DNA Plc’s Business review for January-March 2020

Summary of DNA’s key figures for January-March 2020

Unless otherwise stated, the comparison figures in brackets refer to the corresponding period in the previous year (reference period). Figures are unaudited.

• Mobile revenue grew 6% and amounted to EUR 138 million (130).
• Total revenue increased 1% year-on-year and came to EUR 232 million (230).
• EBITDA increased 7% and was EUR 82 million (76).
• Operating profit increased 14% and was EUR 40 million (35).
• Revenue per user (ARPU) for mobile communications increased 5% and was EUR 17 (16).
• The number of mobile subscriptions decreased and was 2,690,000 (2,694,000). The number of postpaid (contract) subscriptions grew by 10,000 and the number of prepaid subscriptions decreased by 14,000.
• The number of fixed subscriptions (telephony, Internet and TV) grew 2% and was 877,000 (858,000).
  
  

CEO’s review

The first quarter of 2020 closed under exceptional circumstances. The spread of coronavirus from China and the resulting global pandemic changed the world in a flash, also Finland and DNA’s market and operating environment. At the end of the quarter, the effect of the crisis was quickly apparent in areas such as higher volume of customer service and a slowdown in mobile device sales at DNA Stores. As people stayed at home to work and study, the data volumes in DNA’s network increased significantly. 

Communication networks gain importance under exceptional circumstances like these. To ensure sufficient network capacity also under these special circumstances, we maintain and build our 5G and 4G network infrastructure continuously. To safeguard operational reliability, our network management is decentralized.

DNA fared well under these challenging and exceptional market conditions. Total revenues for the January-March period increased slightly year-on-year and amounted to EUR 232 million (230). The positive development was fuelled in particular by our mobile revenues, which grew 6% from the reference period. Growth was mostly due to the positive development of customer billing and our postpaid subscription base. EBITDA developed strongly in the first quarter. The favourable development was due to e.g. increased mobile service revenue and operational efficiency. EBITDA increased 7% from the reference period and was EUR 82 million. Operating profit increased by 14% to EUR 40 million (35).

Our mobile communication subscription base decreased by 4,000 in the January-March period, due to a decrease in prepaid subscriptions. Our postpaid (contract) subscription base increased by 11,000.  Revenue per user (ARPU) for mobile communications increased more than 5% year-on-year and was EUR 17 (16). Our fixed-network subscription base grew by 19,000, boosted by new Internet connections in particular.

DNA has launched the sales of 5G subscriptions for both consumer and corporate customers. Mobile device manufacturers are expected to provide new 5G models to lower price points as the year progresses, and demand for subscriptions is expected to pick up once these are available. We launched the sales of our 5G Fixed Wireless Access service at the end of 2019. During the first part of 2020, DNA’s 5G network service has been made available to almost 15 residential areas. During the second quarter, our 5G network will be expanded to approximately 10 new locations, including Lahti, Jyväskylä, Oulu and Kuopio. The benefits of 5G and its positive impact on customer experience will become more evident as customers use increasingly rich content, higher resolution videos, and services such as online gaming, where low latency is critical. We will continue to improve and expand our 4G network parallel to the 5G investments.

Jukka Leinonen
CEO

Key figures 

The calculation method of the key figures presented in this table differs from that of DNA’s previous key figures. The figures in this table are presented the same way as the key figures published by DNA’s parent company Telenor ASA except for the figures for total revenues and EBITDA. The difference in total revenues and EBITDA is due to differences in the classification of certain items. An appendix to this review contains the quarterly figures for 2019 according to the new calculation method.

EUR million	1-3/2020	1-3/2019	Change, %	1-12/2019
Subscription and traffic 1)	125	118	6 %	486
Interconnect revenues and inbound roaming	10	10	4 %	40
Mobile revenues company's subscriptions	135	128	6 %	525
Other mobile revenues	3	2	36 %	10
Total mobile revenues	138	130	6 %	535
Non-mobile revenues 4)	41	43	-5 %	182
Total revenues mobile operation	178	173	3 %	717
Telephony	4	5	-17 %	18
Internet and TV 3)	36	36	0 %	145
Data services	-	-		-
Other revenues 6)	9	12	-24 %	50
Total fixed retail revenues	50	53	-7 %	214
Wholesale revenues 5)	4	4	-2 %	15
Total Revenues fixed operation	53	57	-7 %	229
Total revenues2)	232	230	1 %	946
Of which internal revenues	-	-		-
EBITDA before other income and expenses	82	76	7 %	306
Other income and expenses	-	-	-	-
EBITDA 2)	82	76	7 %	306
Depreciation and amortisation	(42)	(41)	2 %	(172)
Impairment losses	-	-		-
Operating profit	40	35	14 %	134
EBITDA before other income and expenses/ Total revenues (%)	35	33	7 %	32
EBITDA/Total revenues (%)	35	33	7 %	32
Operating profit/Total revenues (%)	17	15	13 %	14
Capex	28	32	-14 %	159
Capex excl. licences and spectrum	17	18	-7 %	140
Mobile
No. of mobile subscriptions (in thousands)	2 690	2 694	0 %	2 696
of which prepaid 7)	229	243	-6 %	225
Average traffic minutes per subscription per month (AMPU) in the quarter	-	-		-
Average revenue per subscription per month (ARPU) in the quarter 9)	17	16	5 %	16
of which contract (postpaid)	18	17	4 %	17
of which prepaid	7	6	13 %	7
Fixed
No. of subscriptions retail market (in thousands):
- Telephony	34	38	-10 %	36
- Internet	550	485	14 %	542
- TV  8)	293	335	-13 %	330
ARPU in the quarter - Telephony	40	45	-11 %	43
ARPU in the quarter - Internet	16	17	-7 %	17
ARPU in the quarter - TV	6	6	-7 %	6

