For the first time the 1Q05 results showed a y/y comparison of CT's results with a 100% consolidation of Eurotel. Consolidated sales came in in line with our estimate but slightly below the market's forecast due to continued pressures in the fixed-line segment and in particular in the fixed-line calling revenues. Profit at the EBITDA level was below our and the market's expectations due to higher marketing costs, repairs & maintenance costs and consolidation adjustment. Nevertheless the company reported a strong EBITDA margin of 47%. A change in the IFRS accounting standards relating to goodwill amortization reduced depreciation & amortization by CZK 177m per quarter. Net income came ahead of our and the market's expectations due to lower net interest payments and higher currency gains.
IFRS consolidated (CZK m)
Q105 Q104 % change Patria expect. Consensus
Sales 14,700 15,030 -2.20% 14,747 14,880
EBITDA 6,981 7,574 -7.83% 7,103 7,140
EBIT 2,283 2,358 -3.18% 2,465 -
Pre-tax income 2,159 1,598 35.11% 1,871 -
Net Income 1,568 1,399 12.08% 1,386 1,470
EPS (CZK, annualized) 19.5 17.4 12.07% 17.2 18.2
Separately, today CT is holding a press conference on its new price programs at 11:00am CET. The Czech Telecommunication Office announced the maximum prices for the regulated tariffs, which include a lower monthly subscription, the removal of the free calling credit and cheaper long distance calls. In addition the ruling lowers the price for local loop unbundling (LLU). The rebalancing of tariffs should be positive for CT.