Orange Polska: PLN 1.75bn net loss in 2016

At the end of 2016, Orange Polska had almost 16m active SIM cards, about 404,000 less than at the end of the third quarter 2016. At the same time, the number of mobile RGUs grew by 0.6% y-o-y, from 15,906 thousand to 15,990 thousand. The slight increase in RGUs resulted from a growth in the postpaid subscriber base from 8.4m to 9.5m (an increase by 13.4% y-o-y), which offset the decline in the prepaid customer base, falling from 7.5m to 6.5m (by 13.5% y-o-y). It was mainly related to the mandatory registration of prepaid SIM cards. Orange also states that 96% of its SIM cards were registered (yet we do not know if this figure concerns all SIM cards or only the active ones). The increase in the number of postpaid users results from the growing popularity of bundle offers, which allows for buying several SIM cards within one subscription.

The number of mobile internet customers grew annually by 33.2% from 2.0m to 2.7m. This is associated with an increase in the share of data transmission in the LTE network, which increased from 57% in Q3 to 62% in Q4 2016. The number of customers using LTE network also increased, reaching 4.3 million at the end of the year. The growth of mobile data per customer has exceeded 100% in 2016.

Adjusted sales revenues of the company amounted to PLN 11.54bn (€2.6bn) in 2016 and were lower by 2.4% compared to 2015 (PLN 11.83bn, or €2.7bn), yet the mobile revenues increased by 4.9% y-o-y. Adjusted EBITDA amounted to PLN 3.16bn (€0.7bn), which means a decline by 10.1% y-o-y (down from PLN 3.52bn, or €0.8bn), and the adjusted EBITDA margin fell by 2.3 p.p., from 29.7% to 27.4 %. The company reported a 1.75bn (€0.4bn) net loss in 2016, compared to a net profit amounting to PLN 254m (€57.7m) in 2015.

ARPU fell by 6.3% y-o-y and amounted to PLN 28.4 (€6.5), including PLN 43.8 (€10) for postpaid customers and PLN 12.2 (€2.8) for prepaid customers. The number of fixed voice clients is constantly decreasing: it fell by 6.2% y-o-y, from 4.2m in 2015 to 3.9m in 2016, while the number of internet customers fell by 3.3% y-o-y, from 2.1m to 2.0m.

Orange - Key financial indicators (PLN m) 2015 2016 Y-o-y change
Sales revenues 11,840 11,538 -2.6%
EBITDA 3,431 3,163 -7.8%
EBIDTA margin 29% 27.4% -1.6 p.p.
Net profit (loss) 254 -1,746 -787%