Telekom Austria confident despite profit fall

Tough competition and regulatory measures drove Telekom Austria’s profits down during 1H10, however the firm remains confident it will only lose €100 million in sales for the full year.
 
Net income fell 4.6% to €159.9 million during 1H10, as falling revenues from the firm’s mobile business resulted in a 3.9% drop in group sales to €2.2 billion during the period.
 
The firm blamed lower interconnection tariffs for a 2.8% fall in sales at its mobile business to €778.4 million during 1H, however its fixed line division maintained revenues at €485.5 million, as a rise in broadband subscriptions offset lower voice income.
 
While the firm said tight cost controls helped minimize losses at the mobile division, they weren’t enough to prevent group EBITDA falling 8.3% to €829 million.
 
Hannes Ametsreiter, group CEO, said a fiercely competitive mobile market, and regulatory and economic pressure impacted the firm’s performance in 1H10, but remained confident it would hit its full-year targets.
 
The firm expects full-year revenue to fall €100 million to €4.7 billion, with EBITDA in the range of €1.6 to €1.65 billion.
 
Analysts said the operator’s results were broadly in-line with expectations and predicted the markets would react positively to its updated guidance, WSJ.com reported.
 
However, Telekom Austria missed estimates for net profit during 2Q10, which at €68.7 million was well below the €80 million analysts predicted, the news site said.

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