WASHINGTON: Greek operator OTE reported lower first-quarter results, as continued growth in the fixed market was offset by weakness in mobile and at its Romanian activities. Revenues fell 1.3 percent to EUR 928.5 million, and adjusted EBITDA declined 5.1 percent to EUR 309.3 million. The margin dropped to 33.3 percent from 34.7 percent a year ago. Net profit fell 16.1 percent to EUR 33.9 million. After a 3.1 percent increase in capital expenditure to EUR 164.7 million, adjusted operating cash flow fell 11.2 percent to EUR 189 million.
OTE said it expects market conditions to remain challenging this year, as potential tax measures in Greece could further dampen demand. It plans to continue investment to help support customer retention and the top line, investing in total around EUR 550 million this year. The company maintained its outlook for free cash flow to reach EUR 500 million in 2016.
In Greece, OTE reported quarterly fixed revenues up 1.7 percent to EUR 378.9 million, and adjusted EBITDA increased 8.0 percent to EUR 161.1 million, giving a margin of 42.5 percent. The operator said results were boosted by record VDSL customer growth and expansion in TV and ICT services. EBITDA benefited from the reduction in personnel, and OTE said it is working on a further cost reduction through energy savings.
The number of retail broadband customers rose by 37,000 in the three months, good for 58 percent of total market net additions, bringing OTE’s total base to 1.544 million. VDSL added 18,000 new retail customers for a total 168,000 and also gained traction in the wholesale market, the operator said. TV customers were up by 25 percent year-on-year to 458,000, and revenues from ICT services rose 16.6 percent, supported by the private sector as government contracts slow.
In the mobile market, Cosmote posted revenues down 5.7 percent to EUR 276.9 million, with a 3.1 percent fall in service revenue and 13.5 percent lower equipment revenues. The mobile customer base was up 2.3 percent year-on-year to 7.5 million, while ARPU fell 4.4 percent to EUR 11 due to lower usage. Cosmote’s 4G network reached 83 percent of the population at the end of March, helping total data traffic increase 43 percent year-on-year.
