Cesky Telecom will release selected preliminary IAS results on Monday, February 26, at noon. Detailed IAS results in the standard format will be released on March 29.
Cesky Telecom, consolidated, IAS preliminary results February 26, noon
CZK mil. Reuters cons. 2000E Patria 2000E 1999 change
Sales 56,460 55,979& 51,902 7,9%
EBITDA 27,290 27,170 25,732 5,6%
EBIT 12,350 12,464 12,323 1,1%
Pretax income 9,440 9,075 8,442 7,5%
Net income 6,600 6,307 6,171 2,2%
Market forecasts as well as our own projections anticipate a further slowdown in sales growth, as falling fixed-line call revenues (-7%, we expect) dampen the overall top-line growth. We expect weaker EBITDA margin (projected at 48.5% in 2000 vs. 49.6% in 1999) reflecting, among others, expected higher customer acquisition costs at EuroTel and higher costs associated with expanding Cesky Telecom’s Internet business. This implies a weaker EBITDA growth (5.6% in 2000 vs. 15.9% in 1999). In fact, our projections imply a 1.4% q/q decline in EBITDA in Q4, the market consensus implies flat EBITDA q/q. We are 5% below the market consensus in case of after-tax earnings.
It therefore seems that a relatively unexciting fourth-quarter performance is now built into market expectations, and we are slightly more bearish than the market. Given the general sentiment on telecoms, a positive surprise may not have much impact but a negative surprise could put the stock under pressure.