Mobistar said second-quarter profits fell as a result of lower roaming rates in the European Union, but the Orange-owned Belgian operator noted that it gained customers in all segments and is maintaining its full-year EBIDTA guidance for 2015.
In the Q2 period, restated EBITDA fell by 2.7 per cent to €72.2 million ($78.9 million) and net profits declined by 11.6 per cent to €13.5 million. Revenue also dropped by 2.5 per cent to €304.4 million, largely because of a decline in service revenue of 3.6 per cent to €268.9 million. Revenue from mobile equipment sales increased by 6.7 per cent to €30.3 million.
However, analysts from Jefferies International said the "EBITDA miss" was "surprisingly mild" at 1.1 per cent below consensus estimates, and noted that the company has reiterated its full-year guidance for EBITDA of between €260 million and €280 million.
"Even if financial headlines do not look particularly supportive, we note strong postpaid intake and ARPU recovery, which brighten the revenue outlook. The company reiterates its commitment to return to service revenue growth in Belgium towards year-end…This should naturally help EBITDA trends," the analysts said in a research note.
The company was able to report an increase in EBITDA in the first six months of the year, by 1.2 per cent to €142.1 million. The net profit was also 3.8 per cent higher in the first half at €25.1 million. However, revenue was 3.5 per cent lower at €606.8 million.
In terms of customer numbers, Mobistar said it increased its customer base in all segments in Belgium during the second quarter compared to the first quarter of 2015. Total mobile customers excluding those served by virtual operators hosted on the Mobistar network (MVNOs) grew to 3.95 million in Q2 from 3.891 million in Q1, while MVNO customers increased to 1.992 million from 1.711 million.
Looking ahead, Jefferies noted that key risks remain for the operator, such as the pricing risk in Belgian mobile prices, the strategic uncertainty created by Telenet's acquisition of rival operator BASE Belgium, and the "execution risk" regarding the planned launch of fixed services through cable resale.
Indeed, Mobistar--which faces convergence competition from Belgacom and could see a bigger challenge here from Telenet/BASE in future--continues to seek the deregulation of the cable market to enable it to resell fixed services and mount its own converged service challenge.
As things stand, regulators have opened a consultation into their draft decision on the revision of wholesale tariff for access to the cable networks.
CEO Jean Marc Harion noted that Mobistar is at a competitive disadvantage on convergence compared with other market players, although he believes that the Q2 and first-half figures show that its commercial momentum has been restored.
"It was a necessary condition for us to achieve a well-prepared entry into the TV and fixed broadband market place in the forthcoming months. We are now ready to take full advantage of the upcoming cable growth opportunity, provided that the regulatory framework would evolve positively," Harion added.
- see Mobistar's results presentation
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