Results in line with outlookAt the beginning of the year, the accounting treatment of broadcasting license rights was changed, amounts for 2018 have been restated.
Main results:
• Revenue for the fourth quarter of 2019 amounted to ISK 4,935 million, a decrease of 9% from the same period in 2018. Total revenue decreased by 943 ISK million between years, or by 5%.
• The quarter’s EBITDA amounted to ISK 1,409 million, compared to ISK 1,449 million in the fourth quarter of 2018. The EBITDA margin was 28.6% in the fourth quarter of 2019 compared to 26.7% in the same quarter last year. EBITDA adjusted for IFRS 16 in the fourth quarter amounted to ISK 1,270 million. EBIDTA for 2019 amounted to ISK 5,509 million, a decrease of ISK 110 million compared to 2018.
• Loss in the fourth quarter of 2019 amounted to ISK 2,101 million, compared to profit of ISK 193 million in the same quarter last year. Goodwill was impaired by ISK 2,452 million in the fourth quarter which explains the loss in the quarter. The quarter’s adjusted for the impairment would have been a profit of ISK 351 million.
• The loss of the year amounted to ISK 1,748 million compared to a profit of ISK 443 million in 2018. Result of the year, adjusted for the impairment of goodwill, amounted to a profit of ISK 703 million. One-off items amounted to ISK 358 million.
• Cash flow from operations in the fourth quarter amounted to ISK 1,953 million compared to ISK 1,358 million in the same period in 2018, an increase of 44%.
• Total investments for the year amounted to ISK 4,719 million, thereof ISK 1,833 million in property, plant and equipment and intangible assets (excluding broadcasting license rights) and ISK 2,789 million in broadcasting license rights.
• Negative cash flow from financial activities for the year amounted to ISK 380 million compared to positive cash flow of ISK 434 million in 2018 which is a change of ISK 814 million.
• Sýn hf.’s equity ratio was 27.5% at the end of 2019.
• The management's key focus in 2020 is to increase profitability and cash flow from the company's operations. Investments for the year will be around ISK 1 billion.
Heiðar Guðjónsson, CEO:
“The net income of last year amounted to a loss of ISK 1,748 million. That should not come as a surprise since our guidance for free cash flow and EBITDA materialized. Last year’s accounts are marred by the big operational changes taking place and the impairment of goodwill. It is positive to note that free cash flow increases by over one billion ISK between ´18 and ´19.
The whole company participated in a strategic review of the business last year. As a result of that work the organizational chart was changed and today we have changed the entire management board of the company except for the CTO. We split the technology department so that IT is now under the COO which will increase operational efficiency and speed up digital transformation. Human resources and a newly formed communications department now report directly to the CEO just like the income areas of the business. On top of this we implemented a new communications and brand strategy for the entire business and started a very successful 4DX campaign to increase consumer satisfaction. As a result of this work we are in a good position to grow our business.
The key to improving our operations is by moving from a fixed cost model to flexible model. Here we have several projects underway. Outsourcing is growing, and we are making better use of internal resources by aligning the work of different departments of the business. On the telco side it is most important how to plan the infrastructure investments going forward to ensure quality and efficiency. An important step was taken with the announcement from December 19th by the operators in Iceland on possible collaboration on build-out of 5G – but it is too early to tell what that might lead to.
This year’s outlook is promising. We know that our current operations are becoming more efficient which will improve our cash flow. Other measures should improve profitability further. The big questions around infrastructure build-out on the telco side make it very hard to offer similar guidance as the company has done in the past. Such a range in EBITDA would not adequately capture the potential of the company.”
Further information:
✓ Lilja Birgisdóttir, Sýn’s director of communications, will answer requests for further information and can be contacted via email fjarfestatengsl@syn.is or by telephone, +354 779-3302
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