19-05-2025
Digi Communications NV (FRA:53N) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amidst ...
Release Date: May 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Digi Communications NV (FRA:53N) reported a 20% increase in revenues, reaching 532 million in Q1 2025.
The company achieved significant growth in Spain, with mobile users surpassing 6.2 million and broadband users growing by 39% year-on-year.
Romania saw a 7% growth across all main segments, including mobile, pay TV, and broadband.
The company successfully raised over 600 million in funds for further expansion and refinancing efforts.
Digi Communications NV (FRA:53N) maintained a healthy EBITDA margin of over 40% in Romania, excluding IFRS 16 numbers.
Portugal reported a negative EBITDA, indicating challenges in achieving profitability in this market.
Interest expenses increased significantly due to refinancing at higher rates, impacting overall financial performance.
The company faces operational challenges in Belgium, with early-stage operations and slower customer growth.
There are concerns about the impact of pricing policy changes on margins, particularly in Spain.
The company is dealing with high income taxes, partly due to deferred tax and asset sales in Spain.
Warning! GuruFocus has detected 5 Warning Signs with FRA:53N.
Q: You have shown impressive subscriber growth in Spain, but the margin performance has been weaker. What explains the higher operational pressure in Q1, and how do you think about margins going forward? A: In absolute terms, EBITDA has been stable in Spain, with a marginal decline in Q1 compared to Q4. The slight decrease in margin is due to changes in our pricing policy and the introduction of more affordable products. We expect margins to bounce back to previous levels by the end of the year. (Respondent: CEO)
Q: Some of your peers have been vocal about the need for in-market consolidation in Europe and Spain. Do you think the Spanish market needs consolidation, and does Digi have a potential role to play here? A: We operate in competitive markets, including Spain. Our main strategy is organic growth, and we are not aiming to be a consolidator. If consolidation happens, we will take note but likely continue our operations as usual. (Respondent: CEO)
Q: Could you provide some color on your subscriber trend in Belgium? Why is portability coming down since launch, and how is your mobile network development in Belgium progressing? A: Belgium is our youngest operation, and we are still in the early stages. We have gained 53,000 users by the end of Q1, and we are happy with this number. It is difficult to provide meaningful projections for coverage or portability at this stage. (Respondent: CEO)
Q: Can you provide an update on the acquisition of Telecom Romania Mobile? A: The process is ongoing. The competition authority announced the remedies proposed by us and Vodafone. These remedies are publicly available, and there is a public process for comments. We hope to be in the final stages of the process soon. (Respondent: CEO)
Q: What is your revenue outlook for 2025, and what is your longer-term growth outlook? A: For 2025, we expect a low single-digit increase in EBITDA and a low double-digit increase in revenues. Long-term growth is difficult to predict, especially with new markets like Portugal and Belgium in early stages. (Respondent: CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
