Earnings call transcript: Orange Polska Q2 2025 sees revenue growth

Orange Polska (OPL), with a market capitalization of $3.09 billion, reported its financial results for the second quarter of 2025, showing a steady increase in revenue and earnings. The company’s stock saw a modest rise of 1.47%, closing at 7.34 PLN, contributing to an impressive year-to-date return of 25.06%. Key drivers included growth in telecom services and strategic investments in 5G and fiber networks. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation.

Key Takeaways

• Revenues increased by 1.1% year-over-year in Q2 2025.
• EBITDA grew 4.3% year-over-year, indicating strong operational performance.
• 5G network coverage expanded to nearly 50% of the population.
• The company confirmed its full-year guidance, targeting around 2% EBITDA growth in H2 2025.

Company Performance

Orange Polska has demonstrated resilience in a competitive telecom market, with a notable increase in core telecom services revenue of nearly 7%. The company’s strategic focus on expanding its 5G and fiber networks has positioned it well against competitors, maintaining its leadership in the B2B segment and showing strong performance in consumer mobile and fixed services.

Financial Highlights

• Revenue: Increased by 1.1% year-over-year in Q2 2025.
• EBITDA: Grew by 4.3% year-over-year.
• Net Income: Rose by almost 2% in the first half of 2025.
• Organic Cash Flow: PLN 340 million in H1 2025.

Outlook & Guidance

Orange Polska confirmed its full-year guidance, targeting approximately 2% EBITDA growth in the second half of 2025. The company is also preparing transformation initiatives for 2026 and exploring opportunities in the defense and cybersecurity sectors. InvestingPro’s comprehensive analysis awards the company a GOOD Financial Health Score of 2.67, supported by strong profitability metrics and a sustainable dividend yield of 6.09%.

Executive Commentary

Liudmila Climoc, CEO, emphasized the importance of continuous investment in infrastructure, stating, "Our commercial success is underpinned by continuous investment in mobile and fixed infrastructure." CFO Jacek expressed satisfaction with the EBITDA growth, highlighting the company’s operational efficiency.

Risks and Challenges

• Fierce competition in the telecom market could pressure margins.
• The challenging B2B market environment may impact revenue growth.
• Regulatory inquiries and provisions could pose potential financial risks.
• Market saturation in high-broadband segments might limit growth opportunities.
• Economic uncertainties could affect consumer spending and investment plans.

Orange Polska’s strategic initiatives and strong financial performance in Q2 2025 reflect its ability to navigate a competitive landscape while laying the groundwork for future growth.

Full transcript - Orange Polska SA (OPL) Q2 2025:

Leszek Iwaszko, Investor Relations, Orange Polska: Morning. Thank you for standing by and let me welcome you to Orange Polska results conference for the second quarter of 2025. My name is Leszek Iwaszko and I’m in charge of investor relations. The format of the call will be as usual, a presentation made by the management team followed by a Q&A session. Speakers for today will be Liudmila Climoc, the CEO of Orange Polska, and the CFO. I’m passing now the floor to Liudmila to begin the presentation.

Liudmila Climoc, CEO, Orange Polska: Thank you. Leszek. Good morning. Welcome to our conference summarizing second quarter of 2025 and I start with slide four key messages. First of all, I am very pleased to say that performance on our core telecom business maintained its good momentum in the second quarter. Our commercial results are strong and especially on the consumer market where customer bases and our pool continues to grow at a very healthy pace. Our commercial success is underpinned by continuous investment in mobile and fixed infrastructure that we develop for our customers. Fiber, I will address more in a moment on a dedicated slide. On the mobile front, we are progressing with 5G deployment for C band spectrum. We already cover nearly 50% of population in Poland and this month we have launched first base stations on newly acquired 700 MHz spectrum. With this spectrum, we expand coverage beyond big cities.

As a result, our commitment to delivering the best connectivity at home, at work or on the move has been validated by independent test benchmarks where Orange 5G and Orange FTTH fiber networks again were ranked as number one in the first part of 2025. I am very satisfied with our sales deal of Orange Energia. On one hand, it confirms focus on core business which we outlined in our Lead the Future strategy. On the other hand, Orange Energia is taken over by the renowned industrial player who will ensure its further development. Finally, our financial results were very good in second quarter on all levels with growth of revenues, of EBITDA, net profit and cash generation. As usual, let’s zoom on our commercial activity on the next slide.

