In This Article:
Release Date: March 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Rai Way SpA (FRA:4RW) celebrated its first decade on the stock exchange with significant financial growth, including a 66% increase in adjusted EBITDA.
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The company achieved a 160% total shareholder return over ten years, with 86% of the initial investment returned through dividends.
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Core revenue growth in 2024 was double the CPI rate, demonstrating strong market potential.
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The company successfully launched new diversified assets, including a content delivery network and edge data centers, contributing to revenue.
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Rai Way SpA (FRA:4RW) maintained strong cost management, keeping operating expenses stable despite higher energy tariffs and diversification costs.
Negative Points
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Higher energy tariffs and increased startup costs for diversification initiatives are expected to impact adjusted EBITDA in 2025.
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There is a delay in the rollout of the data center projects due to procedural hurdles, potentially affecting investment timelines.
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The contribution from new services like edge data centers is still limited, with revenues only beginning to materialize.
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The company faces a tough comparison with 2024 due to non-core items and higher energy costs, which may affect 2025 performance.
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There is uncertainty regarding the consolidation process with potential partners, which could impact strategic decisions and investments.
Q & A Highlights
Q: Is there any update on the timing for permissions related to the second phase of the data center project, and is this part of your midterm ambition? A: (CEO) There have been some delays, which are unfortunately normal in Italy, but we expect a positive conclusion soon. If resolved quickly, we can maintain our timeline, aiming for completion of half of the first phase by 2027, with a slight shift in investment between 2026 and 2027.
Q: Given the ongoing discussions on consolidation, are you adopting a wait-and-see approach to investments, particularly regarding the $80 million data center investment? A: (CFO) Our strategy and targets are independent of any consolidation opportunities. The delay is not related to the consolidation process. Regarding the edge data center contribution, the backlog is multi-year, and the average contract duration is about three years. The slide was meant to show market interest rather than provide 2025 guidance.
Q: Could you provide expectations for 2025 figures or updated CapEx figures for 2026 and 2027? A: (CFO) We are not updating any guidance. The overall CapEx plan remains unchanged, though there might be a shift from 2026 to 2027. For 2025, we expect growth in line with our industrial plan, with edge and CDN services contributing significantly. However, the diversification impact on EBITDA will remain negative until we reach breakeven by the end of the plan.