Netia shifts focus away from RGU growth, sets guidance for FY2013

21 Dec 2012

Quad-play service provider Netia has announced a trimmed-back guidance for FY2013 and has altered its long-term strategic goals, following changes in the market environment. The telco announced that it was on track to deliver revenues of PLN2.125 billion (USD690.5 million), 2.65 million revenue generating units (RGUs) and adjusted EBITDA of PLN600 million, with an adjusted EBITDA margin of 28.2% for FY2012. However, greater pricing pressure, weak performance in the fixed voice segment and regulatory changes have led to shrinking margins and consequently, Netia’s management has deemed that growth in RGUs is no longer ‘financially attractive’. Netia has therefore altered its long-term goals to exclude ‘continued growth in the number of services’, but maintains its other goals of: increasing services per customer to reach 2.0; increasing value share; achieving adjusted EBITDA margins between 27% and 29%; and keeping a CAPEX to sales ration of below 15% whilst it upgrades its networks (due to end in December 2013) and 10%-12% thereafter.

Guidance for FY2013 includes a 9.4% drop in revenues to PLN1.925 billion, 12.5% drop in adjusted EBITDA to PLN525 million and a corresponding fall in EBITDA margin to 27.3%. RGUs are expected to stay level at 2.65 million. Netia noted that its revised commercial approach should allow it to stabilise its performance in the residential segment from 2014, adding that its performance in the business sector remained largely unchanged despite deflationary impact from reductions in mobile termination rates (MTRs).

Poland, Netia