Talking about commercial performance in Q2, it was very strong across all key telecom services, reflected in a consistent healthy pace of growth of our customer bases in convergence and fiber bases has increased with 5% and 6%, 13% respectively with a sustainable rate of increase which we are reporting quarter by quarter. We achieve it despite fierce competition as some market players tend to win the market with aggressive volume oriented strategies. We are coping well in this environment and continue to gain share in very very high broadband market. We are successfully addressing local geo targeted competitive battles, responding to the need for higher speeds and for TV and for the content in mobile. Net debts customer additions were really outstanding in second quarter. We delivered the highest net debts in last three years with both consumer and business segments contributing to this achievement.

We also benefiting from wide portfolio of brand and personalized AI enabled offering which help us to strengthen customer loyalty. On ARPU side in convergence services and fixed broadband only, our offers maintain strong between 4% and 5% growth rates as well as we are keeping very good balance between volume and value in our commercial strategy. As you can see our postpaid mobile is flowing flat year on year in second quarter. This is a combination of two factors, good growth in B2C in consumer and decline of ARPU in B2B. Let me dig more into the details. In B2B we are dealing with a tougher competitive environment. Orange Polska is the leader with the highest market share in this segment and we are defending against very intensified price competition. On another side in B2C in consumer, ARPU is growing.

In the main Orange brand this growth exceeds 4% benefiting from our regular price adjustments. In the same time consumer base was growing also thanks to the increasing share of our B brands, nju and Flex, which with corresponding contribution of lower levels ARPU. This well reflects our two steps approach which we were describing can lead the future. First to acquire customer to build new relationships and further we grow the value and we upsell to convergence. These results demonstrate that we have right commercial strategies and we are coping well with challenging competitive environment. As commercial growth is essential for our future value creation. Let’s move now on slide six and here talking about infrastructure, our FiberCo joint venture just finished its fourth year of operations and we are very satisfied with its performance. We can describe its development as exemplary one on the European landscape.

Business plan is on track and this year the investment program that was initiated in 2021 will be completed. Within this plan 1.7 million households get access to fiber, mostly outside big cities in the areas with low infrastructure competition. Światłowód Inwestycje is very effective in converting these homes to homes connected. There are already 22 retail operators that provide services on its network and it serves around 700,000 active customers, which implies more than 30% of infrastructure take up rate. A very solid achievement as you can see. Based on this success of first investment program, we decided together with our investment partner that there is more potential for Światłowód Inwestycje. In June, our FiberCo raised $3.7 billion, loaned to refinance the outstanding debt and to secure funds for the second investment plan.

This plan will include rollout to half a million of new households over the next three years and to another 200,000 in the following few years to densify already covered areas. As a result, Światłowód Inwestycje network intends to reach coverage of 3.1 million households in Poland. Our cooperation model with Światłowód Inwestycje will not change under the new plan. Orange Polska will continue building the network and rendering a number of services for Światłowód Inwestycje, and to point out that regarding reconsolidation option for Orange which we had, its timing has been adjusted in line with the new investment horizon and now it covers the period between 2029 and 2032.

This new Światłowód Inwestycje and FiberCo investment plan is a key element for our expansion plans for fiber access network as according to Lead the Future, you remember that we plan to grow from 9.5 million households covered by Orange fiber today to 12 million connectable by the end of 2028. This being said, I want to hand over the floor to Jacek.

Jacek, CFO, Orange Polska: Thank you, Liudmila. Good morning everyone. Let’s start the financial review on slide 8 with the highlights of our performance. I’m pleased with the financial results of the second quarter. We have increased our revenues, profits, and cash generation. Revenues were up 1.1% year over year, fueled by a solid growth of the core telecom services at almost 7%. In turn, this strong performance of the core business drove the EBITDA to a 4.3% year over year growth in the second quarter and to 3.6% for the six months of the year. The net income was almost 2% up in H1. This was mainly due to higher EBITDA coupled with a PLN 70 million estimated gain on the disposal of our energy trading subsidiary. The CapEx amounted to PLN 800 million in the first semester, with almost PLN 300 million invested into the fiber and mobile access networks.

