Telekom Austria Q2 Results Look Broadly In Line, Unlikely A Spread Mover

Rating A3/A-/A-[P]

• Not a credit we have spent a lot of time looking at given they only have one 2026 line outstanding which typically trades in a tight range against peers but results look fairly in line with consensus and unlikely to be a spread mover given the high underlying credit quality.
• TKAAV faces some pressure in H2 to meet FY revenue guidance after achieving +1% in H1 (company-provided consensus for FY growth is +2.4% against the +3-4% guidance). FY capex guidance of EUR 800mn comes against EUR 480mn in H1 with consensus seeing EUR 820mn for the year.
• Q2 revenues +1.3% YoY (vs. consensus of +1.9%) - boosted by service revenues +3.9% on value-protecting measures and strong fixed-line performance in CEE. Weighed upon by Belarus (-7.8% on FX move) and equipment revenues which declined by 20% mainly due to large ICT deals in Q223.
• Q2 EBITDA Before Restructuring +3.9% (vs. consensus +3.4%) or +8.3% excluding one-offs, FX, restructuring. Reported straight EBITDA growth mostly came from the international segment as usual with Austria +1.1% and the international segment +2.9% (or +13.8% excl. FX effects).
• Subscriber numbers look healthy - mobile subscribers + 6% to 25.9M, driven by M2M customers; fixed-line RGUs +0.5%, internet@home base grew 2.2% to 3.85M.
• Credit metrics broadly stable; Q2 CapEx of EUR 247mn was -31.2% (vs. consensus of EUR 212mn) with the decrease largely driven by last year’s spend on Croation spectrum which supported an increase in Q2 FCF (no consensus) to EUR 123mn from EUR 30mn in Q223. EBITDA leverage flat to FY23 at 1.3x; EBITDAal leverage -0.1x to 0.3x.
• FY guidance left unchanged. EUR 26s looks 1bp wider in early streaming.