ECONOMY

OTE reports 25.3 pct rise in net earnings to 433.4 million euros

Hellenic Telecommunications Organization (OTE), Greece’s largest company, reported yesterday a significant rise in net earnings, but this was still below estimates. Net earnings for 2003 were 433.4 million euros, up 25.3 percent from the 345.8 million recorded in 2002. This was short of the 450.6 million predicted on average by 23 analysts in a poll conducted by Reuters news agency. The improvement was especially significant in the fourth quarter of last year, when net earnings reached 83.6 million euros, whereas in the same period in 2002, a 51.9-million-euro loss was recorded, the result of more than 150 million euros in write-downs. Earnings per share stood at 0.8841 euros, a 25.4 percent increase. Operating revenue for the whole year rose 14.7 percent, to 4.941 billion euros. In the fourth quarter alone, it rose 19.8 percent, to 1.311 billion. Operating income, on the other hand, declined 6.2 percent, to 956.4 million euros for the year and fell 14.9 percent, to 202.4 million, in the fourth quarter. Pretax income rose 15.6 percent, to 911.4 million, in the year. Earnings before interest, taxes and amortization (EBITDA) rose 10.5 percent, to 1.9 billion euros, for the year. Quarterly EBITDA stood at 461.8 million euros in the fourth quarter, a 9.6 percent rise. Despite the rise, OTE failed to reach its stated goal of a 40 percent EBITDA margin. If anything, the margin declined, from 39.9 percent in 2002 to 38.5 percent. The results were filed under US General Accounting Practices and are unaudited. Commenting on the results, OTE Chairman and CEO Lefteris Antonakopoulos commented that the company had achieved a «satisfactory performance in 2003, a year in which the group’s resistance and capacity to change were tested in various ways.» The main challenges for OTE are, on the domestic front, increased competition for fixed-line telephony services and, among the company’s foreign acquisitions, the restructuring of Romania’s Romtelecom and the problems faced by subsidiary Armentel from pirate operators. OTE’s share of fixed telephone services in Greece dropped to 87 percent at the end of the year and Antonakopoulos remarked that competitive challenges «were amplified by an increasingly antagonistic regulatory environment.» OTE shed a net of about 550 jobs last year, most through voluntary retirement. Cable to be completed A good piece of news for OTE emerged yesterday, when Italy’s Environment Ministry announced it had agreed for OTE to lay a fiber-optic cable linking the two countries «after careful consideration of its potential environmental impact.» The ministry said it reserved the right to suspend the project if environmental guidelines were not observed. The cable between the island of Corfu and the southern Italian port city of Bari will be a vital link in Greece’s communications network with the rest of Europe and the United States during the Athens Olympics in August. Earlier this month, OTE accused Italian authorities of delaying approval of a license to lay a final stretch of cable and threatened to take legal action. It said authorization had been delayed by over three months. Most of the cable has already been laid. OTE had said the final stretch would take only a week to finish but that delays were costing the company 50,000 euros a day.