In line with our strategic priorities, its year over year growth was due to lower proceeds from disposal of real estate. We have a back-end loaded schedule of property sales this year and expect a peak of proceeds in the fourth quarter of 2025. The organic cash flow in H1 reflected solid cash from operating activities offset by higher cash CapEx and low cash coming in from the above-mentioned sale of real estate assets. My overall takeaway from this is after the first six months of 2025, we are on track to deliver our full year objectives and create further value for shareholders. Let’s now review the results in more detail. Starting with the top line, our Q2 revenues have increased by 1.1%, including a very solid growth dynamic of the most important revenue streams. The key driver of this, core telecom services, increased by almost 7% year over year.

It was driven by consistent growth of our main customer bases and ARPUs, as discussed by Liudmila. This year, it was additionally boosted by a 14% growth of the prepaid ARPU and a similar uplift of its revenues. This reflects the prepaid price adjustments that we had made in the fourth quarter of last year and in the first quarter of 2025, and these were applied to roughly 60% of the customer base. The IT and IS revenues were stable in the second quarter after they had captured very solid growth in the first quarter of 2025. This is a combination of two factors. First, our IT subsidiaries have increased revenues, which is encouraging given the challenging market environment. This was, however, offset by a decrease of revenues year over year from wholesale SMS service.

Here we need to note that this is measured versus a very high comparable base of 2024 when we benefited from a surge of activity of some retailers in both the second and the third quarter of 2024. Q2 was the last quarter in which we consolidated the results of Orange Energia. Starting from the third quarter, we will compare a year on year dynamic to a pro forma of 2024. We’ll provide the comparative figures in the KPI file that you can always find on the investor relations website. To sum up on the revenues first, we’re happy with the pace of growth of the core telecom services. Second, the outlook for ICT is gradually improving and I am cautiously optimistic in this area.

Even if Q3 will still be affected by the high comparative base of the wholesale SMS service from last year, profitable revenue growth is the main driver of our EBITDA. Let’s now take a look at the latter at the EBITDA on slide 10. The EBITDA for Q2 has increased by a strong 4.3% year over year. The increase was driven by solid growth of the direct margin. This predominantly reflected the consistent growth of margin from the core telecom services mentioned a minute ago. Our direct margin amounted to almost 57% of revenues, so this is well in line with our goal to keep it and drive it above 55%. Indirect costs were slightly lower versus Q2 of last year. They reflected the pay rise, pressure on workforce costs, and higher advertising spend that was needed to support our good commercial progress.

This was offset by additional margin from the fiber rollout project. This was enabled by further operating progress in this key final big year of the first rollout agreement, as well as by signing of the second investment plan with Światłowód Inwestycje. This last point allows a much more gradual decrease of our production capacity instead of having to make a hard stop at the end of 2025. In turn, this makes the entire project more profitable and we have reflected this in our Q2 results. We’re happy to continue this cooperation with Światłowód Inwestycje on rollout no. 1 but also on the newly signed rollout number two well beyond 2025 or 2026.

I also note that the amount of the rollout margin re-evaluations that we have made in H1 was practically the same as in H1 of last year, so it had no material impact on the year to date. EBITDA evolution between the years. To sum up, we are happy with the EBITDA growth in Q2, we’re happy with the sources of this growth and namely the good solid recurrence growth of the direct margin, and we’re confident that with the 3.6% growth in H1 we are on track to deliver the full year objective. Let’s now turn to net income on slide 11. It has exceeded PLN 460 million in H1, so up by 2% year over year. Let me now walk you through its underlying drivers and also through the one-offs. The underlying growth stems from the consistent increase of the EBITDA, up by PLN 60 million in H1.

This is partly offset by higher depreciation as we have a progressively changing asset mix and by higher financial costs, a consequence of last year’s debt refinancing. The net impact of this is slightly positive, confirming the solid fundamentals for us to increase the net income. Obviously, the net income was also affected in H1 by some important one-offs. It decreased year over year due to provisions for significant risks and restructuring and due to lower gain from the sale of real estate that I mentioned a minute ago, which is linked more with the timing of the expected real estate sales between two years. This negative impact of both of these was nearly offset by the estimated gain on the sale of the energy trading subsidiary.

