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O2 Czech Republic profits climb 45%; claims success for long term business plan

28 Jan 2016

O2 Czech Republic has published its financial results for the year to 31 December 2015, highlighting a 44.5% year-on-year increase in net profit to CZK5.077 billion (USD204.4 million), which it says shows that its long term business strategy is working. The group’s consolidated results, which include its O2 Slovakia subsidiary but not those of spun-off infrastructure business Ceska telekomunikacni infrastruktura (CETIN), showed that full year revenue was stable at CZK37.385 billion and EBITDA climbed 24.7% y-o-y to CZK10.142 billion. Growth across the operation was fuelled by mobile data, its O2 TV business and O2 Slovakia itself, it said, prompting CEO and Chairman Tomas Budnik to say: ‘2015 was a breakthrough [year] for our company. We were the first globally to voluntar[il]y spin off our fixed and mobile infrastructure. And seven months of independent operation have [confirmed that our assumptions on the benefits] we identified in our analyses [were correct].’ The O2 CR official went on to point out that the new strategy plan has reversed a seven-year run of revenue decline at the company, and increased profitability significantly, while still generating increased free cash flow in 2015 (up 31%) and increasing CAPEX for 2015 and on into 2016.

Operationally speaking, O2 CR closed out 2015 with a total of 4.896 million customers, of which two-thirds (3.237 million) are on monthly contracts and 1.659 million are pre-paid (down 6.5%). Monthly blended APRU was reported at CZK287 for 2015 as a whole, although in Q4 it increased to CZK290 – driven by subscriber growth and the increased proliferation of smartphones, which are now owned by 48.5% of the user base. Further, O2 CR reported that last year it sold more than 300,000 LTE-enabled smartphones – meaning almost 40% of all smartphones on its network were 4G-ready by the year end. Active LTE smartphones (i.e. those with a registered USIM card supporting the new technology) are currently used by more than half million O2 customers, it said.

In the fixed line arena, O2 CR had a total of 795,000 (retail) fixed broadband connections at the end of 2015, including 438,000 using VDSL technology. During 2015, O2 continued to expand and improve its fixed broadband services, adding a further 500,000 households to its VDSL internet footprint offering minimum download speeds of 20Mbps. The works included the installation of new remote DSLAMs and other technological modifications in the autumn of 2015 to help expand the accessibility of VDSL technology. The carrier said that 2015 was a ‘breakthrough’ year for its digital television service O2 TV, thanks in part to the launch of its own sports channel ‘O2 Sport’. By 31 December, O2 CR had signed up a total of 202,000 IPTV subscribers, up 10% on an annualised basis.

Czech Republic, O2 Czech Republic (incl. CETIN), O2 Slovakia

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