Hrvatski Telekom H1 2025 slides: Revenue up 4.4% as service growth accelerates

Hrvatski Telekom reported robust H1 2025 results, with total revenue up 4.4% to EUR 544.5 million, driven by strong mobile and fixed service revenue growth. Adjusted EBITDA AL increased 3.0% and net profit rose 1.6%, while the company significantly boosted capital investments by 15.1% to EUR 116.9 million, primarily for FTTH network expansion. HT's shares are trading near their 52-week high, supported by a share buyback program and a 7.2% dividend increase, as the company maintains a cautiously optimistic FY2025 outlook and explores regional M&A opportunities.

Analysis

Hrvatski Telekom (HT) demonstrated robust financial and operational performance in H1 2025, with total revenue increasing 4.4% year-over-year to EUR 544.5 million. This growth was underpinned by strong momentum in core service revenues, with mobile services up 7.4% and fixed services up 6.0%. The company translated this top-line strength into a 3.0% increase in adjusted EBITDA after leases to EUR 193.7 million, despite a significant 15.1% rise in capital expenditures to EUR 116.9 million. This heightened investment, primarily directed towards a 20% expansion of its FTTH network, reinforces its infrastructure leadership. Operationally, the key mobile postpaid segment showed strength with a 4.5% customer increase and a 5.4% rise in ARPU to EUR 15.5; however, a sharp 11.2% decline in prepaid ARPU presents a notable counterpoint to its rapid customer growth in that segment. The company's commitment to shareholder returns is evident through an ongoing share buyback program and a 7.2% dividend increase. With shares trading near their 52-week high and a cautiously optimistic outlook for low-single-digit growth in FY2025, HT is also actively evaluating regional M&A, signaling potential avenues for future expansion.

Key Decisions for Investors

• Investors should view the strong growth in high-value mobile postpaid ARPU and service revenue, coupled with a 7.2% dividend hike and share buybacks, as a positive signal of fundamental health and shareholder-friendly management.
• The significant 11.2% decline in prepaid ARPU and sluggish 0.7% growth in retail broadband access warrant monitoring as potential indicators of rising competition or pricing pressure in certain market segments.
• The company's explicit mention of evaluating regional M&A opportunities and its aggressive 15.1% increase in infrastructure capex represent potential long-term growth catalysts that could drive value beyond the current low-single-digit guidance.
• Considering the stock is trading near its 52-week high, new investors should weigh the company's solid performance against a valuation that may already price in the cautiously optimistic outlook for the full year.