Tilkynning frá OMX | 29.8.

Sýn hf. : 61% revenue growth but high operating costs and capital investment related to integration - increased synergies and stronger operations in 2H

The interim financial report for Sýn hf. for the second quarter of 2018, was
approved by the company's Board of Directors and CEO at a board meeting on
August 29th, 2018. In December 2017, the company acquired certain assets and
operations of 365 Media hf., this affects the comparisons of amounts between
years.


· Income in the second quarter of 2018 amounted to ISK 5,444 million, an
increase of 61% from the previous year. Income in the first half of the year
amounted to ISK 4,221 million, a 3% decrease from previous year.
· The quarter's EBITDA amounted to ISK 718 million, a 3% decrease from previous
year. EBITDA for the first six months amounted to ISK 1,436 million, a 3%
decrease from previous year.
· EBITDA adjusted for one off items in relation to the acquisition amounted to
ISK 748 million, a 3% decrease from the previous year.
· Loss in the period amounted to ISK 4 million, a decrease of 102% from the
previous year. Profit for the first half of the year amounted to ISK 52 million,
an 88% decrease from previous year.
· Loss per share was ISK 0.01 in Q2 and was ISK 0.19 for the first six months of
the year.
· The quarter's investment activies amounted to ISK 854 million, an increase of
59% from the previous year due to intergration projects.
· EBITDA outlook for 2018 is estimated at ISK 4,000-4,400 million from regular
operations. The company' forecast for 2018 is currently in the lower end of the
range. One-off items in the first half of the year are ISK 145 million. It is
expected that the one-off items will not have material effect on the second half
of the year. The estimated capital expenditure ratio is 8-10% of income and will
be close to the upper bound considering front-loaded investment in relation to
integration projects.

Stefán Sigurðsson, CEO:

"The second quarter was characterized by very large synergy projects.  Important
milestones were reached, such as a successful transfer of all 365 mobile
customers to Sýn's mobile telecom infrastructure which required sim card change
for all those customers. Other projects include a merger of numerous departments
as well as integration of number of systems. A significant part of the
integration of the businesses relates to physical movement of operations from
Skaftahlíð to Suðurlandsbraut. By end of the quarter, 69% of the employees of
the acquired units have now moved to our HQ at Suðurlandsbraut. This means that
important synergy projects have been finalized which will deliver fast decrease
in costs from the third quarter. We therefore are expecting much stronger
quarters in 2H, both because of lower costs as well as seasonally stronger
income quarters, where income of telecommunications are historically strong 3Q
and Media a strong 4Q.

EBITDA of the quarter is below our expectations, especially due to higher cost
following the merger projects. Total costs are not only higher due to one off
costs but also due to costs related to extensive merger related projects that
require substantive extra employee work load, double systems in operations,
double housing as well as limited opportunity of the company to adapt to the
quarters general wage increases in the middle of the merger process. The higher
merger costs than expected is the main reason for the EBITDA being lower than
anticipated. The execution of merger projects is however on plan which will
start to deliver better operations in 2H of 2018. More costs in 1H than
anticipated means that the company is currently by the lower end of its EBITDA
outlook range for the year. The outlook range for EBITDA of 2019 and 2020 are
unchanged.

Total revenues and number of clients are in accordance with original plans of
the acquisitions which is an important milestone considering complex client
transfers between systems that have been executed in the integration. The
company has as well streamlined its product portfolio after the merger, for
example strengthened its TV proposition with lower price points as well as
renewed and new content rights such as UEFA and the Italian League recently.

We are pleased that the largest and most challenging period of the merger,
regarding risk, is now completed and look forward towards bright times with
lower costs and positive EBITDA development for the next quarters in line with
the overall aim of the merger. We wish to thank Sýn's employees for outstanding
and relentless work to build the foundation of a leading integrated media and
telecommunications company "

Press release Q2: 
http://hugin.info/155584/R/2213225/863178.pdf

Investors Presentation Q2: 
http://hugin.info/155584/R/2213225/863179.pdf



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Source: Sýn hf. via GlobeNewswire