA PLC STOCK EXCHANGE RELEASE 18 JULY 2017 AT 8:30 AM EEST
DNA arranges two news conferences today. News conference for media and analysts is held at 10:00 am EEST at DNA House. Conference call for analysts and institutional investors is at 2:00 pm EEST. Details of the events can be found at the end of this release.
This is a summary of DNA's Half Year Financial Report 2017. The complete report is attached to this release and is 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.
April- June 2017
- Net sales increased 4.3% and amounted to EUR 219.3 million (210.2 million).
- EBITDA increased 15.5% to EUR 67.6 million (58.6 million) or 30.8% of net sales (27.9%).
- The operating result increased 36.8% and was EUR 30.5 million (22.3 million). Operating result as a percentage of net sales increased and was 13.9% (10.6%).
- Revenue per user (ARPU) for mobile communications amounted to EUR 18.5 (16.8).
- The mobile communication subscription turnover rate (CHURN) was 15.4% (15.0%).
January-June 2017
- Net sales increased 5.0% and amounted to EUR 432.7 million (412.2 million).
- EBITDA increased 12.5% to EUR 133.6 million (118.7 million) or 30.9% of net sales (28.8%).
- The operating result increased 25.2% and was EUR 59.4 million (47.4 million). Operating result as a percentage of net sales increased and was 13.7% (11.5%).
- The mobile communication subscription base grew 3.2%, totalling 2,754,000 (2,668,000).
- Revenue per user (ARPU) for mobile communications amounted to EUR 18.0 (16.6).
- The mobile communication subscription turnover rate (CHURN) was 18.1% (14.3%).
- The fixed-network subscription base (voice, broadband and cable television) grew slightly and was 1,125,000 subscriptions at the end of June (1,116,000).
DNA's outlook for 2017 remains unchanged
DNA's net sales are expected to remain at the same level and the comparable operating result is expected to improve somewhat in 2017 compared to 2016. The Group's financial position and liquidity is expected to remain at a healthy level.
Key figures
| EUR million | 4-6/2017 | 4-6/ 2016 | Change, % | 1-6/2017 | 1-6/2016 | Change, % | 1-12/ 2016 |
| Net sales | 219.3 | 210.2 | 4.3% | 432.7 | 412.2 | 5.0% | 858.9 |
| EBITDA | 67.6 | 58.6 | 15.5% | 133.6 | 118.7 | 12.5% | 236.3 |
| - % of net sales | 30.8% | 27.9% | 30.9% | 28.8% | 27.5 % | ||
| Comparable EBITDA* | 67.6 | 58.6 | 15.5% | 133.6 | 118.7 | 12.5% | 247.1 |
| - % of net sales | 30.8% | 27.9% | 30.9% | 28.8% | 28.8% | ||
| Depreciation, amortisation and impairment | 37.1 | 36.3 | 74.2 | 71.3 | 145.0 | ||
| Operating result, EBIT | 30.5 | 22.3 | 36.8% | 59.4 | 47.4 | 25.2% | 91.2 |
| - % of net sales | 13.9% | 10.6% | 13.7% | 11.5% | 10.6% | ||
| Comparable operating result* | 30.5 | 22.3 | 36.8% | 59.4 | 47.4 | 25.2% | 102.1 |
| - % of net sales | 13.9% | 10.6% | 13.7% | 11.5% | 11.9% | ||
| Net result before tax | 28.1 | 19.9 | 41.2% | 54.7 | 42.6 | 28.4% | 81.7 |
| Net result for the period | 22.5 | 15.9 | 41.6% | 43.7 | 34.0 | 28.3% | 65.2 |
| Return on investment (ROI), % | 13.2 | 9.6 | 12.5 | 10.0 | 9.6 | ||
| Return on equity (ROE), % | 16.2 | 12.4 | 15.1 | 13.0 | 11.6 | ||
| Capital expenditure | 24.4 | 33.8 | -27.9% | 45.5 | 54.6 | -16.6% | 143.6 |
| Cash flow after investing activities | 33.2 | 11.2 | 43.5 | 40.3 | 83.5 | ||
| Net debt, EUR million | 358.3 | 412.4 | 358.3 | 412.4 | 321.7 | ||
| Net debt/EBITDA | 1.32 | 1.76 | 1.34 | 1.74 | 1.36 | ||
| Net gearing, % | 63.6 | 79.5 | 63.6 | 79.5 | 53.9 | ||
| Equity ratio, % | 47.5 | 44.9 | 47.5 | 44.9 | 48.4 | ||
| Basic earnings per share, EUR | 0.17 | 0.12 | 0.33 | 0.27 | 0.51 | ||
| Diluted earnings per share, EUR | 0.17 | 0.12 | 0.33 | 0.27 | 0.51 | ||
| Personnel at the end of period | 1,666 | 1,702 | 1,666 | 1,702 | 1,668 |
*Group key figures
CEO's review
DNA had a strong first half of 2017. Our net sales increased 5% to EUR 432.7 million. Growth of service revenue (net sales less sales of devices and interconnection charges) continued, and good development of mobile device sales also had a positive effect on net sales. Service revenue was boosted in particular by the growth in the amount of mobile subscriptions and increased share of 4G subscriptions. In January-June, our profitability continued to improve and our operating result grew 25.2% and was EUR 59.4 million, or 13.7% (11.5%) of net sales.
