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Telekom Group Ends First Quarter with a Loss

Ljubljana, 20 May (STA) - The group around telco Telekom Slovenije generated EUR 203.4m in revenues in the first quarter of 2010, up 3% year-on-year. It however posted a net loss of EUR 633,000, which compares to a EUR 12.9m net profit in the same period last year, Telekom said in a press release on Thursday.

Profit before income tax, depreciation and amortisation (EBITDA) was at EUR 65.34m, which is an improvement of 7% compared to the first three months in 2009.

According to Telekom, the loss is mainly a consequence of negative results of Macedonian subsidiaries and write-offs in the core company Telekom Slovenije.

The biggest companies in the group, Telekom Slovenije and mobile operator Mobitel, posted a EUR 850,000 and a EUR 7.9m in net profit, respectively.

Investments within the group in the first quarter amounted to EUR 25m or EUR 8.9m less than in the same period last year.

Telekom Slovenije invested EUR 10.1m and Mobitel EUR 2.7m, while investments in Southeastern Europe amounted to EUR 10.8m, the bulk of it in Macedonia.

The core company had at the end of March EUR 9m of due claims to Slovenian electronic communications operators, of which 87% were claims to company T-2.

Mobitel increased the number of subscribers by 5% to 828,108, while the number of pre-paid users dropped by 14% to 350,453.

"The results for the first quarter are a very serious warning. Better operations cannot be achieved only by increasing revenues, but severe cost cuts should be made both in the short and medium terms," chief supervisor Tomaz Berginc commented on the results.

Telekom Slovenije CEO Ivica Kranjcevic agreed that the group's results are not satisfying. He added that the management had already carried out cost-cutting and efficiency measures, while long-term plans envisage reorganisation and consolidation.

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