PT Portugal 2014 revenues increase 3.4% to EUR2.72bn; telco posts net loss of EUR2.58bn

31 Mar 2015

Portuguese incumbent PT Portugal Telecom SGPS (PT Portugal) has reported revenues of EUR2.718 billion (USD2.949 billion) for the twelve-month period ended 31 December 2014, up 3.4% from EUR2.628 billion in 2013. Of the top-line figure, the lion’s share of sales – EUR2.455 billion – were contributed by the company’s domestic business, albeit down 4.1% year-on-year. EBITDA for 2014 increased 2.7% to EUR1.053 billion on an annualised basis, while PT Portugal posted a consolidated net loss of EUR2.580 billion in the year under review, compared to a net loss of EUR132.9 million in the corresponding period one year earlier.

While PT Portugal clarifies that ‘net other losses’ amounted to EUR1.495 billion in 2014, compared to ‘net other gains’ of EUR81 million in 2013, the telco has been adversely impacted by a number of impairments relating to its ill-fated tie-up with Oi SA of Brazil, and its subsequently agreed sale to Altice Group. The impairment losses are as follows:

• EUR867 million to adjust the ‘carrying value’ of the Portuguese telecoms businesses compared to Altice’s offer (i.e. The sum that reflects the difference between the enterprise value of Altice’s offer, minus the deferred payment related to future revenues, post-retirement benefits obligations and other financial liabilities);

• EUR517 million to adjust the carrying value of the investment in debt securities of [debt-wracked shareholder] Rio Forte for the corresponding market value of Oi’s shares, to be received under the exchange agreement entered into with holding company PT Portugal SGPS (PT SGPS); and

• A loss of EUR69 million related to the internal acquisition of domestic wireline business PT Participacoes.

On 8 December 2014, the board of directors of Oi accepted the proposal from Altice for the disposal of total shares of PT Portugal to Altice Portugal a wholly owned subsidiary of Altice Group. On 22 January 2015, this disposal was approved at the general meeting of shareholders of PT, although it is still pending the approval of competition authorities.