Telekom Austria expects modest revenue growth in 2016

Telekom Austria's management said it "remains confident" of achieving modest group revenue growth in 2016 as it seeks to counteract headwinds in certain markets as well as the reduction in mobile roaming charges across the European Union.

The group said it managed to increase total revenue (+2.3 per cent) and EBITDA (+1.3 per cent) on a reported basis in the first half of the year despite strong competition in the Austrian mobile market as well as ongoing challenges in Central and Eastern Europe (CEE). However, on a proforma basis -- including the effects of mergers and acquisitions carried out in the past 12 months -- revenue and EBITDA were marginally lower.

"For the remaining months of 2016, the above-mentioned business conditions are expected to remain intact," the group's management observed, noting that it would continue to focus on the expansion of products and services and invest further in LTE and fibre to drive growth.

The group also ruled in the possibility of further "value-accretive" mergers and acquisitions, indicating that it could look to expand its footprint within its existing markets.

In the first six months of 2016, group revenue fell by 1.2 per cent to just over €2 billion ($2.2 billion) compared with the proforma result for the same period of 2015. EBITDA was also 1 per cent lower at €663.6 million, which the group attributed entirely to the impact of a €20 million extraordinary effect in Slovenia in January 2015. The net result fell by 4.6 per cent year-on-year to €163.4 million in the first half of 2016, in part due to a 47.2 per cent rise in reported income taxes.

Telekom Austria group saw a slight decrease in the number of mobile subscribers as increases in Austria and Slovenia failed to offset declines in the other segments. In general, CEE markets saw a shift from prepaid to postpaid offers, the company added.

M&A in the past 12 months included the acquisition of fixed-line reseller Amis in Slovenia and in Croatia, consolidated as of Sept. 1, 2015; the acquisition of fixed-line operator Blizoo in Bulgaria, consolidated as of Oct. 1; and the merger of Vip and One operator in the Republic of Macedonia, consolidated as of Oct. 1.

For more:
- see the Telekom Austria results statement

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