Promising 2002 results for Portugal Telecom

7 Mar 2003

Incumbent operator Portugal Telecom (PT) has posted an increase of 27.2% in net profit for 2002 to EUR391 million, reaching the upper end of analysts’ forecasts, which were between EUR321 million and EUR412 million. The high profit for the year more than compensates for the 2.5% slump in revenues to EUR5.58 billion, a downturn which the telco has attributed mainly to the depreciation of the Brazilian currency which has hit earnings at its Brazilian mobile unit TCP; the cellco saw sales fall by 13% to EUR1.22 billion in the year. PT’s EBITDA rose 5% to EUR2.23 billion in the twelve month period, while net debt fell from EUR5.46 billion to EUR4.04 billion.

The telco said that its mobile operations – particularly domestic carrier TMN – have been the main reason for its strong performance in 2002; TMN added 521,000 new customers in Portugal during the year, to reach a domestic customer base of 4.4 million. Following the release of its results, PT proposed a 60% increase in its dividend pay-out, pleasing investors. It says it plans to stick to its programme of improving margins, reducing debt and cutting costs over the next few years, but claims its future performance depends largely on Portugal’s economic and regulatory environment.