Telecomunicazioni
Síminn hf. - An eventful year behind
Orri Hauksson, CEO:
The year 2022 was one of the most eventful years in Síminn's history, which spans 117 years this fall. Several major events took place during the year one after another. One of the most satisfying things for the shareholders was the operating result in the last months of the year, which led to the year's result being the best in the company's operating history, even if the profit from the sale of Míla is excluded.
We are extremely proud of this success, as there were many things competing for the attention of employees and management during the year. These include organizational changes, personnel changes and new products that were introduced. We increased diversity in the management team and prepared the company for a new future by shortening the communication channels within it. Míla's sales process was also extremely extensive and turned out to be a long-drawn-out process. In that process, more than ISK 10 billion were needlessly transferred from Síminn's Icelandic shareholders to investors on the European continent.
On the other hand, the positive thing is that the transaction was finally approved by the competition authorities which leaves Síminn as a strong and agile service company. We now believe that we can handle demanding customers in the future with increased agility and efficiency. Now that Síminn no longer owns Míla, we trust that the regulators will lift their heavy public obligations for Síminn to be able to compete in the market on an equal basis, for the benefit of all consumers.
After the sale of Míla was initially concluded in October 2021, the company's board of directors decided that the management should investigate whether the company could use the money that could be expected from the sale, partially or entirely, in more profitable projects than those that Síminn's shareholders could reasonably find on his own. It turned out that investment opportunities for Síminn in Iceland will not be of such a magnitude that Míla's sales value is needed. It then became clear that Síminn's shareholders generally do not believe that Síminn should keep large sums of cash on hand for potential investment opportunities outside of Iceland.
The management's task was therefore to get Mila's sales value into the hands of the shareholders in an efficient manner. To do that, the share capital was reduced and paid to shareholders in the amount of ISK 31.5 billion last November and will be done again at the end of March in the amount of ISK 15.7 billion if the general meeting approves the board's proposals. The second payment became possible after the bond (seller's loan) for the sale of Míla was sold. The vast majority of Síminn's share capital is owned by Icelandic pension funds, and therefore all citizens benefit from these generous payments to shareholders. If, in the future, an investment opportunity arises for Síminn of such a magnitude that they once again demand increased financing for the company, the conversation will turn around and the board and management will then request new capital from shareholders.
Several things developed against Síminn's interests at the end of last year. The exchange rate of the ISK fell which increased a significant part of Síminn's income in ISK. The collective agreements reached with most of the country's trade unions were a cause for celebration in themselves, but turned out to be more expensive than expected. The retroactivity of the contracts also increased labor costs for the year 2022 beyond expectations.
Many positive milestones were achieved in the operation. The US TV giant HBO chose Síminn at the end of the year to convey its quality content to Icelanders for the next season. This is part of a targeted improvement of Síminn's TV service for its customers. The authorities have also laid out long-term plans for 5G frequency licenses. That should be celebrated, as Síminn can now, with its suppliers, Míla, and Ericsson, design its secure 5G service for the long future throughout the country. At the end of last year, Síminn also took a new step into the world of financial technology and digital credit services, with the release of a credit card with flexible payment options called Léttkort. The reception has exceeded expectations and it is a pleasure to be able to offer borrowers flexible options. More exciting innovations are on the way.
Síminn invested significantly in digital infrastructure and TV content last year. The company's investments are now decreasing, but will remain significant this year, but will decrease rapidly thereafter. Looking at the year as a whole and the developments that have taken place, it is clear that the future is bright for Síminn."
Investor meeting 15 February 2023
An investor presentation will be held on Wednesday 15 February 2023 at 8:30 am at Síminn's headquarters in Ármúli 25, Reykjavík. During the meeting, Orri Hauksson CEO and Óskar Hauksson CFO will present the financial results. The meeting will be held in Icelandic. Documents for the meeting are available in Nasdaq's Iceland company news and on the company's investor relations website https://www.siminn.is/fjarfestar/quarterly-results.
The meeting is webcasted on: https://www.siminn.is/fjarfestakynning.
The English version of the consolidated financial statements will be available at https://www.siminn.is/fjarfestar/quarterly-results later this month.
Further information
Orri Hauksson, CEO (orri@siminn.is)
Óskar Hauksson, CFO (oskarh@siminn.is)
Attachments
2321 Rosecrans Avenue. Suite 2200
90245 El Segundo Stati Uniti