ECONOMY

CosmOTE reports 9 percent rise in Q1 net profit on usage growth

Mobile operator CosmOTE matched market expectations yesterday as it reported a 9 percent rise in first-quarter net profit, thanks to growth of usage in the local market and in Albania. The country’s largest mobile provider by users said net profit rose to 75 million euros ($94.5 million) compared with an average forecast of 73.7 million in a Reuters poll of 15 analysts. Earnings before interest, tax, depreciation and amortization (EBITDA) rose 9 percent to 166 million euros while sales increased 6 percent to 380 million euros. «The effect from lower interconnection rates has been counterbalanced by usage growth while the EBITDA margin improvement have been mainly fueled by lower marketing expenses,» said Egnatia Finance analyst George Papaggelis. CosmOTE said a lower corporate tax rate effective this year lifted its income margin to 19.6 percent from 19 percent. CosmOTE said it added 79,601 users in the first quarter, lifting its total customer base to 4.23 million, confirming its top position in the local market, and ahead of Vodafone Greece with 3.99 million. AMC, CosmOTE’s majority-owned mobile subsidiary in Albania, posted a 20.2 percent rise in net income to 9.8 million euros on an 18.2 percent rise in revenues to 31.9 million euros. CosmOTE said it would recommend a 2004 remaining annual dividend per share of 0.57 euros to shareholders, which comes on top of a 0.90 dividend paid out in March. The operator, 64.3 percent owned by the country’s dominant fixed-line provider OTE, reported results under US GAAP. Cosmorom CosmOTE also said it is close to reaching a deal to help revive struggling Romanian mobile phone provider Cosmorom. «We are close to an agreement with regard to Cosmorom. There are a few outstanding issues to be addressed,» Chief Executive Evangelos Martigopoulos told analysts. Cosmorom, a wholly owned subsidiary of fixed-line telecoms operator Romtelecom, is in severe need of investments to carry on its business. OTE, the majority owner of Romtelecom, is keen to revamp Cosmorom but has not taken action as it is still waiting for a response from minority shareholders, effectively the Romanian government. Analysts said they expect Cosmorom to be relaunched and CosmOTE could contribute up to 200 million euros in the plan and may take over management of the company. Cosmorom owes a total of about 190 million euros ($238.8 million) to suppliers and serves less than 2 percent of the Romanian mobile market. (Reuters)