Yahoo Finance

• Revenue Growth: 8% increase driven by inflation link, new PoPs, and new services.

• EBITDA After Lease Growth: 11% increase with margin up by two percentage points.

• Cash Flow: EUR 150 million, up 6% quarter on quarter.

• Net Debt to EBITDA: 4.9 times, reflecting increased shareholder remuneration.

• New Sites: Over 200 new sites added in Q2, nearly 1,000 new PoPs on track for the full year target.

• Tenancy Ratio: 2.3 times.

• New Services Revenue: Increased by approximately 40% year on year, reaching more than EUR 16 million.

• EBITDA Margin: Increased to 91.6%, with EBITDA after lease margin at 72.4%.

• Net Income Growth: 10.5% increase.

• Free Cash Flow: EUR 159 million in Q2, with a 68% cash conversion rate.

• CapEx: EUR 67 million recorded in the quarter.

• Warning! GuruFocus has detected 4 Warning Signs with IFSUF.

Release Date: July 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Infrastrutture Wireless Italiane SpA (IFSUF) reported an 8% revenue growth in Q2 2024, driven by inflation-linked adjustments, new services, and new site additions.

• The company achieved an 11% growth in EBITDA after lease, with a margin increase of two percentage points.

• Strong industrial delivery was noted with over 200 new sites and nearly 1,000 new PoPs, aligning with full-year targets.

• The company provided compelling shareholder remuneration through additional dividends and buybacks.

• Infrastrutture Wireless Italiane SpA (IFSUF) is well-positioned to capture structural growth opportunities in Italy's digital infrastructure market, which is currently lagging behind European standards.

Negative Points

• Net debt to EBITDA ratio increased to 4.9 times, reflecting the impact of increased shareholder remuneration.

• The FWA market remains stable at low levels of growth, with no significant acceleration expected in the near term.

• The company's leverage remains high, with a structural leverage target of up to six times, indicating potential financial risk.

• Inflation in Italy is expected to be lower than the company's base assumption, potentially impacting future revenue growth.

• The IoT revenue per unit is lower, which affects the overall revenue mix and growth potential.

Q & A Highlights

Q: My question is on the Olo progression. We saw a pickup in net adds, but it didn't translate to a big boost in revenue. How should we think about the mix going forward, and what about the pricing differential between FWA and IoT? A: The quarter shows encouraging signs with net adds reflecting the IoT component. The IoT revenue per unit is lower, which affects the mix. We expect an acceleration in fixed wireless access finance, which hasn't yet been reflected.