In the last two weeks of the first quarter, the global coronavirus pandemic significantly affected business, trading and operational activities of O2 Czech Republic. There was a significant slowdown in the trade channels activity in connection with restrictions on the movement of the population in the state of emergency. These are, along with the roaming revenue loss, the main reasons why O2 achieved only modest growth in key indicators. "Nevertheless, I am optimistic about the future, as it is clear that a substantial part of the economy and people's lives are moving to the digital environment, in which we are a key actor," says Jindřich Fremuth, CEO and Chairman of the Board of O2 Czech Republic. "At the same time, the crisis period has accelerated the digital transformation of O2 itself, which will enable us to achieve higher efficiency in the coming period," he added.
"Our successful strategy was confirmed by almost 12% year-on-year growth in EBITDA for the first two months of 2020. After the Czech government declared a state of emergency and adopted a number of extraordinary measures, EBITDA declined by 3.2% year-on-year in March 2020," comments Tomáš Kouřil, Deputy Chairman of the Board of Directors and Chief Financial Officer of O2 Czech Republic. Other financial indicators recorded similar development. "Our strategy works. However, at this moment, it is impossible to make a reliable estimate of neither the future development nor its impact on our financials," he added.
KEY FINANCIAL INDICATORS OF THE GROUP*
* Does not yet reflect the full impact of the COVID-19 pandemic, which did not manifest itself until the second half of March 2020.
Financial indicators | 1Q 2020 | 1Q 2019 | 1Q20/1Q19 |
Operating revenue | 9,590 | 9,249 | +3.7% |
- CZ mobile revenue | 4,904 | 4,840 | +1.3% |
- CZ fixed revenue | 2,954 | 2,629 | +12.4% |
- SK revenue | 1,767 | 1,839 | -3.9% |
Total costs | 6,534 | 6,354 | +2.8% |
- of which operating costs | 2,013 | 1,900 | +6.0% |
EBITDA | 3,096 | 2,906 | +6.5% |
EBITDA margin | 32.3% | 31.4% | 0.9 p.p. |
Net profit | 1,268 | 1,236 | +2.6% |
Although the global COVID-19 pandemic crisis is complicated for O2 itself, we understand our role in society and we respond to individuals' needs.
O2 has taken several measures in order to as quickly as possible assist the state, customers and the economy to handle the tough COVID-19 pandemic situation and to help with the massive relocation of activities to digital space. The high standard of O2's data services is crucial for managing the current health crisis as well as a subsequent economic one.
O2 considers only natural to help swiftly, when circumstances so require. Thanks to the stability and quality of its network, in which it intensively invests billions of crowns every year, it was the first operator to offer unlimited data for all people, who needed to be in contact with their loved ones or work remotely during difficult times. O2 has also been helping through many other activities. In the first three weeks since the state of emergency was declared, O2 provided its help to customers, the state and non-profit organizations in the amount of almost CZK 400 million in the following areas:
The total number of mobile registered customers reached 5,862 thousand at the end of March 2020. The number of contract customers reached 3,259 thousand, the number of mobile prepaid customers was 1,945 thousand, while the number of M2M SIMs stood at 658 thousand as at 31 March 2020.
The number of customers of any O2 TV tariff provided over O2 fixed line (IPTV) as well as over internet connection from any provider (OTT), reached 459 thousand as at 31 March 2020 including customers subscribed for monthly prepaid O2 TV Sport Pack online and O2 TV HBO and Sport Pack tariffs. The 15% year-on-year growth of new customers in March contrasts with the 65% year-on-year increase in the previous two months.
The number of broadband internet customers served via cable as well as via wireless technology reached in total 840 thousand as at 31 March 2020. While the number of new customers grew by 11% year-on-year in January and February, it dropped by 5% year-on-year in March.
As at 31 March 2020, the total active customer base reached 2,152 thousand in Slovakia. The contract base amounted to 1,054 thousand, the number of mobile prepaid customers was 739 thousand, while the number of M2M SIMs stood at 359 thousand.
Contacts
Lucie Jungmannová
lucie.jungmannova@o2.cz
tel: 800 163 342 (800 1 media)
O2 is the largest integrated telecommunications provider in the Czech market. At present we operate close to eight million mobile and fixed accesses, which ranks us among the market leaders in fully converged services in Europe. To users of mobile services in the Czech Republic we offer state-of-the-art HSPA+ and LTE technology. We have the most comprehensive proposition of voice and data services in the Czech Republic, and we actively exploit the growth potential of the various business lines, especially ICT. Our data centres, with total floor area of 7,300 square metres, rank us among the leaders in hosting, cloud and managed services. O2 data centres belong to the few commercial ones in Central Europe to have TIER III certification. With our O2 TV we are also the largest IPTV service provider in the Czech Republic. In January 2014, O2 became a member of the Czech investment group PPF.