Sýn hf.: Earnings for the first quarter of 2024

Key aspects of financial performance and year-over-year comparison.

Sýn hf.’s Consolidated Interim Financial Statement for the first quarter of 2024 was approved by the Board of Directors on May 7th, 2024.

The group’s revenues in the first quarter (Q1) of 2024 amounted to ISK 5,934 million, an increase of 1.3% (Q1 2023: ISK 5,860 million). The revenue split is as follows:
- Media ISK 2,381 million, a 10.0% increase year-over-year (Q1 2023: ISK 2,165 million). Adjusted for increased revenues due to the addition of Já, the year-over-year revenue growth is 3.6%.
- Broadband ISK 1,147 million, a 3.4% increase year-over-year (Q1 2023: ISK 1,109 million).
- Mobile ISK 1,062 million, a decrease of 11.5% year-over-year (Q1 2023: ISK 1,200 million).
- Fixed line ISK 106 million, a decrease of 9.3% year-over-year (Q1 2023: ISK 116 million).
- Hosting and operating solutions (Endor) ISK 708 million, an increase of 0.8% year-over-year (Q1 2023: ISK 702 million).
- Retail sale ISK 288 million, a decrease of 12.5% year-over-year (Q1 2023: ISK 329 million).
- Other revenue ISK 242 million, an increase of 1.5% year-over-year (Q1 2023: ISK 238 million).
Strong growth in advertising revenue of 22%, of which 51% in television advertising revenue, exceeds management expectations. A decrease in mobile revenues by ISK 138 million is primarily due to a reduction in IoT revenues. There was a turnaround in home connections with a 6% growth from the previous year, and robust growth in roaming revenues (30%).
EBITDA was 23.2% of revenues or ISK 1,379 million (Q1 2023: 25.5% and ISK 1,497 million).
Operating profit (EBIT) was 2.0% of revenues or ISK 119 million (Q1 2023: 7.3% and ISK 428 million).
The quarter’s loss amounted to ISK 153 million (Q1 2023: profit of ISK 213 million) and the equity ratio was 29.5%.
Organizational changes: Termination of contract agreed with an executive director along with other personnel, departments merged, and a reduction of 20 full-time positions during the period. Annual savings are estimated at about ISK 380 million once fully realized in Q4 2024.

“The board and key executives of Sýn hf. agree that the company's profitability has not been satisfactory in recent years. We are also united in starting a strategic journey under the banners of efficiency, growth and collaboration, which aims to provide customers, employees and investors with a clear picture of the company's objectives and priorities. The company's values are Joy - Passion – Ambition, which will be the driving force behind the planned journey.

Since I started working at Sýn hf., my colleagues have shown great courage, drive and ambition to further enhance the operations of the group. This journey will continue with a clear strategy and presentation of key initiatives, thereby allowing us to regularly update market participants on the progress of projects. Unity and a clear strategy are key factors in success. It can be said that the journey is off to a good start. Organizational changes that have already been implemented this year will yield savings of about ISK 32 million per month, or about ISK 380 million on an annual basis, once their effects are fully realized.

In the first quarter, I was particularly pleased with the strong revenue growth in advertising revenues, and it is also pleasing to see a good turnaround in home connections. Additionally, roaming revenues continue to grow. However, mobile revenues have decreased from the same period last year, as reported in a recent announcement. The operational performance of the company is not satisfactory, however, significant operational improvements are anticipated in the second half of this year and next year, as the organizational changes take effect,” says Herdís Dröfn Fjeldsted, CEO of Sýn hf.

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