Rai Way (RWAY) Q2 2024 earnings summary

Executive summary

• First half 2024 results showed core revenues up 1.2% year-over-year to EUR 137.6 million, driven by CPI, regional broadcast services, and increased tower hosting volumes.

• Adjusted EBITDA increased 3% year-over-year to EUR 93.5 million, with margin improving by 120bps to 68%, supported by cost control and higher personnel cost capitalization.

• Net income grew 5.2% year-over-year to EUR 47.2 million, reflecting higher profitability.

• Organizational restructuring created three divisions: broadcasting and media, infrastructure, and data center network, to support diversification and new markets.

• Five Edge data centers completed in major cities, now operational and ready for commercialization, with a collaboration agreement signed with Oracle.

Financial highlights

• Revenues rose 1.2% year-over-year to EUR 137.6 million in the first six months, with both media distribution and digital infrastructure segments growing.

• Adjusted EBITDA reached EUR 93.5 million (+3.0%), with margin at 68.0%, up 120bps year-over-year.

• Net income increased 5.2% to EUR 47.2 million.

• Free cash flow to equity reached EUR 64 million, up 3.5% from 2023.

• Net debt at EUR 145.9 million, with Net Debt/Adjusted EBITDA at 0.80x as of June 30, 2024.

Outlook and guidance

• Full-year 2024 adjusted EBITDA growth confirmed, supported by CPI, regional refarming, and DAB network contributions.

• Growth tempered by lack of energy tax credits and higher infrastructure costs, but offset by OpEx reductions and non-recurring positive factors.

• Maintenance and development CapEx expected in line with previous year, with most development CapEx focused on diversification.

• Edge data center commercialization just started, with limited revenue impact expected in 2025 and fill factor ramping up over 3-4 years.

• Confidence in 2024 EBITDA growth targets has increased.