Inwit Earnings: Steady and Stable Progress; Double-Digit Growth and Room for More Distributions

Inwit reported another steady quarter with 12.8% organic revenue growth and 16.7% growth in EBITDAaL. In the last 12 months, Inwit has deployed 670 new towers for its two main anchor tenants Telecom Italia and Vodafone and also deployed new equipment in existing towers for densification that is required for 5G networks. This has resulted in 7% growth in points of presence year over year, which is flowing to the EBITDAaL profit line. New services revenue for indoor cells, which are used to boost wireless signals in indoor spaces, saw a big spike in growth, up 30% from last quarter. Management indicated that this division enjoys EBITDAaL margins above the group level. We maintain our EUR 12.60 fair value estimate and see 9% upside for the shares at this point. Although 9% upside might not seem too high, Inwit's share price has rarely offered big discounts to investors compared with our fair value estimate, given its high tenancy ratios (2.2 times at the end of this quarter), double-digit growth, and high EBITDAaL margins. Inwit offers a very good hedge against inflation, which remained high at 6.7% in Italy during June, according to European Union databases.