The bottom line for us is that we have solid underlying factors that are driving our net performance, our net income performance upwards, and we focus on these in order to achieve higher net income in the future. Let’s now switch to CapEx, which amounted to PLN 800 million in H1. Considering the typical H1 H2 phasing, this is in line with our full year objectives. It increased by 18.6% year over year, with the difference stemming mostly from lower proceeds from real estate disposal. As we have discussed it already, capital spending was on a comparable base, on a comparable level to last year. In line with our strategic priorities, we allocated almost 40% of CapEx to access network in fixed. This is fiber rollout in the white zones and dedicated connections for the large B2B clients.

In mobile, we are deploying the 5G network and we are completing the renewal of our radio access networks with the bulk of the latter project to be finalized still this year. Another 30% of investments were dedicated to core and fixed networks as we are expanding our capacity in order to serve the growing traffic demand. Finally, we’ve spent just over 30% of capital expenses on IT with a focus on projects to support process efficiency through digitalization, both on the front desk as well as in the technical and field maintenance areas. Over to cash flow on page 13, we have generated just over PLN 340 million of organic cash flow in H1. This was less than a year ago, mainly due to PLN 100 million less cash in from real estate disposals due to the timing difference that I mentioned earlier.

On this apart, cash generation was solid with growing cash from operating activity with a positive year-over-year difference on working capital requirement. Even if this latter one was offset by increased cash CapEx, we are satisfied with cash generation in H1. We expect a solid organic cash flow in H2 and once again we are eyeing to achieve over PLN 900 million of organic cash flow in the full year. Moreover, we have maintained a very sound balance sheet and we have already secured the refinancing of the debt that was due to mature in 2026. This concludes the financial review and now I hand the floor back to Liudmila for the conclusions.

Liudmila Climoc, CEO, Orange Polska: Thank you Jacek. Summarizing our presentation, I would like to emphasize electronic commercial and financial performance in the second quarter and overall in the first part of the year, which is allowing us to confirm our full year guidance. Going forward, our priorities do not change. Firstly, we intend to maintain good commercial momentum. We are preparing attractive offers for customers in the upcoming two peak commercial seasons, for back to school and for Christmas. We are also focused on a progressive turnaround of our B2B in IT and S. We see a better projects pipeline for the second half of the year. The turnaround is more difficult in telecom services due to a challenging market environment. As a second priority, we are starting to work on our plans for 2026, including preparation of transformation initiatives which will support our cost efficiency in the years to come.

A combination of commercial success and improving efficiency is the right recipe for growth of shareholder value in our new strategy. This is all from us and now we are ready to take your questions.

Leszek Iwaszko, Investor Relations, Orange Polska: Yes, if you are dialed in via the phone and would like to ask a question, please press 2 on your keypad and wait for your name to be called. You may also ask a question, a voice or text question, using the webcast window. Once again, to ask a question, press Start on the keypad or press the question button on the platform. We have the first question coming from the line of Marcin Novak from IPOPEMA. Marcin, your line is open.

Morning. Thank you for the presentation. Few questions from my side. Could you please comment in more detail about the reasons behind creation of this $23 million provisions below EBITDA on significant risks and reorganization costs, and why this wasn’t included in EBITDA exactly? The second question regarding the recent anti-modern PolymorphDoc proceedings with the case regarding presentation of pricing in mobile contracts, including discount, what is your estimated potential maximal fee on this case? It was related to the provision that we made. The last question regarding the comment about being ready to benefit from the spending on military and defense purposes, I guess it was in the press segment or a month ago. What products exactly or services do you plan to offer within that area? Thank you.

Jacek, CFO, Orange Polska: Thank you for your question. First, welcome. I will take the first two questions and maybe I will give you the floor for the third one. The provision that you mentioned is linked with provisions for risks, claims, and litigations. We place large provisions of this sort below the EBITDA because they do not stem from the standard business that we do on a recurrent quarter by quarter basis. This is to distinguish this, obviously for commercial sensitivity reasons and in order not to prejudice any outcomes of any risk provisions. I am not at liberty to comment which case this particular provision regards or potential risks that you may imagine.

