Telekom Austria more than doubles Q1 profit as revenue declines slow

Telekom Austria more than doubled its quarterly net income year-on-year in the first quarter of 2015, as a cost-cutting programme helped slow down the rate of revenue decline.

The operator generated a profit of €92.7 million ($99.9 million) in the first quarter of 2015, up 127.5 per cent on the €40.8 million profit made in the same period of 2014. Revenues declined 2 per cent year-on-year to €956 million, which the company blamed on negative price trends in Bulgaria and foreign exchange losses in Belarus.

Telekom Austria noted that revenues at its Croatian business increased by 1.6 per cent year-on-year, and that the rate of revenue decline in its domestic operation slowed during the opening quarter of 2015 as the operator offset a decline in its prepaid business with greater sales to post-pay users.

In its earnings statement, Telekom Austria announced it is standing by its full-year 2015 outlook, namely that group revenues will increase by around 2 per cent, with expenditure in the region of €700 million to €750 million.

The operator's management is confident of achieving its full-year goals thanks to the backing of "new majority shareholder América Móvil and the additional flexibility following the successful conclusion of the capital increase in November 2014."

However, despite its confidence, the company noted that a return to growth "will depend to a large extent on the recovery of the strained economic situation in the CEE region."

The operator's performance in the opening quarter of 2015 surpassed the expectations of analysts polled by the Wall Street Journal, which placed net income at €46 million, the newspaper's MarketWatch publication reported.

Telekom Austria CEO Hannes Ametsreiter said the first quarter net income reflects optimisation efforts that see the company thinking "twice about every cent we spend" and "streamlining" its operations in a bid to return to growth.

For more:
- see Telekom Austria's earnings statement
- read Hannes Ametsreiter's comments
- view this MarketWatch article

Related Articles:
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Telekom Austria announces €1B capital increase
Austria's consumer prices rise following mobile market consolidation
Telekom Austria swings to 2014 net loss, sees growth in 2015

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