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Breaking News, Research 10 Feb 2023

BREAKING NEWS – 10.02.2023

In the press release of 9 February 2023, Intred SpA, a telecommunications operator listed on Euronext Growth Milan since July 2018, announces that turnover as of 31 December 2022, not subject to statutory audit, amounted to € 45.50 million,  12.8% up compared to the previous year.
In our report of 4 October 2022, the estimates for 2022 turnover stood at € 47.00 million. The Company recorded a level of turnover in line with our estimates, supported mainly by sales of fiber optic connections, equal to € 26.20 million. Specifically, the most consistent growth was recorded on services with recurring fees, which represent about 86.0% of turnover, equal to € 39.30 million, with a 9.3% increase. Revenues from “one-off” products and services, on the other hand, increased by 52.5% to € 5.70 million, supported by the School Tender. The NFP amounted to € 11.50 million, compared to our estimates of € 12.47 million and a cash positive NFP of € 5.40 million as of 31 December 2021.
At the infrastructure level, in 2022, the proprietary fiber optic network reached 9,500 km, with a growth of 29.0% compared to 7,300 km as of 31 December 2021. Regarding the type of customers, the greatest growth comes from sales in the public administration (PA), with an increase of 104.0% to € 7.50 million, thanks to the effects of the School Tender. The sales performance in the Wholesale sector is also excellent, registering a +8.3% equal to € 3.80 million. The churn rate on turnover remains stable at 4.4%. In geographical terms, the most significant growth, in absolute terms, was recorded in the provinces of Sondrio (+143.4%), Como (+116.4%), Monza (+67.7%), Milan (+62.1%), Lodi (+61.9%), and Bergamo (+18.2%).
The 2022 investments amounted to € 39.3 million, mainly focused on the development of the backhauling and fiber optic access network in the FTTH mode on the territory of Lombardy. The strong acceleration of investments was necessary to achieve the objectives related to the School Tender, which can subsequently be exploited to activate connections for other users of the local PA, for professional and residential customers. Finally, regarding the School Tender, at the end of 2022, more than 2,200 schools were activated, representing 55.2% of the total. In addition, in December 2022, work began on the second School Tender, which led to the activation of 11 schools.
The positive results reported strengthen our view of the Company. For this reason, while waiting to meet management and evaluate the financial results of the year in the closing phase, we confirm our estimates: target price € 25.30, BUY rating, and risk Medium.
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