HT stabilized revenues and increases investments – 1.3 billion HRK for fast internet development
T-Hrvatski Telekom (Reuters: HT.ZA; Bloomberg: HTRA CZ), Croatia's leading telecommunications provider, announces its audited results for the year ended 31 December 2014.
In 2014, Hrvatski Telekom has generated revenue amounting to HRK 6.908 billion. HT maintained its leading position in all segments of the telecommunications market, and revenue almost stabilized, with a minimal decline of 1.9 per cent in comparison with the previous year.
The statement of Davor Tomašković, President of the Management Board of Hrvatski Telekom
Stabilization of overall revenue was particularly impacted by stabilization of mobile communications revenue, as well as by revenue growth in the ICT segment, in mobile internet and in TV services.
Despite increased costs related to the Company's transformation, the deterioration of the business environment, the new radiofrequency fee and the change in revenue structure, EBITDA before exceptional items in 2014 amounted to HRK 2.786 billion, at an EBITDA margin before exceptional items of 40.3 per cent.
The net profit in 2014 amounts to HRK 1.142 billion. The Management Board and the Supervisory Board have made a proposal to the General Assembly that dividend be paid out at a rate of 50.7 per cent in relation to the profit generated by HT d.d. Therefore, a proposal is made to the General Assembly that a dividend of HRK 573.2 million be paid out, which is HRK 7 per share. The General Assembly will be convened for 29 April 2015, and this year, the proposal is to reinvest the HT d.d. net profit by increase of share capital from the Company's assets.
By transformation to a faster and more efficient organization
Throughout the entire year 2014, Hrvatski Telekom was facing a challenging business environment, marked by the continuation of the long-lasting economic crisis and, consequently, the contraction of the entire telecommunications market. Additional negative impact on the telecommunications industry came from changes in regulatory conditions, primarily from the introduction of the new fee for radiofrequency spectrum usage. While operating under such conditions, Hrvatski Telekom managed to maintain its leading position in all business segments and remained the leading provider of telecommunications services in Croatia.
2014 was a year of big transformation in Hrvatski Telekom. By implementation of numerous transformation measures in 2014, Hrvatski Telekom has become a faster and more efficient organization. A new organizational structure was set up, marked by substantially fewer managerial positions. A new Collective Agreement has been agreed with the Unions, providing a high level of rights to HT employees, but also reflecting the present economic situation and conditions under which the Company operates.
In order to increase infrastructure quality, while optimizing costs with regard to construction and maintenance of the fixed and mobile network, a contract was signed with Ericsson to outsource the services of construction and maintenance of HT's infrastructure, for a five-year period. 638 employees started working in the newly established company from 1 September 2014.
The year 2014 was also marked by intensive work on PSTN to IP migration, and until now 75.4% of residential and business customers have been migrated. Optima Telekom was fully consolidated into HT Group's financial statements as of 1 July 2014, following the takeover of control of OT by HT.
The plan for 2015 – Focus on customers and investments
The increase in the organization's efficiency, as implemented in 2014, is the first step in the process of improving quality of service and customer experience, which will be the focus of Hrvatski Telekom's operations in 2015. There is a lot of room for improvement in this area; the crucial target is to turn Hrvatski Telekom into a provider of the highest quality and fastest services on the Croatian market.
Planned investments for 2015 exceed HRK 1.3 billion, which is an increase of more than 25% as compared to 2014; the focus will be on further development of mobile and fixed infrastructure, improved broadband access availability and capacity and the finish of network IP transformation.
Commenting on the results for the year 2014, Davor Tomašković, President of the Management Board of Hrvatski Telekom pointed out:
“After the transformation conducted in 2014, Hrvatski Telekom is now a faster and more efficient organization. Financial data produce evidence that in 2014 we managed to stabilize revenue, particularly in the mobile segment, along with revenue growth in ICT, in mobile internet and in TV services.
We will go on with transformation; in 2015, our primary focus will be on improvement of the customer experience and on new investments.
We will increase investments in 2015 by 25 per cent and this will mainly be directed towards the development of technologies for fast internet – developing the fiber optic network and mobile internet.
We have already taken the first step by investing in additional radiofrequency spectrum, which enabled us to be the first operator in Croatia to achieve double internet access bitrates in our 4G network from 75 Mbit/s to 150 Mbit/s.
Until the end of 2015, we plan to achieve coverage in fixed broadband internet access in excess of 50 per cent, while in the mobile network; coverage will exceed 60 per cent at speeds of up to 150 Mbit/s.
Our leadership in technology is the basis for development and for offering our customers the best customer experience.”