August 16 (SeeNews) - Digi Communications [BSE: DIGI], majority owner of Romanian company RCS&RDS, said that its net profit shrank by 51% year-on-year in the first half of 2018 to 15.3 million euro ($17.3 million), mainly due to higher finance costs.
Net finance costs almost doubled on the year in the first half, reaching 31 .2 million euro, Digi said in a statement filed with the Bucharest Stock Exchange, BVB, on Wednesday.
Total revenues increased 5% on the year to 475.8 million euro in the six months through June.
Romanian operations had the biggest share in Digi's total revenue, growing by 1.4% in the review period to 333.4 million euro, primarily driven by an increase in mobile telecommunication services and fixed internet, and cable TV.
Revenues in Hungary decreased by an annual 1.2% to 73.9 million euro, while revenues from operations in Spain surged by 35% to 57.1 million euro.
Total operating expenses increased 4% on the year in the first half, reaching 416.5 million euro.
"The results achieved in this first semester of the year are the effect of continuous investment in infrastructure and in the quality and diversity of services offered to customers. We have retained an investment level of over 200 million over the past years and we are reaping the benefits of this investment policy. In total, from 2010 to 2017, the Digi Group invested about 2 billion euro, and in the first six months of the current year we already have approximately 138.3 million euro of CAPEX consolidated at group level," Digi Communications Group CEO Serghei Bulgac said.
In February, Digi secured a 163 million euro syndicated loan to refinance a short-term loan contracted in October.
RCS&RDS, founded by Romanian businessman Zoltan Teszari, comprises two companies - Romanian Cable Systems (RCS) founded in 1994, and Romanian Data Systems (RDS) founded in 1998. Its parent company, Cable Communication Systems, now Digi Communications N.V., indirectly operates telecommunications groups in Hungary, Spain and Italy through RCS&RDS.
Shares of Digi Communications started trading on BVB in May 2017, following the successful closing of the largest IPO of a private company concluded on the Romanian capital market. The value of the offering topped 944 million lei ($230 million/203 million euro).
Digi is part of BVB's blue-chip BET and BET-TR indices.
Shares of Digi traded 3.17% lower at 27.5 lei on the BVB as at 1300 CET on Thursday.
($=0.8796 euro)