Likewise, I am not inclined to comment or discuss the Consumer Protection Office inquiry into the presentation of the discounts that you had mentioned, other than to say that as with all of the questions that we get from them, we are always working closely and proactively with the Office to make sure that we are able to address any concerns that they might have in an amicable way. I am not at liberty to get into the details of these proceedings and our discussions with the regulatory office. Your third question, I guess, on the merit defense. Yeah, yeah.

Liudmila Climoc, CEO, Orange Polska: What we see there is clearly growing potential with spendings growing dedicated to defense and cyber security, which we believe. We see it as a great opportunity for us because we are well positioned as a solid and reliable partner for both public sector and private entities which require specific expertise, specific knowledge, and we are fully, fully equipped with this knowledge. I will not go into the particular bids or, you know, like, because we will not comment as ahead. Just to let you know that we see Terravor, you know, in a very transversal and, I would say, convergent way because we do combine unique competences on the market of telco infrastructure, telco solutions, and ICT solutions. For instance, we have a strategic cooperation with the Minister of Defense. We are delivering critical infrastructure and ICT services for, you know, for the purposes of national security.

We are the largest provider of mobile telephony services for military, and we are enhancing our network to bring it to the coverage in the areas which are critical and of strategic importance of defense. I can give you another example which we were implementing in the past. It was specialized IT solution for military hospitals to support the quality of healthcare. We see it holistic as connectivity infrastructure solutions which are accompanying the ICT domain and cybersecurity security need as a whole.

Thank you.

Leszek Iwaszko, Investor Relations, Orange Polska: Thank you. Next question coming from the line of Dominique Nisz from Trigon Dom Maklerski. Dominique, your line is open.

Thank you. Good morning. Two questions from me, one regarding the FiberCo agreement and the second on bulk SMS service. Maybe starting with FiberCo, we see that your previous agreement had over 300,000 homes passed per year and now we see around 100,000 per year. The question is, do you expect that cost per home passed may be visibly higher in the new agreements, like twice as high on average? Also, what I’m trying to understand asking this is what’s the overall impact on your P&L because you calculated this extra margin in the second quarter. Just wondering how will it look like compared to the previous agreements on average?

Jacek, CFO, Orange Polska: Thank you. Dominique, regarding your question about the second rollout agreement, the second rollout agreement is for 0.5 million households passed. The two items that I would mention: it is a front-end loaded agreement. I would expect us to be aiming to deliver something close to 300,000 in the first year in 2026, and then it would slow down progressively in 2027 and in 2028. It’s tough to say what exactly will be the profitability because we were surprised a number of times in the profitability of the first one. Right now, I would assume that we should have a relatively comparable gain per one line as we have had so far. That would not be that much of a difference.

Without getting into too much of the commercial aspects of this agreement, you can basically assume that we’re eyeing quite a high number, something like up to 300,000 in 2026, and then you’re getting down to your 120s and below 100,000 in the next two years. I hope that will help a little bit for you to be able to model this.

Yes, of course. Thank you. That’s clear. The second is on your bulk SMS service for business customers. You mentioned it twice in the presentation that you had this high base related to marketing campaigns of some of your clients. This was significant profit margin booked there. My question is how much of SMS revenue you still generate, like in the first half of the year 2025, does it still a visible amount? We saw last week a guidance by Belgian Telecom Proximus in their global CPAs business that this SMS revenue is really falling and they cut their guidance visibly because SMS is moving, is replaced by RCS, WhatsApp, and other channels. I guess this also affects your business. What’s your current state in 2025? How much do you make on this?

I think the best way to answer your question is to start off with why we were mentioning this item at all. It’s not to do with the level of the wholesale SMS that we are doing, but it’s rather linked with the fact that in the second and third quarter of last year we had a surge of these SMSes linked with some specific clients and campaigns by some clients. That had boosted our margins, I would say by something like 15 million PLN per quarter in Q2 and in Q3. That is now represented as a high comparable base in Q2 numbers that you see.

We will continue to see it in Q3 and then the base of comparison becomes much more normalized when we will start comparing ourselves in the last quarter of the year, because quarter four of last year was already past the peak of this particular product surge. When we look on the revenues, right now we are making about 40 million PLN per semester for bulk SMS. This is not SMS overall and as you know SMS overall would be a little bit less relevant question because most of them are within the package that we offer, which is unlimited. Unlimited and it’s equally unlimited as the data is. It doesn’t matter so much if the end user is using more of WhatsApp or more of SMS. It’s the wholesale SMS that I was referring to. Obviously we make a little bit more from the entire SMS of mobile.

