ECONOMY

OTE registers further drop in sales, profits

OTE telecom posted a significant decline in profits and turnover in the first quarter of 2011, according to data published by the group on Friday, mostly due to the considerable fall in the revenues of its mobile subsidiary Cosmote.

Group revenues came to 1.22 billion euros, down 13 percent year-on-year, and earnings before interest, tax, depreciation and amortization (EBITDA) contracted by 18 percent to 393 million euros, while net profits reached 30.2 million euros, representing a drop of 54 percent.

Income was seriously affected by the course of Cosmote?s domestic operations, as the subsidiary posted an 18.5 percent slump in revenues, while fixed-line OTE revenues also declined by 13 percent in Greece.

All OTE?s major subsidiaries in Greece and abroad registered a drop in revenues and earnings, but profits were particularly affected by the group’s extraordinary expenses, amounting to 40 million euros, for the reduction of staff by about 1,600 people (300 at Cosmote-Germanos, 250 at OTE and 1,000 at Romtelecom).

The group’s administration attributed OTE’s poor figures for the first quarter of the year to the economic crisis in Greece and the obstacles that the regulatory authority has allegedly raised regarding its commercial policy.

“Facing similar challenges to those at the end of 2010, mainly the continuing financial stagnation and our noncompetitive prices in markets that are regulated, our revenues continued to change in this quarter in the same way as in the last quarter of 2010,» commented the group’s chairman and chief executive, Michael Tsamaz.

He estimated that, based on the measures that the group?s administration has taken, no rebound can be expected before the second half of the year.