On Tuesday, Telekom Austria (OTC:TKAGY), operating under the A1 Group, disclosed its financial results for the third quarter and the first nine months of 2024. The company reported a 2.1% increase in revenue compared to the third quarter of 2023, attributing the growth to its strategic value-protecting measures and a robust fixed-line performance in Central and Eastern Europe (CEE), despite a downturn in equipment revenues.
Service revenues for the group saw a 3.1% climb, propelled by the aforementioned value-protecting measures and strong fixed-line performance in the CEE region. However, the company faced an operational increase in core operational expenses (OPEX), mainly due to higher total workforce costs. Restructuring costs also rose but were nearly offset by one-off effects.
The A1 Group's EBITDA (earnings before interest, taxes, depreciation, and amortization) improved by 5.1%, reaching €548 million, with a margin enhancement from 39.3% to 40.4%. Nonetheless, the net result for the first nine months was 1.3% lower on a proforma basis due to increased depreciation and amortization (D&A), and 11.8% lower on a reported basis, further impacted by higher D&A for towers.
Capital expenditures (CAPEX) were 21.2% lower year-over-year in the first nine months, reflecting reduced spectrum CAPEX and savings in other areas. This, coupled with the better operational result, led to a 28.7% boost in free cash flow for the same period.
In addition to financial achievements, A1 Group has been recognized for its sustainability efforts, receiving a Gold medal and ranking in the top 3% of the Ecovadis sustainability rating. The company has confirmed its outlook, anticipating total revenue growth of 3-4%, with CAPEX excluding spectrum projected to be around €800 million.
Telekom Austria maintains its ambitions for the 2024-2026 period, targeting annual revenue growth of 3-4%, EBITDA growth of 4-5%, and a CAPEX of €2.8 billion plus frequencies.
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