Yeah, it’s like PLN 20 million per quarter. Yeah, that’s clear. Great, thank you.

Thanks.

Leszek Iwaszko, Investor Relations, Orange Polska: Thanks, Dominique. Next question coming from the line of David Gosinski from Biuro Maklerskie PKO Banku Polskiego. David, your line is open.

Hi, thank you for taking my questions. I have three actually. First one on EBITDA, like some outlook on the second half of the year in terms of EBITDA after release performance because of large number of one-offs that were reported in second half last year. I mean both like related to FiberCo and in some cost positions, namely like wages and in interconnect. I just wonder if you think that like keeping positive EBITDA after risk dynamics will be possible or it would be rather challenging for you is the first question. Maybe take one by one if you can.

Jacek, CFO, Orange Polska: Okay, thank you for your question. Yes, last year included several non-recurring items that affected the EBITDA. I don’t think you would find a semester without one-offs and the H1 being not exempt. I would mention two things. First of all, when we are looking at the H1 results of this year, even if you were to take out the fiber rollout catch-up margin from both years, H1 of this year and H1 of last year, you would get to a very comparable evolution as we are reporting because the catch-up was practically the same for both years. It does give a relatively good picture on the underlying performance. Looking at H2, I would still assume that we are eyeing for growth.

I would say that for H2, depending on the success of the business, depending on the success of the ICT which is always less repeatable and subject to any surprises that we might have, I would assume that something around 2% EBITDA growth for the standalone H2 is something that we could be considering and I guess this is relatively close to what the consensus is assuming at the moment.

Okay, thank you. Thank you so much. Second question on the new offer from T-Mobile recently. I mean quite aggressive or unified mobile offering, just one package and aggressive promotions for FTTH. Do you see some, you know, like how do you see the impact of this new offering on the market in the midterm, let’s say? Do you see any signs how successful they are in acquiring clients? Or maybe you observe some slowdown in your acquisitions in third quarter. Thank you.

Liudmila Climoc, CEO, Orange Polska: Thank you for the question. I will take it. First, to mention, we are pretty confident in what we are going to do and in our current performance. I will not comment on particular strategies of our competitors. We are looking with interest also at how the market will react on it. Not exactly probably what you would like for me to get, but this is what we can comment for a moment.

Okay, I understand you see like no clear signs or differences in quiet acquisition in your KPIs as well.

Market is very competitive in Poland, and we see it in T-Mobile offers and all players’ offers which are coming. Let’s see how market and how customers will be reacting on it.

Okay, thank you. Third question is on like, if I understood correctly you delayed the decision about FiberCo re-consolidation to like until 2029 at earliest. I wonder if that like makes you like that impacts your dividend policy in this short term. Yeah, because the balance sheet looks safe.

Jacek, CFO, Orange Polska: On this particular point, what I would mention is we delayed that decision. We delayed the decision, the option a little bit. Previously, the optional windows were between 2027 and 2029. Now they are between 2029 and 2032. The basic thinking is here that we’d like to see the network and the asset in its final stage before we are taking a decision whether we want to reconsolidate or not. Regarding the dividend, you will appreciate that we will be more talkative about this in February, but we are not linking the dividend decision to a particular constraint on the balance sheet side. As you well know, the current level of indebtedness is very low and it does not pose a real hurdle itself as in net debt to EBITDA. Even if I were to adjust it by the FiberCo impact, it’s not the only item that we’re looking at.

What is predominantly our area of analysis is how do we view our financial performance going forward, how do we view our cash flows going forward on a sustainable basis so that they are able to finance over a long time the dividend that we are going to propose. In this context, the change of the potential timing for the fiber reconsolidation is not a big factor here because anyway we need to keep the flexibility of the balance sheet to be able to reconsolidate. Anyway, we know that this flexibility is here with us and unless something changes in the balance sheet substantially, it is not the balance sheet that is the limiting factor for the dividend. Obviously, we are working all the time to make sure that we do create more EBITDA, more cash flows, and more possibilities to serve the dividend to shareholders.

That is from the outset the plan of the lead, the future strategy.

