By Nicole Lundeen
VIENNA--Telekom Austria AG (TKA.VI) Wednesday released
first-quarter earnings that showed net profit soared due to
cost-cutting and a one-off effect from its Slovenian business.
"We are currently optimizing our operating business, we think
twice about every cent we spend and we are streamlining the Telekom
Austria Group to bring it back to its growth path," the company's
Chief Executive Hannes Ametsreiter said.
In the first three months of the year, the Austrian
telecommunications company's net profit more than doubled to 92.7
million euros ($99.4 million) from EUR40.8 million a year earlier,
while revenue decreased 2% to EUR956 million from EUR975.9 million.
This beat analyst expectations for net profit. In a poll conducted
by The Wall Street Journal, analysts had seen Telekom Austria
posting a net profit of EUR46 million and revenue of EUR970
million.
Telekom Austria confirmed its guidance for 2015, which foresees
revenue growth of 2% and capital expenditure of between EUR700
million and EUR750 million. It confirmed that management will
suggest a dividend payout of EUR0.05 a share at its next general
assembly on May 27.
The company's earnings were boosted by a one-off EUR20.0 million
settlement in Slovenia with Telekom Slovenije d.d. Its home market
of Austria also turned in a strong performance, with earnings
before interest and taxes increasing by 51% to EUR87.4 million,
Telekom Austria said. Its Bulgarian market continued to be highly
competitive, but the company said its reform program has started to
show results with increased sales in mobile services and fixed-line
broadband.
Although revenue in Belarus increased by 17% when denominated in
Belarusian rubles, currency fluctuations mean that euro-denominated
revenue fell 4.7% to EUR77.2 million. Telekom Austria said it cut
costs by 1.6% or EUR10.9 million.
Telekom Austria is majority owned by Mexican telecommunications
giant America Movil SAB de CV, which last year raised its stake in
the company to just under 60% of all of the shares. America Movil
has a shareholder agreement with the Austrian government's holding
company Oesterreichische Bundes und Industriebeteiligungen GmbH, or
OeBIB, which holds just over 28% of Telekom Austria's shares.
Write to Nicole Lundeen at nicole.lundeen@wsj.com
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