Twist in Telekom Austria earnings

The first nine months of 2013 have proved tough on Telekom Austria, which yesterday reported a near 12% drop in profit year-on-year.
Austria’s incumbent cited competition in its core Central and Eastern European markets along with regulator-induced cuts in roaming rates for the decline in profit from €180.1 million in the first three quarters of 2012 to €159.2 million in 2013.
Group revenues fell 2.6% year-on-year, as declines in Austria, Croatia, and Bulgaria offset growth in Belarus, Serbia, Macedonia, and Liechtenstein.
Hannes Ametsreiter, chief executive of Telekom Austria, says the firm achieved a “solid operating performance,” in the opening nine months, pointing to stability in the domestic fixed line business, and a strong mobile strategy that sees the firm “on the right track to safeguard our core mobile business across the group.”
Net additions were up 2.7% year-on-year, dominated by mobile subscribers, which grew 632,000 to 21.2 million. Fixed line additions of 35,000 took the total to 2.6 million. Mobile broadband subscribers grew 10.9%, and fixed 6.9%.
Hans Tschuden, chief financial officer and deputy chairman of Telekom Austria, reiterated Ametsreiter’s view it has been a solid nine months for the telco, and confirmed full year forecasts of revenue of €4.1 billion and cost savings of at least €100 million.
“We are committed to counteracting both regulatory obstacles and the stiff competition we are facing in our markets with a strict cost efficiency program throughout the Group. In the period under review, we were able to achieve gross savings of over €110 million,” Tschuden notes.
Third quarter figures paint a more troubling picture, with net profit of €51.3 million in 3Q13 nearly half the €99.2 million made in 3Q12. Revenues fell 5.3% year-on-year.