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Telekom Slovenije Reports EUR 25M in H1 Profit (II)

Ljubljana, 25 August (STA) - The group around telco Telekom Slovenije generated EUR 25.1m in net profit in the first six months of 2011, which is almost a five-fold increase compared to the same period last year. Revenues were meanwhile down 3% to EUR 402.3m, according to an earnings report released by the company on Thursday.

The results are favourable, Telekom Slovenije chairman Ivica Kranjcevic told the press, adding that the group has already come close to achieving its yearly goal, EUR 28.1m in net profit.

The group registered EUR 138.3m in earnings before interest, tax, depreciation and amortisation (EBITDA), up 5% compared to last year, while its earnings before interest and taxes (EBIT) stood at EUR 40.3m, a 61% increase.

This means that Telekom Slovenije made a u-turn on the years-long trend of the falling index, head of the controlling sector Samo Jost said.

Telekom Slovenije has implemented a number of measures for lowering costs, restructured the activities of its affiliates abroad, implemented changes in sales and marketing, renewed its business processes and optimised its operating capital, all in line with its strategic plan for the period until 2015.

While long-term measures for boosting revenues have not been completely implemented yet, a positive sign is that the affiliates in Kosovo and Macedonia have seen growth in the first half of the year, the company said.

The group also believes that the trend of its falling share on the domestic market, brought about by strong competition, will eventually stop and revenues will consolidate.

Telekom Slovenije also pointed to a reduction in its financial debt by 18% or almost EUR 100m as another positive sign.

The group has meanwhile severely cut back on investments. Most of the total sum, EUR 30m, went to Telekom Slovenije (EUR 13.5m), its mobile arm Mobitel (EUR 8m) and its subsidiaries in Macedonia (EUR 2.5m).

In the future, Telekom Slovenije plans to mainly invest in modernising the classic telephone connection network, in creating an all IP network and going LTE in its mobile operations. The group also plans an expansion in Kosovo through its Ipko company.

The group moreover decreased the number of its employees by 5% to 4,794. It mostly let go of workers at Ipko, Telekom Slovenije and its companies in Macedonia.

The supervisory board of Telekom Slovenije also reviewed the report and gave its full support to the management for future work, ordering it to put all the effort in boosting sales.

Meanwhile, the group was tasked with merging its two biggest companies - Telekom Slovenije and Mobitel - in the first half of 2011 and successfully pulled it through on 1 July. The group estimates that the merger will bring in some EUR 140m by 2015.

The management and the supervisory board have established that a counterproposal by the Capital Assets Management Agency for a divided payment of EUR 3.40 gross per share instead of EUR 3 proposed by them would not importantly affect the company's operations, which is why they are not opposed to the agency's proposal.

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