Difficult first quarter prompts Belgacom to rethink 2011 guidance

6 May 2011

Belgian fixed line incumbent Belgacom has released its financial results for the three months ended 31 March 2011, on the back of which it has lowered its full year outlook for revenues and core profit. With the telco’s first quarter of 2011 hampered by ‘highly competitive pressure’, continued fixed line erosion and a fall in mobile subscriber numbers, Belgacom revealed that it was reducing its guidance for full year revenues, noting that it now expects turnover in 2011 to fall by between 1% and 2%, while it expects core profit to be between 4% and 5% less than it was in 2010. Under the company’s initial forecast it had said that it expected FY2011 revenues to fall by 1% and core profit to drop by up to 2%.

In the first quarter of 2011 Belgacom saw revenues fall by 3.5% year-on-year, to EUR1.583 billion (USD2.21 billion), which it said included the negative impact from regulatory measures which accounted for a decline of EUR52 million in total turnover. Earnings before interest, tax, depreciation and amortisation (EBTIDA) before non-recurring items meanwhile stood at EUR480 million in 1Q 2011, down 3% y-o-y from the EUR495 million reported in the same period a year earlier. Net income for the first three months of the year was EUR194 million, representing an almost 70% slump, although Belgacom pointed out that in 1Q 2010 it benefited from a EUR436 million gain as a result of the full consolidation of international carrier services arm BICS; excluding the gain Belgacom said that group net income for 1Q 2010 was EUR202 million.

Belgium, Proximus