TP reports 3Q loss after making provision for lost court case

27 Oct 2010

Telekomunikacja Polska (TP) has announced a third-quarter net loss after booking a PLN1.06 billion (USD387 million) provision for a lost arbitration case over fees with a Danish business partner. Despite the loss, chief executive Maciej Witucki expects the company to report a full-year net profit. Net loss for the three months ended 30 September 2010 was PLN720 million (USD257.1 million) compared with a net profit of PLN302.6 million in the same period a year earlier. Last month TP was ordered to pay DKK2.9 billion (USD495 million) to its business partner DPTG to settle a long-running dispute over traffic volumes carried via a fibre-optic network that was installed in Poland in the early 1990s. DPTG is a unit of Danish headset and hearing-aid maker GN Store Nord. TP said it raised its provisions for the DPTG case by PLN1.06 billion in the third quarter, raising total provisions for the dispute to PLN1.9 billion. The company also owes PLN257 million to DPTG in further liabilities. TP emphasised that it continues to disagree with the ruling, will take further legal steps to challenge it, and has not yet paid the award to DPTG.

Third-quarter revenue fell by 3.9% to PLN3.9 billion, with the company’s full-year sales expected to decline by around 6%. Mobile division Orange Poland returned to revenue growth in Q3, reporting a 1.7% increase year-on-year on the back of a 2.9% increase in subscribers to 14.14 million, including a 4.9% rise in post-paid customers to 6.82 million. Retail monthly ARPU was PLN33.8 in Q3, down from PLN35.4 in the same period of 2009, while usage rose by 16% over the same timeframe. In its traditional landline business, TP saw revenues fall by 7.5%, a smaller decline than in the previous quarter (-8.7%), primarily as a result of the loss of 197,000 access lines during the three-month period. Retail broadband accesses climbed by 8,000 to 2.27 million, while IPTV users rose from 372,000 at the start of the year to 497,000 at the end of September.

Poland, Orange Poland