Interim Financial Report at 31 March 2019 examined and approved by the Board of Directors
Rome, 15 May 2019
The Board of Directors of Infrastructure Wireless Italiane S.p.A. (INWIT), which met today, examined and approved the Interim Report on Operations as at March 31, 2019.
Main results at 31 March 2019
The adoption of IFRS16 has modified the composition of the main economic and financial indicators, precluding immediate comparison with previous period results.
More specifically, for the first quarter of 2019, the following should be noted:
- Revenues amounted to 94.9 million euros, down 0.6% compared to the same period in 2018 but up 3.6% if one excludes the one-off charge of 3.9 million euros booked in the first quarter of 2018.
- EBITDA amounted to 82.8 million euros, up 61.1% compared to the first quarter of 2018 (excluding the aforementioned one-off charge in the same period in 2018). This value is affected, in the amount of 29.2 million euros, by the adoption of accounting standard IFRS 16 in application of which, with reference to the lease contract liabilities that do not constitute the provision of services and which have a residual duration of more than 12 months, the rents are no longer recorded as costs for purchases of goods and services, but must be reported in the statement of financial position as a liability of a financial nature, consisting of the present value of future rents, with the right to use the leased asset, amortised over the probable contractual duration, being reflected in the assets.
- The comparable EBITDA for the first quarter of 2019 – prepared using the previous accounting standards – amounted to 53.5 million euros, up 4.2% compared to the first quarter of 2018, excluding the one-off charge.
- The EBIT amounts to 51.7 million euros, a decrease of 0.7% compared to the same period in 2018, but up 7.4% excluding the one-off charge 2018.
- The comparable EBIT for the first quarter of 2019 amounted to 49.3 million euros, up 2.3% compared to 2018 excluding the one-off charge.
- The result for the period is positive at 32.3 million, a decrease of 11.0% compared to the same period in 2018, down 0.2% when excluding the one-off charge.
- The result of the comparable period is positive at 34.4 million, down by 5.4% compared to the same period in 2018.
- Industrial investments for the period came to 7.6 million euros.
- Net Financial Debt totalled 686.407 million euros, including in particular the increase of 668.982 million euros deriving from the application of the new accounting standard IFRS 16 (Leasing). Excluding this impact, Adjusted Net Financial Debt is equal to 17.7 million euros, a significant improvement compared to 31 December 2018 (48.088 million euros).
In QI 2019, INWIT continued to develop its business by taking advantage of the opportunitiesoffered by themarket. In particular:
- We continued to enhance the value of our infrastructure assets by progressively increasing the tenancy ratio (average operator presence per site). At 31 March 2019, the value was 1.9x, confirming the amount at the end of 2018.
- We continued to increase efficiency with our pursuit of the lease renegotiation and land acquisition plans.
- The demand for new sites is being met, reaching 550 new plants from the date of the award.
- The company continued with its multi-operator microcell coverage plan in places with the highest concentration of users and traffic, reaching 2,600 remote units.
- It has modernised its sites, reaching 630 connections via fibre backhauling.
“The first quarter of 2019 also closed positively, with a slight increase. The company is strongly committed to concluding the agreement with Tim and Vodafone. We firmly believe in this agreement, the negotiation of which is continuing according to plan,” stressed the Chief Executive Officer, Giovanni Ferigo, “that will give new impetus to the growth of INWIT thanks to the long-term collaboration with two leading operators. The new structure will allow us to continue with and accelerate further our site development and modernisation plan and the development of new business”.
Outlook for 2019
The wireless infrastructure market is continuing its profound transformation and demand for services from mobile operators and other radio network operators is growing.
Mobile Operators must increase their Service Access Points to expand 4G coverage and prepare for the transition from 4G to 5G.
Wireless Fixed Access providers are also expanding their networks to increase coverage and improve the quality of service offered to customers.
Other radio network operators such as IoT and “Public Safety” providers are already on the market and new entrants are expected to specialise in specific product/market relationships through the innovative use models enabled by 5G.
These market dynamics, combined with the growing willingness of operators to share network infrastructure elements, lead INWIT to expect further growth in traditional business and a strong acceleration in new businesses.
Corporate governance issues
In place of Stefano Siragusa and Mario Di Mauro, the Board of Directors has appointed Piergiorgio Peluso and Carlo Nardello, non-executive Directors, who will remain in office until the next Shareholders’ Meeting.
Piergiorgio Peluso was appointed Chairman of the Board of Directors, without executive powers.
The Board also supplemented the composition of the Strategic Committee with the appointment of Peluso and Nardello. The curricula vitae of the Directors Peluso and Nardello – who do not hold shares issued by the Company – will be available on the Company’s website.
Finally, for logistical reasons, the company’s board of directors has resolved to transfer the registered office in Milan from Via Giorgio Vasari 19 to Via Gaetano Negri 1.