ECONOMY

CosmOTE meets profit forecast, tops 4 million customers

Mobile operator CosmOTE met forecasts by reporting a 25 percent rise in nine-month net profit yesterday as customers made more use of their phones. Management kept its guidance for this year and next unchanged, adding that a proposed 3 percent cut in the corporate tax rate next year will boost its earnings outlook. The operator had said it expects an 18-20 percent rise in 2004 revenues and margins on earnings before interest, tax, depreciation and amortization (EBITDA) of about 43 percent, and on net income of about 19 percent, with 2005 sales, EBITDA and net income seen growing by mid-single-digit percentages. The largest mobile service provider in Greece in terms of user numbers, which is majority-owned by OTE, said its group net profit rose to 234 million euros ($305 million), calculated to US generally accepted accounting principles. EBITDA climbed 21 percent to 515 million euros. Third-quarter net profit rose 22 percent to about 89 million euros, according to Reuters calculations, broadly in line with the average analyst forecast of 90 million euros. CosmOTE shares closed 0.86 percent up at 14.10 euros, with year-to-date gains at 31 percent against around 17 percent by the broader market index. Early this month, parent OTE said it aimed to transfer its two Balkan mobile assets to CosmOTE in exchange for more shares in its mobile arm, which will carry out a share capital increase as part of the deal. Chief Financial Officer Elias Fotiadis told analysts during a conference call that the company hopes to complete the deal in the first half of 2005. Analysts warned of slower growth ahead as competition bites, but said continued usage growth would underpin future performance. Nine-month group sales increased 21 percent to 1.2 billion euros. CosmOTE said non-recurring revenue from the Aug. 13-29 Olympic Games came to around 25 million euros. The operator added around 15,600 subscribers in the third quarter, lifting its total to 4.09 million users, securing its top spot in the domestic market. (Reuters)