Telekom Austria ups net profit despite falling sales

12 May 2010

Telekom Austria has reported a 6.9% rise in first-quarter net profit as strict cost control and lower amortisation, depreciation and interest payments more than offset lower sales. Before interest, tax, depreciation and amortisation, Telekom Austria’s earnings fell 6.4% in the quarter, comfortably overshooting expectations. Telekom Austria’s first-quarter net profit rose to EUR91.2 million (USD115.9 million), from EUR85.3 million a year earlier, while sales fell 5.9% to EUR1.13 billion from EUR1.2 billion. EBITDA fell to EUR425.9 million, from EUR454.8 million a year earlier. Telekom Austria said the drop in sales could be ascribed mainly to lower prices, regulation of roaming and mobile termination rates and a decline in fixed line customers, but that it was compensated to a large extent by mobile customer growth and cost reductions evenly distributed across the group.

Telekom Austria’s mobile division, which covers mobile operations in six Eastern European markets in addition to its home market, saw sales decline 7.1%, to EUR734.2 million, as the growth in subscribers failed to offset tougher regulation and currency losses in Eastern Europe, the company said.

Austria, A1 Telekom Austria Group