Zegona Communications (ZEG) H1 2024 earnings summary

Executive summary

• Completed acquisition of Vodafone Spain for €5 billion on 31 May 2024, transforming Zegona into a major Spanish telecom operator.

• Initiated transformation plan for Vodafone Spain, including management changes, organizational rationalization, and major fibre network agreements.

• Post-acquisition, secured long-term refinancing and received strong credit ratings from S&P, Moody's, and Fitch.

Financial highlights

• Revenue for the six months ended 30 June 2024 was €302.1m, with €213.6m gross profit; results include only one month of Vodafone Spain.

• Operating loss of €5.7m, with a total loss for the period of €46.0m, including €19.6m in one-off transaction expenses.

• No income tax expense recognized; deferred tax assets of €145.2m and unrecognized deferred tax assets of €1.23bn from acquired losses.

• Basic and diluted EPS for the period was (€0.07), compared to (€0.33) in the prior year.

• Cash and cash equivalents at 30 June 2024 were €112.5m, with undrawn revolving credit facilities of €500m.

Outlook and guidance

• Management confident in materially improving Vodafone Spain's performance and financial returns through strategic, operational, and financial changes.

• Ongoing transformation initiatives expected to deliver long-term, economically advantaged fibre access and improved operational efficiency.