¹⁾ Subscription and traffic revenues consist of revenue from mobile subscriptions and traffic.

²⁾ The difference in the total revenues and EBITDA figures published by DNA and Telenor is due to some differences in classification.

³⁾ TV = revenue from the following services: cable pay-TV and DNA TV.

⁴⁾ Other revenue from fixed services; Terrestrial TV / Digita, maintenance, WLAN/LAN, data security, special services (for professionals) etc.

⁵⁾ Wholesale revenues = Access & Capacity services, fixed voice interconnection etc.

⁶⁾ Non-mobile revenues = device sales and sales from non-mobile business

⁷⁾ Prepaid subscriptions used or loaded within the past three months.

⁸⁾ Cable pay-TV and DNA TV subscriptions 

⁹⁾ ARPU = Monthly mobile revenues (company’s subscriptions) and traffic revenues + interconnection / average number of subscriptions

Additional information:

Jukka Leinonen, CEO, DNA Plc, +358 44 044 1000, jukka.leinonen@dna.fi

Timo Karppinen, CFO, DNA Plc, +358 44 044 5007, timo.karppinen@dna.fi

DNA Corporate Communications, +358 44 044 8000, viestinta@dna.fi
 

DNA’s financial reporting

Half-year financial report 2020 (January-June) will be published on 16 July 2020.

***

Attachment 1:

Quarterly figures for 2019 according to the new calculation method:

EUR Million	1-3/2019	4-6/2019	7-9/2019	10-12/2019
Subscription and traffic 1)	118	120	124	124
Interconnect revenues and inbound roaming	10	10	10	10
Mobile revenues company's subscriptions	128	130	134	133
Other mobile revenues	2	2	3	3
Total mobile revenues	130	133	136	136
Non-mobile revenues 4)	43	43	46	50
Total revenues mobile operation	173	176	182	187
Telephony	5	5	4	4
Internet and TV 3)	36	36	37	36
Data services	-	-	-	-
Other revenues 6)	12	13	12	13
Total fixed retail revenues	53	53	54	53
Wholesale revenues 5)	4	4	4	4
Total Revenues fixed operation	57	57	58	57
Total revenues2)	230	233	240	243
Of which internal revenues	-	-	-	-
EBITDA before other income and expenses	76	78	79	73
Other income and expenses	(0)	0	0	(0)
EBITDA 2)	76	78	79	72
Depreciation and amortisation	(41)	(42)	(42)	(46)
Impairment losses	-	-		-
Operating profit	35	36	37	26
EBITDA before other income and expenses/ Total revenues (%)	33	33	33	30
EBITDA/Total revenues (%)	33	33	33	30
Operating profit/Total revenues (%)	15	15	15	11
Capex	32	25	27	74
Capex excl. licences and spectrum	18	24	26	72
Mobile
No. of mobile subscriptions (in thousands)	2 694	2 698	2 708	2 696
of which prepaid 7)	243	233	237	225
Average traffic minutes per subscription per month (AMPU) in the quarter	-	-	-	-
Average revenue per subscription per month (ARPU) in the quarter 9)	16	16	16	16
of which contract (postpaid)	17	17	17	17
of which prepaid	6	6	7	8
Fixed
No. of subscriptions retail market (in thousands):
- Telephony	38	36	34	36
- Internet	485	530	535	542
- TV  8)	335	327	330	330
ARPU in the quarter - Telephony	45	43	42	40
ARPU in the quarter - Internet	17	17	17	16
ARPU in the quarter - TV	6	6	6	6

¹⁾ Subscription and traffic revenues consist of revenue from mobile subscriptions and traffic.

²⁾ The difference in the total revenues and EBITDA figures published by DNA and Telenor is due to some differences in classification.

³⁾ TV = revenue from the following services: cable pay-TV and DNA TV.

⁴⁾ Other revenue from fixed services; Terrestrial TV / Digita, maintenance, WLAN/LAN, data security, special services (for professionals) etc.

⁵⁾ Wholesale revenues = Access & Capacity services, fixed voice interconnection etc.

⁶⁾ Non-mobile revenues = device sales and sales from non-mobile business

⁷⁾ Prepaid subscriptions used or loaded within the past three months.

⁸⁾ Cable pay-TV and DNA TV subscriptions 

⁹⁾ ARPU = Monthly mobile revenues (company’s subscriptions) and traffic revenues + interconnection / average number of subscriptions