Telekom Austria swings to a net profit in 2015

Telekom Austria returned to the black in 2015 with a net profit of almost €400 million ($450 million), hailing what CEO Alejandro Plater described as the "best set of full-year results of the past five years."

The America Movil-owned operator managed to turn a 2014 full-year loss of €185 million into a profit of €393 million, on the back of a 4 per cent year-on-year increase in group "clean EBITDA comparable" -- which excludes various extraordinary charges and currency effects -- to €1.37 billion and a 1.3 per cent rise in clean group revenue to €4.1 billion.

Telekom Austria noted that the positive full-year results were driven by its efforts to improve operational efficiency last year as well as a strong fourth quarter and a good performance on the Austrian domestic market.

Jefferies International analysts also described the fourth-quarter results as "strong" and noted that revenue was 2.4 per cent above consensus, while EBITDA was 6.3 per cent above consensus. They added that the operator's guidance of 1 per cent revenue growth for full-year 2016 is in line with market expectations.

In the fourth quarter alone, group revenue increased by 4.5 per cent to €1.076 billion, although on a "clean" basis revenue growth was slightly lower at 4.3 per cent. Group EBITDA comparable rose by 27.3 per cent year-on-year to €320.8 million, although on a "clean" basis growth was lower at 7.7 per cent. The company also posted a net profit of €84.3 million in the fourth quarter compared to a net loss in the same period of 2014.

Despite its solid performance, Plater clearly has no intention of allowing the group to rest on its laurels. He warned that the industry in general "is currently facing unprecedented upheavals on a global level. We must, therefore, invest in infrastructure, new technologies and know-how moving forward. This requires a solid financial basis and, above all, further growth."

Jefferies added that Telekom Austria remains under pressure from MVNO launches in Austria, although the analysts noted that the company argues that it remains successful in "ring-fencing the premium customer segment against competition from the new MVNOs."

The group also continues to face challenges in Bulgaria and the "additional markets" segment, which includes Slovenia, Serbia and Macedonia.

For more:
- see the Telekom Austria results presentation

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