Wind Hellas’ losses mount, revenues fall; looks at capital restructuring

28 Aug 2009

Greek full-service telecoms provider Wind Hellas has reported that its total revenues in the six months ended 30 June 2009 fell by 10.8% year-on-year to EUR545.1 million (USD777.5 million), whilst half-year losses widened to EUR114.2 million, from EUR74.2 million in January-June 2008. Sales were driven downwards by a fall in mobile-to-mobile interconnection revenues, which decreased by 32.6% year-on-year in the second quarter as a result of the decline in interconnection rates that occurred in the previous quarter, as well as a drop in incoming traffic. Wind’s total mobile customer base was 5.18 million at the end of June 2009, a 7.0% increase over the 4.84 million users it counted at mid-2008, giving it an estimated 22% market share, whilst its ‘Q-Card’ pre-paid-only brand accounted for 1.64 million of the total, a 33.9% yearly increase. Fixed line and internet customers at Wind’s fixed network division Tellas numbered 906,000 at the end of 2Q 2009, a 0.2% annual increase. Blended mobile ARPU in 2Q09 fell to EUR14.8, down from EUR19.6 a year ago, whilst quarterly contract churn increased to 30.2% from 21.6% in 2Q08 due to post-to-pre-paid migration caused by the negative economic conditions, Wind reported. Its full-year 2009 total revenues are expected to fall by between 13%-15% compared to 2008, but are expected to increase by an aggregate of 11.3% over the period 2009 to 2013, according to the company’s statement.

In a separate announcement, Wind Hellas’ holding company Hellas Telecommunications II, said it was urgently looking at restructuring its capital as it is running out of cash, and was discussing options with Egyptian-owned, Italy-based group parent Weather Investments, also the parent of Orascom Telecom. The Greek company’s debts stood at EUR3.2 billion at end-July 2009, or more than eight times its EBITDA over the last twelve months, a ratio that is expected to rise. Morgan Stanley has been chosen to support capital restructuring procedures while Ernst & Young is acting as consultant for the implementation of the potential resulting strategies. Solutions under consideration include issuing new bonds, re-acquiring bonds already in circulation, getting a new strategic investor on-board or a combination of any of the above.