Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rai Way SpA (FRA:4RW, Financial) reported a 1.7% increase in core revenue, reaching €70 million, driven by growth in tower hosting volumes.
- The company successfully maintained an inertial CPI plus growth profile, with additional growth from diversification efforts.
- Free cash flow generation was strong, reaching €22 million, due to low CapEx and maintenance activities.
- Rai Way SpA (FRA:4RW) is in advanced negotiations with major content providers to distribute video traffic across Italy, indicating potential future revenue streams.
- The relocation of headquarters to new offices in Rome is expected to enhance corporate identity and employee productivity.
Negative Points
- Adjusted EBITDA remained flat at €46.9 million, impacted by higher energy tariffs and costs related to diversification initiatives.
- Net income decreased by 5.3% quarter on quarter, aligning with the industrial plan but indicating pressure on profitability.
- Operating expenses increased by 4.4%, driven by higher personnel costs and energy tariffs, despite efforts to control costs.
- The company faces challenges in accelerating decision-making processes for smaller customers in the data center segment.
- Energy prices remain volatile, posing a risk to cost management and financial performance.
Q & A Highlights
Q: Can you provide an update on the commercialization of edge data centers and any relevant updates on the multi-year revenue backlog?
A: (Unidentified_6) Our commercial activity is growing, with no major changes in direction. We are exploring solutions to accelerate decision-making for smaller customers, such as introducing services beyond co-location. The commercialization process is ongoing.
Q: Regarding consolidation, EI Towers extended the perimeter to include active equipment ownership. Is this a precondition for a potential merger, and are there any remaining differences to be harmonized, such as contract duration?
A: (Unidentified_3) The model is evolving towards ours, making the business scope more comparable. However, differences remain, such as managing all radio network management, including site and active equipment. We are not in a position to answer about harmonizing contract durations as analyses are ongoing, focusing on industrial aspects and synergies.
Q: Can you elaborate on the particular data center and if all authorizations have been received?
A: (Unidentified_3) We received a positive completion of the "conferenceaiservii," a milestone in the authorization process. However, due to pervasive bureaucracy in Italy, we await further steps before starting construction.
Q: What are the revenue targets for edge data centers?
A: (Unidentified_4) In 2024, we generated hundreds of thousands of euros. For 2025, we expect to exceed €11 million. The focus is on closing contracts with a positive impact on future years, ensuring top-line growth consistent with our industrial plan.
Q: Higher energy tariffs impacted costs by €1.1 million in Q1. Can you explain how operating costs remained flat year-over-year?
A: (Unidentified_4) The impact of higher energy costs and diversification initiatives was offset by one-off prior year adjustments and cost-cutting measures, resulting in a neutral overall impact on operating costs.
Q: Do you confirm your assumption on energy prices for 2025, previously stated as €125 per megawatt-hour?
A: (Unidentified_4) Broadly speaking, we are more or less in line with the amount mentioned.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