Okay, great. Thank you for this call.

Thank you.

Leszek Iwaszko, Investor Relations, Orange Polska: Thank you. We have some questions that came to us online. I will read a question from Pawel Pokholski from Santander. May I ask for updated guidance for coming quarters concerning other operating profits or FiberCo catch ups? Also, what would change there under new three year agreement? I think we partly already answered that, and maybe I will read next question from Pawel as well. The PLN 43 million write-off booked in Q2 2025 should be reworded. Please give us more color. I think this has been answered, so no reason to repeat it. Another question, I noticed PLN 6.6 billion maximum pledge on Światłowód Inwestycje, higher by PLN 0.8 billion. Where does this amount come from and does it relate to project valuation or maximum loan capacity?

Jacek, CFO, Orange Polska: Thank you. On the numerous questions, I will start one by one and I will start with coming quarters. When you take a look at our other operating income, you see that it contains a variety of items. It’s not only the FiberCo, and also the FiberCo doesn’t only have a catch-up mechanism, but it has a recurring price. I guess if we take the Q2 number, which is at 156, we know that there was a $75 million catch-up within this. We also are aware that, for example, this particular quarter the sale of copper was not particularly great. I wouldn’t be surprised. The line can be volatile and the nature of other operating profit. I wouldn’t be surprised to see this area being in the range of, let’s say, $100 million quarter after quarter, subject to any surprises that we might have.

We will be finalizing the rollout, number one. There is always a possibility that we will need to readjust the profit upwards or downwards when we close it. I don’t think this would be anything remotely as material as the adjustment that we have done right now because the adjustment that we have done right now had a clear and very big trigger, which was signing of this second agreement. It just, you know, A, we have more operating data for the route number one and B, we are not faced anymore with a prospect of having to make a hard stop at the end of the year because the agreement ends. We will be able to progressively adjust our production capacity to the production volumes that we see. As you remember from the previous questions, it is a progressive decrease of the expected production year after year.

Not yet any decrease of production in 2026. Between 2027 and 2028 are definitely going to be with a lower production. This progressive pace and dynamics of the program allows us to manage the winding down of the machinery, the system, the processes, the ecosystem that is there to deliver this in a much more controlled and in a much less costly way. This was the clear trigger for the H1 positive reassessment of this project. Profitability, the new agreement, I think we’ve discussed it a little bit. We would assume 300,000 households in year one and then you may assume something close to the numbers that I was mentioning before, so like 127,000 and close to 80,000 in 2028. You may assume that any profitability profile that we get would be broadly in line with this. We need to wait and to see how we adjust.

That is, I think, the question on the other operating income and the new three year agreement. The write off I think we have answered. I mean on the pledge, it’s a standard mechanism that you assign when taking out the loans. It’s linked with the refinancing that Światłowód Inwestycje has conducted during the course of H1. This refinancing obviously contains these standard mechanisms. What is important is that this refinancing allows Światłowód Inwestycje to have a fully funded business plan for the upcoming rollout.

Leszek Iwaszko, Investor Relations, Orange Polska: Okay, we have a question from Maciej Bobrowski from BDM, but this is a question about us providing more information on defense spending tenders in which we like to bid. This has already been covered in the previous question. Another question came from Jakub Viscardi from Bosch. I will read the question. Do you anticipate moving the additional network rollout margin for FiberCo below EBITDA at some point in the future once the potential for demonstrating new margin contribution is exhausted and the accumulated base starts to weigh on EBITDA growth potential? This would be similar to how gains on real estate were previously treated.

Jacek, CFO, Orange Polska: Thank you very much, Jakob, for your question. No, I do not assume that we will move the rollout margin below the EBITDA. It is part of our activity. It is with us, and we are doing this rollout from 2021. It is with us for five years now. It is going to be with us for another three years at least. It is part of the, it has grown to be a big, big project and a part of our business processes. I do not assume we will move this anyway, anyway, below the EBITDA.

Leszek Iwaszko, Investor Relations, Orange Polska: Thank you. That exhausts our Q and A session. Thank you very much for the participation and enjoy the rest of the summer and talk to you in October. Thank you.

Jacek, CFO, Orange Polska: Thank you very much.

Liudmila Climoc, CEO, Orange Polska: Thank you. Bye bye.

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