OTE net profit falls 27.6% in 1Q15

13 May 2015

OTE has reported revenues of EUR940.8 million (USD1.1 billion) in the three months ended 31 March 2015, down 2.4% from EUR963.7 million in the same period one year earlier, while EBITDA fell 3.4%, dropping from EUR331.2 million to EUR320.0 million year-on-year. Meanwhile, OTE’s net profit dropped 27.6% from EUR55.8 million to EUR40.4 million in 1Q15; however, adjusted net income (taking into account OTE’s voluntary retirement scheme and a one-off fee) saw a decline of only 6.3%, with the bottom line falling from EUR57.5 million to EUR53.9 million. OTE attributed its weaker performance to reductions in mobile termination rates (MTRs) in Romania and Albania, and asserted that its sales figures in these markets would have improved had the steep MTR cuts not been implemented.

In operational terms, OTE’s Greek mobile user base (under the Cosmote division) dropped 1.4% y-o-y, from 7.416 million to 7.308 million. Meanwhile, in the Greek fixed line sector, retail broadband subscriptions increased by 9.3% y-o-y to reach a total of 1.394 million at end-March, with the telco’s VDSL customer base growing by 107,000 connections. Total active broadband subscriptions grew 8.8% to end the quarter at 1.414 million. PSTN connections dropped 4.4% to end the quarter at 2.382 million.

Michael Tsamaz, chairman and CEO of OTE, commented: ‘We started the year on another solid quarter in Greece, where fixed line revenues were up year-on-year and the drop in mobile was reduced. In Romania and Albania, our performance remained under some pressure from the impact of termination rate cuts. All told, the trend towards the stabilisation of our revenue base continues, fueled by our offer of new services meeting our customers’ needs. Our cost discipline, strong operating profitability and cash flow generation enabled us to sustain considerable investments in our networks and service offering during the quarter while preserving a particularly healthy financial structure. We expect these trends to continue throughout the year.’

Greece, Cosmote, Cosmote (old)