OTE says adjusted group profit up 2.4 pct in Q3

OTE Group posted consolidated revenues of €991.2mn in Q3’17, down 0.7%.

In Greece, revenues were down 0.5% to €735.8mn, reflecting higher revenues from mobile operations, primarily fueled by growth in data revenues and roaming, that were more than offset by the decrease in retail fixed voice revenues, lower wholesale revenues from LLU pricing regulation, and reduced revenue due to the completion of the Rural Broadband project. Growth in Broadband and pay-TV revenues was notable once again. In Greek mobile, the rebound in total service revenues initiated in the previous quarter gained momentum in Q3’17.

In Romania, total revenues were down 1.0%, reflecting lower revenues in mobile operations. Conversely, revenues from fixed operations were up 2.2%, driven by higher wholesale revenues and the continuing solid performance from Telekom Romania’s convergent fixed-mobile solution.

Total Operating Expenses, excluding depreciation, amortization, impairment and charges related to voluntary leave schemes, other restructuring costs and non-recurring litigations, amounted to €656.3mn in Q3’17, a slight increase of 0.9% compared to Q3’16. The increase is largely due to traffic-related costs, while most other expense items were down in the quarter.

The Group’s adjusted EBITDA was down 2.3% to €348.7m, reflecting the challenging performance in Romanian and Albania. In Greece, adjusted EBITDA increased by 1.1%, yielding an Adjusted EBITDA margin of 41.2%. Adjusted EBITDA was down 19.5% in Romania, primarily reflecting the performance in mobile, as well as a changing revenue mix in fixed. Adjusted EBITDA was down 30.6% in Albania, where operations were impacted by continuing reduction of incoming revenues.

The Group’s Income Tax charge stood at €42.3mn in Q3’17, down 9.8%, reflecting lower profit before taxes.

Adjusted Group profit after minority interests (excluding one-off items) stood at €76.5mn in Q3’17, up 2.4% compared to Q3’16.

Adjusted Capital Expenditures amounted to €176.2mn in Q3’17, down 4.1%. Capex in Greek Fixed-line operations amounted to €82.4mn. Investments in Romania Fixed-line operations amounted to €38.4mn.
In Mobile operations, adjusted Capex in Greece stood at €35.7mn, in Romania at €12.7mn, and in Albania at €2.5mn. Capex will accelerate in Q4, reflecting the build out of FTTC. In Q3’17, the Group posted negative adjusted Free Cash Flow at €28.1mn, due to the increase in taxes paid.

OTE’s retail revenues in Greece were up nearly 1% in the third quarter, as higher mobile service revenues offset a slight erosion in fixed retail revenues, entirely due to voice. OTE’s total revenues in Greece were down 0.5%, as higher performances in broadband and mobile activities, were offset by lower wholesale revenues. Overall, adjusted EBITDA from combined Greek fixed and mobile businesses increased by 1.1% in Q3’17.

In Q3’17, the total Greek access market (OTE active retail lines, Wholesale line rental connections and full LLU subscribers) lost 4k lines, while OTE’s fixed-line operations posted a limited net loss of 3k access lines.

OTE achieved strong net additions of 34k retail broadband customers in Q3’17, while the total number of OTE retail broadband subscribers rose to 1,716k. Penetration of OTE’s high-speed VDSL broadband service continued to expand, with net additions of 32k in the quarter. At quarter end, OTE’s VDSL offer had been adopted by 311k subscribers, or 18.1% of OTE’s total retail broadband base, up sharply from 16.6% at the end of the second quarter of 2017. OTE is successfully converting a growing number of customers to its high-speed offering, highlighting the market’s appetite for high-speed broadband services and supporting its investment in FTTC. From the total number of cabinets allocated to OTE for
VDSL/Vectoring upgrade last February, the Company had activated approximately 72% by the end of the quarter, with the remaining currently being readied for commercialization, largely within the year. In late November, OTE plans to commercially launch vectoring and super vectoring based products, offering broadband speeds of up to 200Mbps, another step-change in the services offered to its customers.

Accelerated investments, driven by the rapid rollout of FTTC during the year will enable an extended launch ahead of initial schedule. This is expected to boost performance, responding to continuing demand for enhanced high-speed broadband.

OTE achieved a quarter of growth in its TV offering, with net additions of 13k, in a seasonally good quarter. As at September 30, 2017, the total number of TV subscribers amounted to 517k, a year-on-year increase of 8.2%.