Cesky Telecom will start the Czech 3Q reporting season on Thursday, October 27. We expect total revenues to come in at around 3% below the previous year at CZK 45.2bn, broadly in line with the consensus estimate of CZK 45.2bn. We see CT's high EBITDA margins as unsustainable, and estimate a 300bp contraction to 45% from 48% in the first 9 months of last year. However, we expect opex to have grown materially slower at 3.4% to CZK 24.8bn, versus the 25% opex growth in 2003-2004. We will look for details on the Telefonica strategy going forward in terms of business strategy and balance sheet optimization, i.e. payment of a dividend, acquisition or a combination of the two. A conference call will be held on October 27 at 5:30pm CET (4:30pm UK). Dial-in no.: +44-207 162 0025.
IFRS, cons. (CZKm) 9M05E 9M04 % change Consensus
Sales 45,146 46,528 -3.0% 45,170
EBITDA 20,292 22,491 -9.8% 20,590
EBIT 6,669 6,935 -3.8% 6,750
Pre-tax income 6,111 6,414 -4.7% -
Net Income 4,194 4,509 -7.0% 4,260
EPS (CZK, annualized) 17.4 18.7 -7.0% 17.6