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Syn Interim / Quarterly Report 2022
2210_rns_2022-08-30_4b3ee8d5-d116-41c1-aa76-1da2ba263473.pdf
Interim / Quarterly Report
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Sýn hf.
Interim Financial Statements Q2 and 1H 2022
31st of August 2022
vodafone
visir
SPORT
BYLGJAN
989
ENDER
Good operating results
- Operating profit is the highest in history of Sýn.
- Good operating results, with operating profit increasing by ISK 740M between years.
- Operating cost remains the same while revenue increases by 14%.
- Return on investment in internal systems has started to materialize.
- Cooperation agreement signed for 5G development.
- Retirement of the CEO.
Key Financial Result
Q2 and 1H 2022
Revenue 1H ISK 11,691M
Q2 2022
ISK 6,009M
EBITDA 1H ISK 3,317M
Q2 2022
ISK 1,607M
Earnings 1H ISK 273M
Q2 2022
ISK 66M
FCF 1H ISK 1,284M
Q2 2022
ISK 800M
Income Statement
| Q2 2022 | Q2 2021 | % ch. | 1H 2022 | 1H 2021 | % ch. | |
|---|---|---|---|---|---|---|
| Revenues | 6,009 | 5,289 | 13.6% | 11,691 | 10,289 | 13.6% |
| Cost of sales | -4,124 | -3,759 | 9.7% | -7,790 | -7,134 | 9.2% |
| Gross profit | 1,885 | 1,530 | 23.2% | 3,901 | 3,155 | 23.6% |
| Operating expense | -1,563 | -1,588 | -1.6% | -3,178 | -3,171 | 0.2% |
| EBITDA | 1,607 | 1,488 | 8.0% | 3,317 | 2,876 | 15.3% |
| EBIT | 322 | -58 | - | 723 | -16 | - |
| Net financial expense | -226 | -117 | - | -368 | -210 | - |
| Effect of associates | 0 | 20 | - | 0 | -173 | - |
| Income tax | -30 | 38 | - | -82 | 51 | - |
| Profit (loss) | 66 | -117 | - | 273 | -348 | - |
| Gross Margin | 31.4% | 28.9% | 33.4% | 30.7% | ||
| EBITDA | 26.7% | 28.1% | 28.4% | 28.0% | ||
| EBIT | 5.4% | -1.1% | 6.2% | -0.2% |
- Amounts are in ISK millions
Key factors impacting Q2 and 1H 2022
- Revenues increase by 13.6% in the first half of 2022, revenue growth is comparable between Q1 and Q2 2022
- Continued growth in mobile revenues where both IoT revenues and roaming revenues have a positive impact.
-
Endor revenue doubles between 1H 2021 and 2022 and the revenue is comparable to the first half of 2020.
-
Gross margin was 33.4% the first six months of 2022, which is an increase of 2.7 percentage points. Lower depreciation of broadcasting license rights (EM broadcasting license right was depreciated in 2021), changed product mix, better utilization of fixed assets and favorable exchange rates have had the greatest impact.
-
Operating costs have not increased in line with the inflation and remains the same between 1H 2021 and 1H 2022.
-
Operating profit (EBIT) increases by ISK 739M between 1H 2021 and 1H 2022.
-
Interest expense increases by ISK 180M between periods. The increase is explained by the increase of lease obligations as a result of the sale of passive mobile infrastructure. The increase in central bank key interest rates offsets the decrease in interest due to lower debt.
-
Insignificant change in exchange rate between periods, the exchange rate was positive in the first six months of 2022 of the amount of ISK 71M.
-
Included in the negative effect of associates is a sales loss of ISK 179M due to the sale of the Faroese associate Hey.
Revenue Breakdown
| Q2 2022 | Q2 2021 | % ch. | 1H 2022 | 1H 2021 | % ch. | |
|---|---|---|---|---|---|---|
| Media | 2,147 | 2,116 | 1% | 4,254 | 4,070 | 5% |
| Broadband | 1,109 | 1,116 | -1% | 2,231 | 2,261 | -1% |
| Mobile | 1,282 | 1,061 | 21% | 2,683 | 2,000 | 34% |
| Fixed Line | 122 | 134 | -9% | 251 | 274 | -8% |
| Hosting and operating solutions | 864 | 352 | 145% | 1,329 | 665 | 100% |
| Retail sale | 323 | 311 | 4% | 597 | 604 | -1% |
| Other revenue | 162 | 199 | -19% | 346 | 415 | -17% |
| Total Revenue | 6,009 | 5,289 | 14% | 11,691 | 10,289 | 14% |
Media
Continued growth in advertising revenue, it increased by 15.4% and has now reached its previous strength. There is a great demand for advertising spaces on Visir and it continues to grow rapidly. Radio's advertising revenue is also increasing.
Subscription revenue increases by 5% between periods. More than 40,000 households have access to Stöd 2+ and the number of subscribers increases by 4% between 1H 2021 and 1H 2022.
Broadband
Reduction in broadband revenue is mainly explained by the reduction in revenue from home connections. In the first six months revenue from company connections increases by almost 9%, both increase in customers and an increase in data volume.
Mobile
Growth is driven by a good IoT revenue growth and an increase in roaming revenue.
Hosting and operating solutions
Endor's revenue doubles between periods. Equipment sales partially explain the strong revenue growth, but the margin from the equipment sales are low.
Other revenue
Other revenue decrease by 17% between periods due to nonrecurring revenue that was recognized in 2021.
