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Sýn hf.: Financial results below expectations but positive outlook

Sýn´s Q2 2019 financial statement was approved by Sýn´s CEO and Board of Directors at a board meeting on August 28, 2019.

At the beginning of the year, the accounting treatment of broadcasting license rights was changed. Broadcasting license rights was classified as inventory but as of January 1, 2019, it is classified as intangible assets. Amounts for 2018 have been restated.

Main results:

• Revenue for the second quarter of 2019 amounted to ISK 5,023 million, a decrease of 3% from the previous year. Revenue in the first 6 months decreased by ISK 189 million between years, or 2%.
• The quarter’s EBITDA amounted to ISK 1,216 million, compared to ISK 1,279 million in the second quarter of 2019. The EBITDA margin was 24.2% in the second quarter of 2019 compared to 24.6% in the same quarter last year. EBITDA for the first half of 2019 was ISK 2,476 million, a decrease of ISK 8 million from same period in 2018. Adjusted EBITDA for the first half of 2019 in relation to IFRS 16 affect was ISK 2,165 million compared with ISK 2,468, which is a decrease of ISK 303 million.
• Loss in the period amounted to ISK 215 million which is an increase of ISK 206 million compared to 1H 2018. Profit in the first half of the year amounted to ISK 455 million which is an increase of ISK 413 million from 1H 2018.
• Investment in the period amounted to ISK 1,833 million, thereof ISK 1,006 million in property, plant and equipment and intangible assets (excluding broadcasting license rights) and ISK 827 million in broadcasting license rights.
• Updated EBITDA outlook for 2019 is ISK 5.6 bn. Existing FCF outlook remains unchanged but will be at the lower bound of the range 1.6 – 2.0 bn. The outlook for total investments remains unchanged in the range of 3.8 – 4.2 bn. 

Heiðar Guðjónsson, CEO:

„The results of the quarter are a disappointment. Previous forecasts failed. The main reasons are price pressure in the telecom market, with offers of free services for a limited time, and broadcasting costs were higher than forecasted.
The new management came in late May and has worked hard this summer. The cost basis of the Company has been lowered with a realized savings later this winter of more than 50 million per month. We have merged business units and reduced number of middle management and employees. We have renegotiated contracts with vendors and reduced their numbers. Our business forecast method has been overhauled which will lead to more accurate earnings estimates.
The entire Company came together in June to produce a new strategic plan. The outcome is very clear and was unanimous. Our employees are therefore well prepared, and motivated, to deliver on our common goals. In relation to the new strategic plan changes have been made to the organizational chart to strengthen communication within the firm and increase collaboration. All income generating divisions now report directly to the CEO, which has also responsibility for human resources and a new division, Communications, which includes the marketing department. A new communication strategy has been produced and our brands have been better defined.
The focus this winter will be on digital transformation and better services for our customers. We have excellent products which we are proud of and need to introduce properly to the market this winter. “

For further information, please contact:
Bara Thordardottir, Director of Communications, barath@syn.is, tel. + 354 66 99 299