Business News

Telco Nine-Month Profit Slumps to EUR 6.3M

Ljubljana, 25 November (STA) - The net profit at Slovenia's telco Telekom Slovenije stood at EUR 6.3m for the first three quarters of this year, a fall of 83% on the same period a year ago. The group blamed higher programme costs and impairments of liabilities for the drop.

The overall profit also continued to be impacted by loss-making ventures in Kosovo in Macedonia, which will require several more years to be profitable, Telekom Slovenija's managers told the press on Thursday.

Chief financial officer Jozko Peterlin explained that impairments of liabilities due to defaults by operators using its infrastructure in Slovenia shaved off EUR 10m from Telekom's net profit in the first nine months of this year.

While the parent company made a net profit of EUR 42.5m for this period, the Kosovo subsidiary made a loss of EUR 7m and the Macedonian subsidiaries EUR 19m.

Telekom chairman Ivica Kranjcevic said the Kosovo subsidiary Ipko will require two more years to be profitable, while the Macedonian subsidiaries should break even in three years.

In terms of earnings before interest, tax, depreciation and amortisation (EBITDA) all subsidiaries of the group finished in the black, with the total result at EUR 197m.

The group's operating revenues were down by 1% to EUR 633.3m, with the biggest drops registered on the domestic market, where both the parent company and mobile operator Mobitel saw 4% drops in revenues.

Kranjcevic pointed to "overzealous regulation" as one of the factors impacting on its domestic operations. He said that regulation of its fixed networks was now expanding to all segments of Telekom's infrastructure.

He said that a continuation in this trend may slow down the construction of the fibre-optic network in rural areas.

The group invested EUR 70m in network infrastructure in the three quarters of 2010, which is 45% less than in the same period last year.

The parent company led in terms of investments, earmarking nearly EUR 28m for this purpose, followed by the Macedonian subsidiary with 14.5m.

The group saw a 3% increase in the number of broadband subscriptions compared to the end of 2009, with the biggest growth registered in Albania and Kosovo. The number of broadband subscriptions in Slovenia remained flat.

There was little change in the number of mobile subscribers in Slovenia, although the Kosovo subsidiary saw a 16% drop in mobile subscriptions compared to the end of last year. Overall, the number of fixed and mobile telephony subscriptions was down by 4%.

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