ECONOMY

As profits plunge, OTE plans its New York exit

OTE telecom, 30 percent-owned by Deutsche Telekom, reported a larger-than-expected fall in first-quarter profits and warned of steeper drops in earnings figures this year as Greece moves deeper into recession. OTE, which is present in four countries, said net income for the first three months of the year fell by an annual pace of 75.5 percent to 65.8 million euros following a revenue drop in Greek fixed-line operations and mobile telephony abroad. Analysts were looking for a figure of about 97 million euros. «As businesses and consumers adapt to the austerity measures of the new economic rescue plan, we are likely to see an increase in disconnections and a slowdown in telecoms spending,» said OTE Chairman Panagis Vourloumis. Its Greek mobile phone arm, Cosmote, bucked the downward trend, with revenues rising 1.8 percent to 464.7 million euros as a price war with rivals Vodafone and Wind Hellas continued. Analysts blamed the larger-than-expected profit drop on higher taxes resulting from an audit of the company’s books for the last three to four years. Shares in OTE fell 2 percent to 7.89 euros yesterday versus gains of 0.82 percent on the broader market. As part of efforts to cut administrative costs and simplify its reporting procedures, OTE said it will delist its American Depository Receipts (ADRs) from the New York Stock Exchange in the second half of the year. ADRs enable US investors to buy shares in foreign companies without being forced to conduct cross-border and cross-currency transactions.