is due to report 2Q13 figs on Wednesday, July 24 @ 7 am. We expect net income in 2Q13 to drop 11.6% y/y to 1.44 bln. CZK especially due to continuing declines in both fixed and mobile segment. On the other hand lower operating and D&A costs should help mitigate negative trends in company’s operations.
We expect revenues in the fixed line segment to reach 4.99 bln. CZK in 2Q13, lower 5.8% y/y as most of the decline should come from voice retail which should come in 16.8% lower y/y to 1.16 bln. CZK. Fixed broadband continues to face the pressure from wifi and cable internet providers. As a result, we expect revenues from fixed broadband to decline 1.3% y/y to 1.54 bln. CZK.
- 2Q13 preview
| CZ Fixed business revenues | 5,29 | 4,99 | 5,00 | -5,8% | -5,5% |
| CZ Mobile business revenues | 6,24 | 5,61 | 5,65 | -10,1% | -9,6% |
| Group total revenues | 12,75 | 11,92 | 11,97 | -6,5% | -6,2% |
| OIBDA | 4,91 | 4,56 | 4,54 | -7,1% | -7,5% |
| EBIT | 2,09 | 1,83 | 1,80 | -12,3% | -13,7% |
| Net income | 1,63 | 1,44 | 1,43 | -11,6% | -12,1% |
- 1H13 preview
| CZ Fixed business revenues | 10,58 | 9,99 | 10,01 | -5,6% | -5,5% |
| CZ Mobile business revenues | 12,35 | 11,29 | 11,32 | -8,5% | -8,3% |
| Group total revenues | 25,22 | 23,85 | 23,89 | -5,4% | -5,3% |
| OIBDA | 9,68 | 8,66 | 8,64 | -10,6% | -10,8% |
| EBIT | 3,99 | 3,19 | 3,17 | -20,0% | -20,7% |
| Net income | 3,25 | 2,49 | 2,48 | -23,5% | -23,8% |
Conference call: Wednesday, July 24, 2013 @ 1 pm CET
Investors will pay more attention to results in the mobile segment as introduced its new unlimited tariffs as of 2Q13. mobile segment revenues should decline by some 10.1% which would mark the biggest decline since 2Q11. Revenues from voice services should be lower 9.0% y/y due to the pressure on ARPU stemming from new unlimited voice tariffs. We see ARPU in voice services down 12% y/y. Furthermore, revenues from mobile termination should decline 35.6% to 552 mln. CZK due to MTR cut in Q1. Negative trend in voice services should partly be offset by higher mobile data revenues (up 2.0% y/y) and mobile revenues in Slovakia (+9.8% y/y).
Negative trends in both the fixed and mobile segment should partly be mitigated by lower operating costs (-6.3% y/y). We estimate OIBDA at 4.56 bln. CZK, down 7.1% y/y. This implies OIBDA margin of 38.2%, 0.3 ppt lower y/y. The company is likely to reiterate its rather general outlook for this year of limited margin erosion and capex of less than CZK 6 bln. excluding investments for spectrum license. Regarding the LTE spectrum auction we expect the company to reiterate its negative stance to new auction rules.