Orange Poland will not pay a dividend for 2016, saying it wants to conserve cash for investments in fibre and LTE. The announcement came alongside annual results showing a loss of PLN 1.746 billion, versus a profit of PLN 254 million in 2015. It was heavily affected by a PLN 1.793 billion non-cash asset impairment based on expected lower future cash flows coupled with an increase in the discount rate to reflect higher business risk.
Annual results were also impacted by lower EBITDA and higher net financial costs (PLN 68 million above 2015), mainly as a result of higher debt. This was partly offset by lower depreciation (down by PLN 146 million) as amortisation of the new spectrum was offset by a positive effect from extension of useful life for certain network assets.
Orange Poland's financial performance in 2016 was in line with the management's expectations. Looking forward to 2017, the company expects to achieve adjusted EBITDA in the range of PLN 2.8-3.0 billion. It will face continued pressure on revenue. In legacy fixed revenue (PSTN, wholesale), Orange anticipates ongoing structural decline. In mobile, the operator expects lower growth of equipment sales and service revenue impacted by ongoing competitive pressure, new roaming regulations and uncertainty in pre-paid.
Revenues in Q4 2016 amounted to PLN 2.981 billion, an increase of 1.9 percent compared to the same period in 2015. EBITDA grew by 9.6 percent year-on-year to PLN 640 million, and the EBITDA margin increased by 1.5 percentage points to 21.5 percent. The operator recorded a net loss of PLN 1.898 billion in Q4.
The operator reported a significant increase in convergent customers, by 20.7 percent year-on-year to 879,000. The total number of mobile accesses (SIM cards) increased by 0.6 percent over the year to 15.990 million. The post-paid customer base increased by 13.4 percent to 9.453 million, while the prepaid customer base decreased by approximately the same percentage - 13.5 percent - to 6.537 million. Mobile broadband accesses grew significantly, by 33.2 percent to 2.666 million. The fixed segment contracted further, both in fixed telephony (down by 6.2 percent to 3.932 million lines) and in fixed broadband (down by 3.3 percent to 2.015 million).
Retail fixed voice ARPU fell to PLN 37.90 from PLN 39.30 in Q4 2015, and fixed broadband ARPU (broadband, TV and VoIP) decreased to PLN 59.90 from PLN 61.20 over the same period. Mobile ARPU post-paid reached PLN 41.90, down from PLN 47.10 a year earlier, of which B2B was PLN 44 (PLN 49.80 in Q4 2015). Mobile ARPU pre-paid was reported at PLN 12.60, down from PLN 12.70 in Q4 2015. The retail ARPU reached PLN 22.60 and wholesale ARPU was PLN 5.90, while handset ARPU fell to PLN 30.60 from PLN 31.10 in Q4 2015, and broadband ARPU dropped to PLN 18.50 from PLN 20.70.
