Nos 9M22 profits up 7%

Nos improved financial results in the first nine months and incorporated in the third quarter the extraordinary effect of selling more towers to Cellnex. But excluding that effect, profits between July and September fell short of expectations in a period already marked by cost increases.

The group reported a net profit of €128.4 million in the first nine months, an amount that does not include the positive impact of the sale of telecommunication towers, the company announced this Monday. It represents a 7% growth compared to the same period in 2021.

Looking only at the third quarter, the company’s net result, excluding capital gains from the sale of towers, was positive by 43.1 million. It is, however, a year-on-year drop of 6.6% and a figure that falls below estimates. The consensus of three analysts tracked by Reuters had forecast profits of 45.6 million for this period.

This performance comes “in a very challenging context of inflation, the war in Europe and disruptions in supply chains,” said Miguel Almeida, the group’s CEO, in a statement.

In April, Nos announced an agreement to sell more telecom towers to Cellnex for €155 million. In the report published this Monday at CMVM, Nos says it has received the first tranche of €118.3 million, recognising a capital gain of €74.7 million with the operation.

Counting this extraordinary effect and a “positive contribution from associated companies of €6.6 million”, profits in the first nine months grew 59.4% to €191.3 million, while quarterly profit soared 129.6% to €106 million. However, Nos warns that it recorded €27.2 million “In other cash movements” related to VAT charged on the business, “which will generate a reverse movement when returned to the Tax Authorities in 4Q22.”

On the financial side, in the first nine months, the Nos group’s consolidated EBITDA (earnings before interest, tax, depreciation and amortisation) improved by 4.7% to €500.1 million. Total revenues increased 7.5% to €1,123.5 million, while revenues from telecommunications, the operator’s core business, rose 5.8% in the same period to €1,089 million. Revenue from audiovisuals and cinemas stood at €62.5 million, a 48.3% improvement related to the impact of Covid-19 in 2021.

On the operational side, Nos admits that “the third quarter of 2022 was the best since the beginning of the year”. Total services provided, measured by the number of revenue-generating units (RGU), grew 5.1% year-on-year in September 2021 to 10,665.2 million. The company also saw the number of bundled customers rise 6.5% to 1,071.2 million, while mobile subscribers increased 8.3% to 5,642.3 million.

Despite the generally positive data, Nos feels the pressure on the cost side. According to data released this Monday, operating costs in the first nine months, excluding depreciation and amortisation, rose 9.9% to €623.4 million. Including only the costs of the telecommunications business, the increase was 6.7%, to €620.8 million.

The company assumes “cost containment efforts whenever possible”, which “have provided the maintenance of a positive margin, despite inflationary pressure at a global level”.