OTE’s 4Q revenues up 13.6%, net income up 62%; sees full-year net turnaround

22 Mar 2007

Greek telecoms group OTE’s revenues increased by 13.6% to EUR1.589 billion (USD2.116 billion) in the three months ended 31 December 2006, compared to the corresponding period of 2005, whilst it posted net income of EUR129.1 million, up 62% from EUR79.7 million in Q4 2005. The increase in turnover reflected the consolidation, on 2 October 2006, of the Germanos retail chain by OTE’s mobile unit Cosmote, which more than offset the de-consolidation of Armenian telco ArmenTel, effective 16 November 2006. Excluding these two factors, group revenues rose by 1.3%, reflecting higher turnover from mobile telephony, ADSL services and monthly rentals, offsetting falling revenues from local, long-distance and international telephony. Fourth quarter net income included a realised capital gain on the sale of OTE’s interest in ArmenTel (EUR160.2 million pre-tax) as well as a one-off net financial loss of EUR70 million related to a loan that OTE granted to the OTE Auxiliary Pension Fund. Operating income before depreciation and amortisation (OIBDA) totaled EUR508.6 million in Q4 2006, compared to EUR452.7 million in Q4 2005, when the group incurred an additional charge of EUR1.6 million for its domestic voluntary retirement programme. The OIBDA margin for the quarter stood at 32%, marginally lower than in the year-ago period.

For the full year 2006, OTE reported a net profit of EUR574.6 million, compared to a net loss of EUR216.8 million in 2005, on revenues that rose from EUR5.475 billion to EUR5.891 billion. Cosmote reported its fourth quarter and full-year results last month.

At the end of December 2006 OTE’s Greek fixed line division had around 4.8 million PSTN lines in service, down by 2.1% from a year ago. In the same period, 64kbps ISDN lines rose by 2.6% to a total of nearly 1.4 million. Total fixed lines fell by 1.1% in the year to 6,160,369. The telco had approximately 488,000 domestic ADSL lines in service at year-end, with an unchanged split of roughly two-thirds retail and one-third wholesale, up from a total of 373,000 at the end of September 2006.

In the fourth quarter of 2006, OTE’s Romanian subsidiary RomTelecom’s revenues were EU229.8 million, down 2.6% from EUR235.8 million in the corresponding period of 2005, reflecting a drop in the number of subscriber lines and lower retail traffic, partly due to intense competition from cable operators. Romanian fixed lines numbered 3,403,346 at the end of 2006, down 14% from 3,957,870 a year earlier. RomTelecom’s ADSL customer base increased by more than 80,000 in the year to 89,000.