ECONOMY

Romanian unit gives OTE a profitable Q2

Greece’s largest telecoms operator, OTE, said yesterday its second-quarter net profit more than doubled because of a lower tax rate and a sharp increase in earnings at its Romanian unit. However, OTE’s domestic fixed-line business revenues fell, extending a three-year trend. Sales have been hit by subscribers switching to mobile phones. «Greek fixed-line operations showed some resilience in the quarter, and we seem to have put a halt to the continuing growth in operating expenses, but the overall performance remains weak,» OTE Chief Executive Panagis Vourloumis said in a statement. OTE is restructuring and cutting jobs as part of efforts to lower the fixed-line division’s costs. The company’s net profit rose to 119.1 million euros in the second quarter from 45 million in the same period a year earlier. Revenues climbed to 1.36 billion euros from 1.3 billion on year. In the second quarter, earnings were buoyed by 20 million euros in income from investments. The company also no longer must bear the costs incurred last year when it sponsored the Olympic Games. The tax rate also fell to 30 percent from 48 percent in 2004. At an operational level, OTE’s Romanian business, RomTelecom, posted a surge in net profit to 57.6 million euros from 9.3 million a year earlier. Talks rumor denied Separately, Vourloumis said OTE is not involved in talks with strategic investors. «There is no basis in any rumor that there is a strategic investor or that the government is talking to a strategic investor,» he told analysts at a conference call. Speculation that OTE, which is 48.6 percent state-owned, was in talks with a strategic investor intensified last week when a Portuguese newspaper said Portugal Telecom was in talks to buy a stake in OTE. A Portugal Telecom spokesman said no decision had been made about stakes in foreign companies. Spain’s Telefonica has also been rumored in the past to be eyeing a stake in OTE. Athens has said it plans to sell a 10 percent stake in OTE by early September as part of its agenda to sell state assets. (AP, Reuters)