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• EBITDA Growth: Almost 4% year-over-year growth in Q2 2024.

• Net Income: Solid PLN 230 million in Q2 2024.

• Total Revenue: Decreased by 3.1% year-over-year in Q2 2024.

• Core Telecom Services Revenue Growth: 4.7% year-over-year increase in Q2 2024.

• Mobile Customer Base: Exceeded 9 million, with around 3% year-on-year growth.

• Convergence Customer Base Growth: 5% year-on-year increase.

• Fiber Customer Base Growth: 15% year-on-year increase.

• Mobile ARPO Growth: 2% year-on-year increase.

• Convergence ARPO Growth: 4% year-on-year increase.

• Economic CapEx: PLN 800 million in H1 2024.

• Cash Generation: Over PLN 400 million in H1 2024.

• Financial Leverage: Approximately 1.1 times net debt to EBITDA.

• Warning! GuruFocus has detected 8 Warning Signs with FRA:TPA1.

Release Date: July 24, 2024

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

Positive Points

• Orange Polska SA (FRA:TPA1) reported a healthy growth in EBITDA, with an increase of almost 4% year over year, driven by strong performance in core telecom services.

• The company achieved a solid net profit of PLN230 million in the second quarter, maintaining a similar level to the previous year.

• Orange Polska SA's mobile customer base exceeded 9 million, with a continuous growth of around 3% year on year.

• The company is making significant investments in mobile and fixed infrastructure, including the rollout of a 5G network and expansion of fiber footprint.

• Digital sales channels are nearing the strategic target, with 24% of sales conducted digitally in the first half of 2024, driven by the performance of their mobile app.

Negative Points

• Orange Polska SA experienced a decrease in total revenues by 3.1% year over year, primarily due to a decline in energy sales and IT/IS revenues.

• The company faced headwinds from inflationary pressures and energy resale, impacting costs and margins.

• There was a cyclical slowdown in demand for ICT services, affecting revenue growth in this segment.

• The financial results were impacted by a high comparable base from the previous year, particularly in IT and energy trade.

• Employment costs accelerated in the second quarter, partly due to salary increases and provisions, which may affect future profitability.

Q & A Highlights

Q: Can you explain the impact of JV settlements on your EBITDA and whether these are recurring? A: Jacek Kunicki, CFO, explained that the JV settlements contributed over PLN80 million to EBITDA, but this should not be seen as a recurring item. The first half of the year was influenced by non-recurring impacts such as profits from energy trade and inflationary pressures. These headwinds are expected to ease, and the catch-up from the FiberCo contract will continue to provide benefits until 2025.