Mobistar revenues, net profit fall on regulation and customer losses

21 Oct 2013

Belgium’s Mobistar has published its financial results for the nine months ended 30 September 2013, revealing an almost 40% year-on-year drop in net profit on the back of falling revenues. For the period under review Mobistar generated a consolidated turnover of EUR1.104 billion (USD1.45 billion), down 8.0% against the EUR1.200 billion recorded in 3Q 2012, while service revenues fell by 10.9% year-on-year to EUR962.7 million. With regards to the drop in service revenues, Mobistar noted that besides the impact of regulation accounting, erosion in average revenue per user (ARPU) following the re-pricing of its tariff plans also played a part in the decline, along with the fact that the cellco had a lower number of both pre- and post-paid customers on its books. According to the operator, excluding regulatory impact consolidated service revenues would have been EUR1.007 billion, representing a 6.8% drop against the corresponding period of 2012. Mobistar recorded a consolidated EBITDA of EUR270.0 million in 9M13, and while this represented a 26.9% decrease against the EUR369.4 million reported in the previous year, it beat analyst estimates; an operator-published analyst consensus had a median forecast of EUR67.8 million for the period under review. Claiming that the net impact of regulation on its operating results had been –EUR25.9 million, it was noted that the Mobistar group would have realised an EBITDA of EUR295.9 million in 9M13. Consolidated net profit, meanwhile, totalled EUR137.6 million, a 39.2% y-o-y drop, with the company saying that the decrease resulted from ‘a lower EBITDA, only slightly compensated by a decrease in amortizations and depreciations that were influenced in 2012 by the impact of the review of the useful life of the assets related to important projects in IT system and network renewal’.

In operational terms, at the end of September 2013 Mobistar reported a total 3.244 million active mobile telephony subscribers, down from 3.512 million a year earlier, though the number of mobile virtual network operator (MVNO) customers using the Mobistar network stood at 1.142 million, some 63% more than the 700,589 reported at end-September 2012. Mobile internet subscribers totalled 121,070, down from 165,263 (down 26.7% y-o-y), while fixed line broadband accesses also declined, to 60,137 (down 20.7%). Similarly fixed voice lines fell by 10.4% to 211,413. Meanwhile, having switched off all access to its interactive services, including its video-on-demand offerings, on 15 September, between that date and 30 September Mobistar switched off its TV service in several steps. As a result, at the end of September 2013 it reported just 118 pay-TV customers, down from 30,554 at end-September 2012.

Commenting on the financial performance, Ludovic Pech, Mobistar’s chief financial officer, stated: ‘Our top line performance in the first nine months of 2013 is a reflection of the challenging market environment in mobile. At the same time Mobistar keeps focusing on enhancing the efficiency of business operations and reducing the cost base’. Jean-Marc Harion, Mobistar’s CEO, added: ‘Mobistar is in the midst of the execution of its transformation plan, 2013 has until now been a year of investing in our fundamentals, i.e. the relationship with all Mobistar customers and the further optimisation of our network’.

Belgium, Orange Belgium