Mobistar said it returned to revenue growth in the third quarter of 2015 after reaping the benefits of a transformation programme earlier than initially expected.
The Orange-owned Belgian mobile operator said total service revenue in the third quarter increased by 0.9 per cent to €276.8 million ($314 million), while restated EBITDA was up 11.3 per cent at €86 million. Net profit was up by a whopping 84.2 per cent at €22.7 million. Consolidated turnover was also 0.6 per cent higher at €306 million.
In the first nine months of the year, service revenue was still 1.5 per cent lower at €813.9 million. However, restated EBITDA increased by 4.8 per cent in the same period to €228.1 million while the net profit was 30.9 per cent higher at €47.8 million.
The improving overall trend persuaded the company's management to upgrade its earnings forecast for 2015 as a whole, with restated EBITDA now expected to exceed the high end of the initial guidance range of between €260 million and €280 million, according to CFO Ludovic Pech. This does not include the costs associated with the launch of cable services.
"We are also delivering excellent cash flow growth and remain committed to further improve efficiency and profitability. Importantly, this has been achieved without jeopardising our return to customer and top line growth while absorbing the initial investments on cable," said Pech.
Analysts from Jefferies International noted that the solid set of third-quarter results is "a credit to management execution so far, in our view, and raised guidance affirms the company's confidence into the remainder of the year."
However, the analysts said the company "needs to deliver a successful cable resale launch, which is still subject to some uncertainty."
Mobistar is banking on being able to resell cable services to allow it to re-enter the multi-services market in order to compete with Proximus, but the planned launch of cable-based broadband digital TV services cannot take place until regulators have published their final decision on wholesale cable prices.
"We also believe two other key risks remain: pricing risk in Belgian mobile, and significant strategic uncertainty created by Telenet's acquisition of Base," Jefferies added.
Mobistar said its employees are well prepared to support the launch of new fixed broadband and TV services. The company added that it has already launched a convergent offering for the SME market: Shape & Pulse, providing a combination of mobile and fixed telephony and mobile and fixed Internet access.
- see the Mobistar results
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