The largest domestic telecommunication group O2 posted in the first quarter of this year fall of net profit by 13.5 percent to CZK1.74bn and revenues dropped by 6 percent to CZK12.87bn.
- 1Q11 results
| CZ Fixed business revenues |
6,15 |
5,64 |
5,69 |
-8,3% |
-0,9% |
| CZ Mobile business revenues |
7,03 |
6,42 |
6,50 |
-8,6% |
-1,2% |
| Group total revenues |
13,83 |
12,89 |
12,99 |
-6,8% |
-0,8% |
| OIBDA |
5,35 |
5,07 |
5,15 |
-5,2% |
-1,5% |
| EBIT |
2,59 |
2,20 |
2,20 |
-15,2% |
-0,1% |
| Net income |
2,01 |
1,74 |
1,73 |
-13,5% |
0,5% |
Overall, results are mostly in-line with cons at all levels. Consolidated business revenues went down 6.3% year-on-year in 1Q 2011 largely due to additional MTR cuts, prevailing competitive pressure, slow recovery of customers' spend patterns in mobile segment, while fixed business remained under pressure due to lower ICT revenues. Guided OIBDA decreased by 4.1% year-on-year in 1Q 2011. Consequently, OIBDA margin improved by 0.9 percentage point reaching 41.3% in 1Q 2011 on the back of continuous OpEx efficiencies and positive OIBDA in Slovakia. The company maintains its full year guidance. It expects adjusted OIBDA to decline 1% to 5% this year.
The management of TEFO2 said yesterday after the 1Q11 results that the company is generating lots of free cash-flow, but will discuss its dividend policy at the end of this year. The management also wants to avoid volatility in its dividend but it wants to distribute all free cash-flow it generates. It can be that the company will restructure balance sheet as it has over 24 bln CZK in share premium that could be distributed in the future. /Slightly positive - we expect the company has ability to maintain 40CZK/div for next couple years/