*Amounts are in ISK million
Statement of Financial Position
Assets
| ISK m | 30.6.2022 | 31.12.2021 | % ch. |
|---|---|---|---|
| Fixed assets | |||
| Right-of-use asset | 7,971 | 8,049 | -1% |
| Property, plant and equipment | 3,209 | 3,212 | 0% |
| Goodwill | 8,847 | 8,888 | 0% |
| Other intangible assets | 4,408 | 4,469 | -1% |
| Shares in other companies | 67 | 62 | 8% |
| Deferred tax asset | 25 | 26 | -4% |
| Fixed assets | 24,527 | 24,706 | -1% |
| Current assets | |||
| Broadcasting license rights | 1,652 | 1,762 | -6% |
| Inventories | 585 | 356 | 64% |
| Trade receivables and other short term receivables | 3,512 | 5,463 | -36% |
| Cash and cash equivalents | 2,252 | 4,214 | -47% |
| Current assets | 8,001 | 11,795 | -32% |
| Total assets | 32,528 | 36,501 | -11% |
Liabilities and equity
| ISK m | 30.6.2022 | 31.12.2021 | % ch. |
|---|---|---|---|
| Equity | 8,888 | 10,535 | -16% |
| Long term liabilities | |||
| Interest bearing debt | 4,936 | 4,965 | -1% |
| Lease liabilities | 11,308 | 11,393 | -1% |
| Other liabilities | 180 | 180 | 0% |
| Deferred tax liabilities | 89 | 19 | 368% |
| Long term liabilities | 16,513 | 16,557 | 0% |
| Current liabilities | |||
| Interest bearing debt | 475 | 723 | -34% |
| Lease liabilities | 1,138 | 1,206 | -6% |
| Accounts payable and other current liabilities | 5,514 | 7,480 | -26% |
| Current liabilities | 7,127 | 9,409 | -24% |
| Total equity and liabilities | 32,528 | 36,501 | -11% |
| Interest bearing debt | 17,857 | 18,287 | |
| Net interest bearing debt | 15,605 | 14,073 | |
| Equity ratio | 27.3% | 28.9% |
*Amounts are in ISK million
Cash flow
Cashflow Q2 2022
Cashflow 6M 2022
| Q2 2022 | Q2 2021 | % ch. | 1H 2022 | 1H 2021 | % ch. | |
|---|---|---|---|---|---|---|
| Cash generated by operations before interest and tax | 1,810 | 1,572 | 15% | 3,114 | 2,254 | 38% |
| Investment activites | -1,010 | 164 | -716% | -1,830 | -643 | 185% |
| Free cash flow | 800 | 1,736 | -54% | 1,284 | 1,611 | -20% |
*Amounts are in ISK million
Statement of Financial Position - Key Ratios
Equity Ratio
27.8%
28.9%
27.3%
27.3%
31.12.20
31.12.21
30.6.22
Current Ratio*
1.45
1.45
1.58
1.45
31.12.20
31.12.21
30.6.22
Net interest bearing debt
12.4
15.4
14.1
15.6
Lease Liabilities
Net interested bearing debt
15.4
14.1
15.6
31.12.20
31.12.21
30.6.22
- Current Assets/ liabilities and other current liabilities
*Amounts are in ISK million
EBIT development
1H 2019 - 1H 2022
*Amounts are in ISK million
Free cash flow
1H 2019 - 1H 2022
- In the first half of 2021, the Faroese subsidiary company Hey was sold and the payment for the sale of holdings amounted to ISK 1,065 million, which is included in investment movements.
*Amounts are in ISK million
Development of interest-bearing debt
*Amounts are in ISK million
Media
- Investment in broadcasting license rights, which have not been bringing benefits to the company, have been reduced. This results in lower depreciation in the first half of this year, but they decrease by ISK 257 million.
- Production of domestic material has been increased without increasing costs to that extent. Cost reduction has been achieved by commissioning a new studio, increasing cooperation with production companies and by improved utilization of human resources.
- Strong revenue growth at Vísir, as advertising revenue has increased by almost half since the first half of 2020. The cost base is stable.
- The advertising department has been reorganized and revenue has increased by over 35% since the first half of 2020.
- Changed focus in the newsroom, where more emphasis is placed on the production of news-related content, both for Stöð 2 and Vísi.
Idol
Thank you
vodafone
visir
SPORT
BYLGJAN 989
SPORT
X
ENDOR
Disclaimer
The information in this presentation are based on sources that Sýn hf. deem reliable at the time of publication. However, it is not possible to secure fully that they are completely faultless.
All information in the presentation are the property of Sýn hf. It is prohibited to copy, amend or distribute in any manner, partly or fully, the presentation and the information therein.
The presentation is only for information purposes and not to be used as basis for decision making on part of recipients. Recipients shall not in any manner interpret the content therein as promise or guidance. Sýn hf. is not obliged to provide the recipients with further information nor to amend or correct should the information it is based on change.
Any statement in this presentation that cites future prospects is solely for guidance purposes, based on current evolution, information and projections. Future guidance of the company are subject to numerous risk and uncertainties that can result in being substantially different from the content of this presentation. External factors, such as access to finance, legislation, regulatory actions and otherwise can thus have substantial effects.
Sýn hf. will not update future guidance of the company due to situations that will occur afterwards. Sýn hf. suggest that recipients of the presentation should not trust statements therein at a later stage as they are only relevant at the day of the publication. Subject to this provision, all guidance on future prospects are fully reliable.
The recipients of the presentation acknowledge that they are subject to aforementioned disclaimers and limitations