CosmOTE boosts Q1 net profits

Mobile phone operator CosmOTE yesterday beat market expectations as it reported a 33-percent jump in first-quarter net profits on the back of increased airtime by contract subscribers and higher profits from its Albanian subsidiary. The company said consolidated net profits after taxes and minority rights rose to 49 million euros, boosting the rate of return to 33.2 percent or 0.149 euros. Earnings before interest, tax, depreciation and amortization (EBITDA) increased by 32.4 percent to 114.4 million euros while the EBITDA margin at 43 percent against 41.9 percent last year was the highest in the sector. CosmOTE attributed the 29-percent jump in consolidated sales to 265.9 million euros to a 43-percent rise in airtime revenues and a 36.5-percent increase in interconnection charges. The company said revenues from telecommunication services amounted to 96.5 percent of total sales, up from 94.8 percent. The more lucrative contract subscribers could prove to be an engine of growth for CosmOTE following a sharp rise in their minutes-of-usage (MoU). «The most interesting data point is that contract MoU increased to 146 minutes, up 21 percent,» Schroder Salomon Smith Barney said in a research note. Just as encouraging, the company’s pre-pay customers increased to 52 percent of its total customer base, a nine percentage point rise. Average revenues per user amounted to 28 euros against 41 euros for contract subscribers. CosmOTE said capital expenditure fell to less than half of the outlay last year, lifting its net cash flow. AMC, the Albanian subsidiary, posted EBITDA of 18.9 million euros, making up 16.6 percent of group EBITDA. Net profit margin rose to 31.5 percent. Turnover increased by 64 percent to 28.3 million euros. Subscribers increased by 3.5 times to 302,396. Despite the entry of rival Panafon in Albania, the low mobile phone penetration rate in the country, estimated at 12 percent, means the two operators could grow comfortably for some time to come. CosmOTE reported slightly more than 3 million subscribers at the end of March, giving it a market share of 37.3 percent. Its shares were down by 0.18 percent yesterday to close at 10.96 euros.