ECONOMY

CosmOTE 9-month earnings up thanks to Balkan activities

CosmOTE, Greece’s biggest mobile operator by number of users, yesterday reported that its nine-month earnings rose 9 percent thanks to its Balkan operations, meeting expectations and boding well for its parent company OTE. Net profit rose to 255.3 million euros ($298.8 million). «The results were in line with a boost coming from its Balkan operations. There were positive surprises from CosmoRom; it actually turned EBITDA-positive in the third quarter,» said Eurocorp Securities analyst George Grigoriou. Earlier this year, CosmOTE took over Romanian mobile carrier CosmoRom from Romtelecom. It has earmarked up to 450 million euros over the next three years for CosmoRom, renamed CosmOTE Romania last month. CosmOTE said the full consolidation of the Balkan units next year would be a key revenue booster. «We expect revenues for 2006 to grow at a faster rate than this year, greater than 15 percent,» Chief Financial Officer Elias Fotiadis told analysts during a conference call. Third-quarter net profit rose 8.8 percent to 96.7 million euros, according to Reuters calculations, broadly in line with analysts’ average forecast of 95.6 million euros. CosmOTE did not provide quarterly figures. The company reiterated its guidance for earnings per share (EPS) growth of 3 to 7 percent this year, with revenues seen up 13 to 15 percent. It also revised upward its 2005 earnings before interest, tax, depreciation and amortization (EBITDA) margin to above 40 percent from a previous target of about 40 percent. CosmOTE shares ended down 0.68 percent at 17.46 euros yesterday, erasing earlier gains. CosmOTE is expected to provide an important financial boost for dominant telecoms group OTE, which holds a 64.4 percent stake. OTE will report third-quarter earnings on November 29. Earlier this year, CosmOTE acquired OTE’s mobile assets in Bulgaria and the Former Yugoslav Republic of Macedonia, which it had been managing since January 2003. «For the first time, we consolidated a total of five mobile operators, including three new international operations. These results prove our conviction that we are entering a new growth phase,» Chief Executive Evangelos Martigopoulos said in a statement. Nine-month earnings before EBITDA increased by a higher-than-expected 10.6 percent to 569.7 million euros, with sales up 7.5 percent at 1.29 billion. CosmOTE added 129,276 new users in the third quarter, bringing its total number of domestic users to 4.5 million at the end of September. AMC, the Albanian mobile carrier majority-owned by CosmOTE, posted a 24.5 percent rise in net income to 32.2 million euros on an 15.8 percent increase in sales to 102.2 million. (Reuters)