• Total Revenue: Increased by 3.6% to over PLN3.5 million.
• Adjusted EBITDA: Increased by 12.7% year over year.
• Net Profit: Posted PLN250 million in the third quarter.
• Free Cash Flow: Last 12 months' free cash flow amounted to PLN1.1 billion, excluding CapEx on renewable and hydrogen projects.
• Net Debt-to-EBITDA Ratio: 3.4 at the end of the third quarter.
• ARPU per B2C Customer: Increased by 5% year over year to PLN77.2.
• ARPU per B2B Customer: Increased by 4% year over year, exceeding PLN1,500.
• Churn Rate: Decreased to 7.2%.
• Green Energy Segment EBITDA: Generated PLN82 million in the third quarter.
• TV Advertising Revenue: Increased by 5.2% year on year to PLN965 million.
• Green Energy Production: Produced more than 300 gigawatt hours of electricity in the third quarter, up by 57% year on year.

• Warning! GuruFocus has detected 6 Warning Signs with FRA:CP9.

Release Date: November 21, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cyfrowy Polsat SA (FRA:CP9) reported a 12.7% increase in adjusted EBITDA, driven by strong operating performance and cost control.
• The company expanded its 5G Plus network to over 3,800 transmitters, covering over 25 million people in Poland.
• Cyfrowy Polsat SA secured exclusive broadcasting rights to the Formula 1 Grand Prix races from 2025 to 2028, enhancing its sports content offering.
• The company achieved significant milestones in its green energy strategy, including the start of test production of green hydrogen and the installation of a 2.5-megawatt electrolyzer.
• The green energy segment generated PLN82 million of EBITDA in Q3 2024, with expectations to contribute PLN500 million to PLN600 million annually by 2026.

Negative Points

• The media segment faced challenges due to competitors holding broadcasting rights to major sporting events, impacting TV advertising growth.
• Despite a 3% increase in advertising revenue, Cyfrowy Polsat SA's market share in TV advertising and sponsorship was slightly below the market growth rate.
• The pay TV base is under pressure from a declining number of satellite TV services and the phasing out of the low-margin IPLA product.
• The company's net debt-to-EBITDA ratio increased slightly to 3.4, indicating a need for careful financial management.
• The B2C and B2B services segment's EBITDA was negatively impacted by a write-off of photovoltaic panel stock.

Q & A Highlights

Q: Is it expected to reach a 4.0 net debt to EBITDA this year or in 2025? A: Katarzyna Ostap-Tomann, CFO, stated that for 2024, they do not expect to reach 4.0. For 2025, she could not commit to a definitive answer as it depends on the pace of spending and incoming funds.

Q: Are the nine-month results in the energy segment better than expected or in line with targets? A: Maciej Stec, Vice President, confirmed that the results are better than expected due to slower energy transition in Poland, ahead-of-schedule execution of wind farm projects, and better energy prices.

Q: What is the outlook for adjusted EBITDA next year? A: Katarzyna Ostap-Tomann, CFO, mentioned it is too soon to provide an outlook for next year's EBITDA but assured that the company is working towards improving it.

Q: Is there any update on the family dispute? A: Miroslaw Blaszczyk, CEO, stated that they do not comment on shareholder-related news and focus on building the group's value. The company operates normally and is not involved in any ongoing proceedings.

Q: How much CapEx should be expected for the green energy segment from Q4 2024 to the end of 2025? A: Katarzyna Ostap-Tomann, CFO, estimated it would be over PLN1 billion, primarily due to the Cz?uchow project, which is a significant investment.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.