OTE sees ‘headwinds’ affecting results this year; Q1 profit down 16%

5 May 2016

Greek telecoms group OTE has reported a 16.1% drop in first-quarter net profit to EUR33.9 million (USD39 million) due to the impact of bailout measures in its domestic market which have led to increased taxation. Sales fell 1.3% to EUR928.5 million, while pro forma EBITDA dropped 5.1% to EUR309.3 million. As well as the economic situation in Greece, OTE says its operations in Romania are also being hit by increased competition.

There were some positives for the telco in operational terms, with retail broadband subscriptions in Greece rising 10.7% year-on-year to 1.54 million at 31 March 2016; this included a 56.5% jump in VDSL users to 167,943. IPTV and satellite TV user numbers were also up, rising 24.9% y-o-y to 458,269. The domestic mobile user base climbed 2.3% to 7.47 million. There was a 1.8% y-o-y fall in fixed broadband subscriptions in Romania, however, to 1.19 million, while the Romanian mobile total decreased by 4.0% to 5.65 million. The group’s cellular operation in Albania saw user numbers plummet 17.3% to 1.71 million due to regulatory changes last year which ended the differentiation between on-net and off-net calls, meaning customers are no longer buying SIM cards for multiple operators to take advantage of cheaper on-net pricing.

OTE’s CEO Michael Tsamaz said: ‘We are fully aware of the headwinds in front of us for the balance of the year, particularly from the implementation of measures impacting the disposable income of our Greek customers and potentially the demand for our services.’ OTE is 40%-owned by Deutsche Telekom of Germany.

Albania, Greece, Romania, Cosmote, Cosmote (old)