ECONOMY

OTE reports Q3 net loss

Greece’s largest telecoms operator, OTE, said yesterday it had swung to a third-quarter net loss owing to restructuring provisions, but that underlying profit was buoyed by its mobile unit and Romanian fixed-line operations. OTE posted a net loss in the three months to Sept. 30 of 541 million euros ($634.4 million), including a charge of 912.9 million euros ($1.07 billion) to cover the cost of its voluntary redundancy program. That compares with a net profit of 19.3 million euros the previous year. Without the charge, OTE said profit after tax was 131.6 million euros ($154.3 million) on the strong performance of the company’s mobile unit CosmOTE and its Romanian fixed-line unit RomTelecom. A consensus of analysts had seen underlying net profit rising to 90 million euros ($105.5 million). OTE has a primary listing on the Athens Stock Exchange and a secondary listing on the New York Stock Exchange. The results are calculated according to US Generally Accepted Accounting Principles. OTE said it will report its financial results exclusively under International Financial Reporting Standards from next year. OTE said it may reduce its charge provision if the European Union approves the Greek government’s plan to contribute a 4 percent stake in OTE’s share capital to the company’s pension fund. The charge relates to 4,890 employees who chose to take voluntary redundancy under a plan OTE announced on May 25. A previous early-retirement scheme, accepted by 635 employees, as well as scheduled retirements and normal attrition, will see 5,750 employees, or 36 percent of OTE’s Greek fixed-line work force, leave the company over the next 12 months. OTE said it estimates total voluntary redundancy costs to total more than 1.1 billion euros ($1.29 billion). Analysts had forecast a voluntary redundancy charge of 1.4 billion euros ($1.64 billion) in the third quarter. OTE said implementation of the redundancy program is continuing, but shouldn’t lead to any material reduction in payroll and operating expenses in the fourth quarter. Total company revenue rose 3 percent to 1.41 billion euros ($1.65 billion) boosted by the increased contribution of CosmOTE and RomTelecom. Revenue at OTE’s mobile unit rose nearly 12 percent in the third quarter while at RomTelecom it rose nearly 7 percent. But total Greek fixed-line revenue fell about 3 percent to 679.4 million euros ($796.66 million) as higher monthly rentals and leased-line revenues weren’t enough to offset lower voice and traditional services, OTE said. Looking ahead, OTE said it expects operational trends in the fourth quarter in line with the company’s performance to date, while Greek fixed-line revenues may be negatively impacted by regulatory action. (Reuters)