– We’ve seen price increases in Denmark, for example, says CEO Guillaume Van Gaver at Link Mobility to Finansavisen after providing quarterly numbers on Tuesday.
We ask if the company is noticing cost increases now that Telenor and other carriers have reported increased energy prices and costs, which in turn are driving up their profit margins.
The Link Mobility director confirms that he sees mobile operators raising their rates next. Link purchasing services from mobile carriers to send short messages and messages to consumers on behalf of customers.
For example, Link has opticians and airlines as customers, and they use Link systems to inform customers of offers, appointments, and delays.
However, the link manager has included:
We have agreements again with our customers that price hikes of 100 percent from our suppliers, mobile operators, are sent to our customers. By definition, it gives us immunity and protection in all of our markets, says Van Gaver and continues:
Mobile operators are also facing tougher competition with OTT suppliers, among other things, and have learned that they can’t just increase prices without further ado and without looking at the picture of competition, he continues.
He points to Apple’s What, iMessage, and Business Chat as examples.
Believe in improvement to fall
Link Mobility returned to the Oslo Stock Exchange in October 2020, but for shareholders it wasn’t very pleasant. The stock price fell sharply and the market capitalization at more than $14 billion was pared to 3.6 billion on Tuesday — after a fresh five percent drop.
The stock opened at NOK 55 on the day of listing and traded at NOK 12.4 on Tuesday.
Link was able to report 15 percent (organic) growth in the first quarter, measured against the same period in the prior year, and 25 percent unadjusted growth. Includes acquisitions.
The company maintains a medium-term growth target of 14 to 17 percent annual revenue growth.
Revenue increased from 247 to 322 million, while adjusted operating profit increased from 109 to 142 million. Net profit turned from -50 million to profit of 759,000.
The company has left NOK 18 million in cash flow from operations, but has also spent NOK 50 million on investments. At the end of March, the company had about NOK 800 million on the books.
We believe profitability will increase in the second half of the year due to the size and importance of our US business. It’s traditionally a stronger second half, says Van Gaveer.
In addition, we have a scalable business where revenue increases faster than costs, he adds.
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