Telekom Austria Drops into Quarterly Loss

Telekom Austria Group has reported a 7.3% drop in its 3rd-quarter revenues compared to a year ago to EUR 1.23 billion (US$1.85 billion). Operating income in 3Q 09 fell by EUR 386.4 million to an operating loss of EUR 126.4 million.

The company recorded a net loss of EUR 136.3 million (US$204.5 million), down by EUR 299.2 million compared to a year ago.

These decreases are due to impairment charges of EUR 352 million related to the goodwill for the acquisition in Velcom in Belarus and the license of Vip mobile in the Republic of Serbia. Excluding the impairment charges operating income declined by 13.2% to EUR 225.6 million due to a lower contribution from the Mobile Communication segment, the operating income in the Fixed Net segment grew by 11.2% as a result of lower depreciation and amortization charges. Excluding impairment charges net income was EUR 122.7 million in 3Q 09 compared to EUR 162.9 million in 3Q 08.

As a result of a restrictive investment policy capital expenditures decreased by 16.0% from EUR 184.0 million to EUR 154.5 million as lower capital expenditures in the Mobile Communication segment partly offsetting an increase in the Fixed Net.

Looking ahead, the management does not expect a near term recovery of the macro-economic environment in Eastern and South-Eastern Europe and consequently expects the difficult market environment to prevail also in 2010.


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