OTE’s revenue falls 5% in 3Q14

11 Nov 2014

Greek-based Hellenic Telecommunications Organisation (OTE) recorded a 5% decline in consolidated revenue in 3Q14 to EUR987.6 million (USD1.230 billion) from EUR1.039 billion year-on-year (y-o-y), due in part to competition in its domestic mobile market from Vodafone Greece and Wind Hellas, as well as lower revenues from the company’s Romanian unit and continued austerity in the Greek economy. Net profit fell 72.6% from EUR252.6 million in 3Q13 to EUR69.1 million, largely as the EUR717 million sale of Bulgarian unit Globul at end-July 2013 added substantially to the profit of 3Q13. Greek fixed line operations saw a drop in revenue of 3% from the previous year to EUR376.4 million, while fixed line revenue in OTE’s Romanian unit declined by 0.9% to EUR151.3 million; comparably, mobile revenues saw a larger decline with Greek mobile operations falling 7% to EUR329.4 million y-o-y, whilst Romanian and Albanian mobile operations recorded declines of 7.8% (to EUR107.0 million) and 14.5% (to EUR21.3 million) respectively. However, EBITDA was flat, declining just 0.4% to EUR367.4 million and the company reported adjusted net income as EUR94.2 million, up 24.3% y-o-y from EUR75.8 million.

CEO Michael Tsamaz said: ’Our revenue performance this quarter reflects the continuing stabilization of our Greek operations, with fixed line operations delivering solid results in broadband and television services, and resilient service revenues in mobile. This partially offset lower revenues in our international mobile operations, impacted by MTR [mobile termination rate] cuts and intense competition.’ He commented that OTE had ‘further improved … financial structure [to be] one of the strongest in [its] peer group,’ adding: ‘In conditions that remain persistently challenging, we are confident we will meet our EUR500 million free cash flow year-end target and continue to deliver strong profitability and cash flow in the last quarter of 2014 and next year.’

Greece, Cosmote