Slovenia's telecom incumbent Telekom Slovenije released encouraging business results for the first three quarters of the year on 8 November along with a strategic business plan whose goal is to more than double net profit to €83 million by 2028.

Having posted only a 1% rise in sales revenue and 1% drop in net profit last year, the state-owned group saw its sales revenue rise by 7% year-on-year to €518.8 million in the first nine months of this year as net profit rose by 2% to €39.9 million.

Impact of high energy prices, flood damage

The company made a point of saying it generated growth despite much higher costs of electricity and expenditure related to the damage to the infrastructure caused by the August floods.

The impact of the floods on its operations was estimated at €5.3 million, but the group reported €14.2 million in flood damage that also includes an estimate of the cost of replacement investments.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) were up by 4% year-on-year to €181.8 million. The EBITDA-to-sales ratio was 35%.

The group received €2.3 million in state aid from January to the end of September under a law to mitigate the impact of high electricity and natural gas prices on companies.

If energy prices remained at the 2022 levels, and taking into account the state aid for energy resources and adapting for the net effect of the August floods, EBITDA would have been 10% higher than in the comparable period of 2022, the company said.

Earnings before interest and taxes (EBIT) rose by 16% year-on-year to €59.5 million. Discounting higher energy prices, state aid and flood damage, the operating profit would have been 37% higher year-on-year.

Commenting on the results at a press conference, the company's CEO Boštjan Košak labelled the performance very successful, adding that the company was on track to turn the trend of falling market shares.

He was happy that the May rise in prices of their services was not the main factor behind higher revenue. The aim is to use the price increase leverage as little as possible, he said.

Increase in mobile users

This September, the group had 2% more mobile users than a year ago. In the Slovenian market the number increased by 1% to almost 1.12 million and in Kosovo it was up by 4% to roughly 1.05 million, Boštjan Škufca Zaveršek, vice-president of the management board, said.

The number of fixed broadband connections in Slovenia remained stable at just over 372,000. In the retail segment the figure rose by 1% to almost 199,000 with the goal being to reach 200,000 by the end of the year. In the wholesale market the number of connections was down by 2% and in Kosovo by 5%.

By the end of the year, the company plans to cover 60% of the population with the 5G mobile network, with management board member Vesna Prodnik saying the goal was to reach the regulatory 100% coverage before the deadline at the end of 2025.

The core company also generated growth in financial services, eHealth, insurance, IT services, and merchandise sales. It is a leading provider of comprehensive IT solutions for commercial users with emphasis on cyber security.

Growth projected to continue

The group expects to post operating revenue to the tune of €699 million this year, EBITDA of €226 million and a net profit of €38 million, which is more than initially planned.

Further growth is forecast for 2024 with revenue to increase to €717 million, net profit to €43 million and EBITDA to almost €234 million.

In line with the 2024-2028 strategic business plan annual EBITDA is to reach €280 million and net profit €83 million by the end of 2028. In the entire period investment is to total €951 million.