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Telekom's H1 net profit up 35% on lower sales

Ljubljana, 24 July (STA) - Telekom Slovenije posted a net profit of EUR 19.6 million for the first half of the year, an increase of 35%, even as sales revenue declined 5% to EUR 340.6 million, the company said on Wednesday.

Group profit before income tax, depreciation and amortisation (EBITDA) rose 11% to EUR 112.3 million and pre-tax profit (EBIT) surged 41% to EUR 23.8 million.

The company said sales revenue was down due to the sale of Blicnet, which was completed in the second half of the year, and lower revenue from fixed segment of the end-user market, primarily due to the completion of the Slovenian e-tolling system in 2018.

Telekom having offloaded most of its foreign subsidiaries in recent years, leaving it only with the Kosovo operator Ipko, the bulk of the sales and profit it generated in Slovenia; Kosovo accounts for less than a tenth of group revenue.

But the interim report also shows the group's position deteriorated overall, with the number of fixed and mobile retail connections dropping by about 2% in Slovenia and Kosovo, and broadband connections down 2% in Slovenia and as much as 7% in Kosovo.

In the first quarter of the year, the latest period for which data is available, Telekom remained market leader in all major segments but it continued to lose market share.

In the key mobile telephony segment, its market share contracted by 3.4 percentage point at the annual level to 41.9%, while in fixed broadband it contracted by over a percentage point to 32.3%.

The majority state-owned company also announced today it would propose dividends of EUR 4.50 gross per share at the 30 August annual general meeting, which would mean distributing around three-quarters of the EUR 39 million in accumulated profit among shareholders.

The proposal is significantly below last year's dividend payout, but it is by no means certain to be endorsed: last year the management proposed a payout of EUR 6.30 gross per share, but Slovenian Sovereign Holding (SSH) succeeded with a counter-proposal for dividends of EUR 14.30.

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