Our results continued to develop favourably in the second quarter. Our EBITDA increased 15.5% and was EUR 67.6 million and our operating result grew 36.8% to EUR 30.5 million. The result of the second quarter was also fuelled by the improved cost-efficiency of our modern network platforms. While we expect operative capital expenditure to increase during the second half of the 2017, it will remain at a lower level than in 2016.
Demand for mobile communications services developed favourably in the second quarter. Mobile communication network subscription volumes were up 86,000 from the reference period. DNA's revenue per user (ARPU) improved and was EUR 18.5 in the second quarter. The subscription turnover rate (CHURN), which increased in the first quarter due to changes in the price and product design of certain subscription types, returned back to its normal level during the second quarter. Our broadband and cable television subscriptions increased in total by 21,000 subscriptions, adding 9,000 new subscriptions to our fixed-network subscription base (fixed voice, fixed broadband and cable television).
The new EU roaming regulation entered into force on 15 June 2017. Since then, our customers have paid the domestic rate for roaming calls and messages in the EU, and the unit price of data used in the EU fell by more than 90%. The new EU pricing scheme is valid within fair usage limits and for periodic roaming. We also launched new subscriptions in June that include an EU data package in the monthly fee.
After the new "roam like at home" rules came into force, our customers' use of mobile data abroad has multiplied. Similarly, foreign travellers now use more mobile communications services while visiting Finland. Our customers' phone calls and text messages in EU countries have also increased by dozens of percentages. Our roaming costs are compensated by the EU-baseline tariff of old subscriptions and the higher price of the new subscriptions with an EU data package.
We took another important step toward 5G by testing data transfer at 1 Gbps speed in our mobile communications network.
Competition is expected to remain intense for the rest of the year and our outlook for 2017 remains unchanged. We will continue to serve our customers with our strategic objectives in mind.
Jukka Leinonen President and CEO
Additional information:
Jukka Leinonen, CEO, DNA Plc, tel. +358 44 044 1000, jukka.leinonen(at)dna.fi Timo Karppinen, CFO, DNA Plc, tel. +358 44 044 5007, timo.karppinen(at)dna.fi Marja Mäkinen, Head of IR, DNA Plc, tel. +358 44 044 1262, marja.makinen(at)dna.fi DNA Corporate Communications, tel. +358 44 044 8000, communications(at)dna.fi
DNA's financial publications and Capital Markets Day in 2017:
- Interim Report January-September and news conferences, 20 October 2017
- DNA Capital Markets Day, 21 November 2017
News conferences
DNA will arrange a news conference for media and analysts in Finnish at 10:00 am EEST. The event will take place at DNA House, Läkkisepäntie 21, Helsinki. Registration for the event is requested by email to communications@dna.fi . The news conference will also be webcasted live on www.dna.fi/investors .
Conference call for analysts and institutional investors in English at 2:00 pm EEST
The audience is welcome to participate and ask questions through a conference call. Participants are requested to dial in a couple of minutes before the scheduled time;
- UK: +44(0)20 3427 1909
- USA: +1646 254 3366
- Finland: +358(0)9 6937 9543
- confirmation code: 628 9627
The result bulletin and presentation materials as well as a link to the webcast will be available on DNA's website before the event: www.dna.fi/investors . Recordings of the both events will be available on DNA's website, www.dna.fi/investors , later during the day.
Distribution: Nasdaq Helsinki Key media www.dna.fi
DNA Plc is a Finnish telecommunications group providing high-quality voice, data and TV services for communication, entertainment and working. DNA is Finland's largest cable operator and the leading pay TV provider in both cable and terrestrial networks. For DNA, the key area for growth in corporate business is the new way of working, independent of time and place, facilitated by smart terminal devices, diverse communications services and rapid connections. In 2016, DNA recorded net sales of EUR 859 million and an operating profit of EUR 91 million. DNA has more than 3.8 million subscriptions in its fixed and mobile communications networks. The Group also includes DNA Store, Finland's largest retail chain selling mobile phones. DNA shares are listed on Nasdaq Helsinki Ltd. For further information, visit www.dna.fi or follow us on Twitter @DNA_fi, @DNA_Business and @DNA_Palvelu and Facebook.
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