Síminn hf. – Valuation as of 1 Jan 2025

Key assumptions

• Sales remain almost unchanged in 2025 compared with the previous year but decline in 2026 due to the expiration of the broadcasting rights agreement for the English Premier League in 2025. However, sales grow by an average of 3.3% per year during the forecast period.
• EBITDA averages 25% per year during the forecast period.
• Depreciation of operating assets, right-of-use assets, and intangible assets (excluding goodwill) amounts to 33.7% per year during the forecast period.
• A 400 million ISK administrative fine is included in the 2025 results.
• The average cost of interest-bearing debt is 7.5% per year from 2026 onwards, corresponding to 4.5% real interest, with all financing in ISK.
• Income tax amounts to 20% per year over the forecast period.
• Invested capital in operating assets, right-of-use assets, and intangible assets decreases at the beginning of the forecast period but then follows revenue growth. During the forecast period, investment averages 14.6% of operating revenue per year.
• Loans issued grow by 5.7% per year on average during the forecast period and bear 12.5% interest. The model does not take into account Síminn’s acquisition of Valitor’s loan portfolio.
• Dividend payments amount to 36% of total comprehensive income of the previous year in 2025, and thereafter 90%, assuming an equity ratio of around 45%.
• Terminal growth at the end of the forecast period, is 4.0%, corresponding to 1.0% real growth.
• See other general assumptions under “Valuation.”
• A nominal required return on equity of 10% is assumed when discounting the forecasted results for 2025–2034.

Results

• Based on the above assumptions, the estimated share value is ISK 10.3 as of 1 January 2025.