2021 closed with strong performance for the OTE group which showed a 6% increase in the Customized EBITDA (AL) due to positive performance in Greece and Romania. At the same time, for the whole of 2021, it recorded an increase in Free Cash Flows. The management of the group proposes a dividend of 0.558 euros per share.
At the fourth quarter level, the adjusted EBITDA (AL) of the Group recorded an increase of 12%, while at the same time revenue growth was recorded in all sectors. Revenue from services increased by 2%, with a positive sign in Mobile, Broadband and Television. The sign of the main operating indices (KPIs) was also positive, with an increase of 22% in the subscribers of fiber optic services, with the penetration amounting to 51%. In addition, the development of the FTTH network was accelerated, which was available to 563 thousand households and businesses at the end of 2021.
At the same time, there was a strong increase to € 10.4 million of Adjusted EBITDA (AL) of mobile in Romania, while positive trends were recorded in operating indices (KPIs).
Commenting on the sizes, the President and CEO of OTE Michalis Tsamas stated:
“With strong performance in the fourth quarter, we are dynamically closing a very important year, during which we achieved a significant increase in our revenues and, above all, our operating profitability. In Greece, revenues in all our individual activities increased significantly. This reflects the We have created a strong competitive position, constantly investing during the decade of financial crisis, to ensure the excellent experience of our customers and the efficiency of our networks.In Romania, our activities, now exclusively in mobile, are stabilizing.
We are laying the foundations for consistently strong performance in the years to come. We are dynamically accelerating the development of the FTTH network, we are expanding the 5G network at a fast pace, we are strengthening our commercial activities and we are constantly improving our operational efficiency. We focus our efforts on these areas because they are crucial both for our future and for the development of the markets in which we operate.
OTE’s shareholder remuneration policy provides the flexibility needed to meet increased investment needs, short-term instability and a competitive environment. The total remuneration of our shareholders for 2022 is increased by 5% compared to 2021. ”
Revised Remuneration Policy to Shareholders
Following the approval by the Board of Directors of the Company’s strategic plan to expand and accelerate the development of the fiber optic home network (FTTH), the Remuneration Policy to the Shareholders was revised as follows:
Provided that the external and macroeconomic environment will remain stable, the Company intends to pay to its shareholders, through a combination of dividend payment and Repurchase Programs of Own Shares (for the purpose of their cancellation), 70% -100% of the annual net free cash flow. In the coming years, the total fee will be divided between dividends and repurchase of treasury shares at a rate of 50% between dividends & repurchase of treasury shares.
The Board of Directors will consider the use of reserves from the cash flows that may accumulate in the medium term along with the surpluses that have already been created.
The implementation of the revised shareholder remuneration policy will start in 2022 and will take into account the forecasts of net free cash flows for the current year, ie 2022, as a basis for calculating the total remuneration of shareholders. In the same way, the remuneration policy will be applied in the coming years, ie the calculation basis for the total remuneration of shareholders in 2023 will take into account the forecasts of net free cash flows for 2023 and so on.
In 2022, the total remuneration will amount to € 500 million, increased by 5% compared to 2021 and will be divided equally into dividends and purchases of own shares.
Perspectives
OTE accelerates the development of the fiber optic network to home (FTTH) in 2022 and the following years, aiming to reach 3 million homes and businesses by the end of 2027. With the development of the FTTH network, OTE creates the infrastructure that Greece needs to continue its digital transformation and economic recovery. This significant investment will enhance OTE’s performance and competitiveness in the coming decades, while allowing OTE to offer FTTH upgrades to virtually all subscribers currently receiving services through copper or FTTC infrastructure.
In addition to FTTH, the dynamic development of the 5G network, enables the Group to offer better services to customers, to support the digital transformation of the country and to enhance its profitability. Continuous investments in network infrastructure and customer experience will return to OTE to achieve sustainable growth in all sectors and further increase profitability.
In recent months, OTE has taken significant commercial actions to strengthen its market presence, expecting a positive response from customers to its upcoming initiatives. The upgrade of broadband speeds is expected to further increase customer confidence and enhance the penetration of high speeds.
The implementation of the Recovery and Sustainability Plan is a decisive factor both for the financial prospects of the country and for the activity of OTE in the field of ICT, the importance of which is expected to increase significantly for the Group in the coming years.
For 2022, the adjusted investments are estimated to increase to approximately € 620 million, in order to cover the faster development of the FTHTH network, as well as other requirements. Free cash flows are estimated at around € 600 million in 2022. The total Shareholder Remuneration for 2022 will be around € 500 million and will be divided equally into a € 250 million proposed dividend of € 0.558. per share, and in an Equity Acquisition Program of approximately € 250 million.
In the fourth quarter of 2021, the consolidated revenues of the OTE Group showed an increase of 5.0% and amounted to € 891.5 million. In Greece, revenues increased by 4.5% to € 812.5 million, supported by the constant demand for higher speeds in the fixed, the increased data traffic in the mobile and from increases in revenues in individual functions. In Romania, in the first quarter of operation of the autonomous mobile telephony company, revenues amounted to € 82.8 million, down by 1.8% in the quarter, but improved compared to previous quarters.
The total operating expenses of the Group, excluding depreciation, amortization and charges related to reorganization costs (mainly Voluntary Retirement Programs) and non-recurring legal cases, amounted to € 541.8 million in the fourth quarter of 2021, increased by 2021. 1.5% compared to the fourth quarter of 2020, partly reflecting higher revenues.
The Group’s adjusted EBITDA (AL) profitability increased by 12.4% to € 331.8 million, leading to a margin of 37.2% due to the positive performance in Greece and Romania. In Greece, adjusted EBITDA (AL) profitability increased by 7.2% to € 321.4 million, and the EBITDA margin reached 39.6%, higher by 100 basis points. Mobile in Romania recorded adjusted EBITDA (AL) profit of € 10.4 million, an improvement of around € 5 million on a comparable basis.
The Group recorded pre-tax profits of € 143.0 million, higher by € 94.0 million compared to the fourth quarter of 2020, mainly due to the reduction in costs related to voluntary retirement programs, as well as higher profitability. in Greece and Romania.
The Group’s income tax amounted to € 42.4 million in the fourth quarter of 2021, increased by 28.5% compared to the fourth quarter of 2020, reflecting the highest pre-tax profits in the quarter.
Adjusted investments in fixed assets amounted to € 160.5 million, down 1.2% from the fourth quarter of 2020. Investments in Greece and mobile Romania amounted to € 157.5 million and € 3, respectively. 0 million respectively. In the fourth quarter of 2021 the Company paid € 25 million for the renewal of the 2100 MHz band in Romania (not included in the adjusted numbers). For the whole year, the adjusted investments amounted to € 559.0 million, increased by 2.7% compared to last year.
Adjusted free cash flows after leases amounted to € 148.7 million, down 41.7% on an annual basis, mainly due to higher taxes paid and lower working capital in the quarter. Free cash flow amounted to € 100.6 million, up 15.8% year-on-year due to higher payments for spectrum frequencies and voluntary retirement plans in the fourth quarter of 2020. Working capital was affected during the quarter and year mainly from revenue growth and pricing timing in some ICT projects.
The adjusted net borrowing of the Group as at 31 December 2021 was € 775.6 million, reduced by 25.0% compared to 31 December 2020. The adjusted net borrowing of the Group corresponds to 0.6 times the annual adjusted EBITDA (AL ).
Source: Capital
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