Portugal Telecom saw its first-quarter revenues decrease 3.9 percent year-on-year to EUR 871 million, Following the Vivo transaction on 27 September 2010, PT adjusted its 2010 financial statements in order to recognize Vivo as a discontinued operation and, following the acquisition on 28 March 2011 of a 25.3 percent stake in Oi and a 14.1 percent stake in Contax, PT’s statement of financial position as at 31 March 2011 proportionally consolidates the assets and liabilities of these stakes. EBITDA also declined by 5.2 percent to EUR 357.4 million, with EBITDA margin at 41 percent. Net income jumped 29.3 percent year-on-year to EUR 129.7 million, while basic earnings per share reached EUR 0.15. Capex plunged 25 percent to EUR 122.2 million, equivalent to 14 percent of revenues and was primarily directed to the investment in the rollout of new technologies and services, namely the FTTH network and TV service and to investments in 3G and 3.5G. Operating cash flow stood at EUR 315 million. Adjusting for the acquisition of PT’s investment in Oi and Contax, free cash flow stood at EUR 453 million. As at 31 March 2011, excluding the impacts resulting from the strategic investment in Oi and Contax, net debt would have amounted to EUR 1.6 billion. Following the strategic investment in Oi and Contax and the proportional consolidation of its net debt position and the transfer of regulatory unfunded pension obligations to the Portuguese State last December, consolidated net debt stood at EUR 7.4 billion as at 31 March 2011.
In Q1, wireline operating revenues decreased by 6.6 percent year-on-year to EUR 456 million. Wireline EBITDA was nearly flat year-on-year at EUR 188 million in Q1. Retail net additions reached 52,000, driven by PT’s pay-TV and triple-play offers, which are contributing to steady and consecutive gains in broadband market share and record reduction in fixed telephone line net disconnections. The company said. Pay-TV accounted for 46,000 net additions, bringing the total pay-TV customers to 876,000. Fiber customers reached 147,000 at end-March. Traffic generating lines declined only by 4,000 in Q1, underpinned by fixed line net additions of 6,000 in the residential segment. In the quarter, net disconnections of voice lines were 12,000, including the 9,000 net disconnections of carrier pre-selection lines. The number of retail RGUs per access line, measured by the number of retail accesses per PSTN/ISDN line, continued to increase with the roll-out of the pay-TV offer and stood at 1.71 in Q1.
TMN’s operating revenues fell 12.4 percent year-on-year to EUR 303 million, mainly due to lower customer revenues (EUR 27 million), lower interconnection revenues (EUR 11 million), and lower equipment sales (EUR 5 million). Data revenues accounted for 26.9 percent of service revenues, up by 3.6 percent year-on-year. In Q1, TMN’s EBITDA decreased by 5.2 percent to EUR 357 million, equivalent to a margin of 47.5 percent. TMN’s total customer base increased by 2.1 percent year-on-year to 7.414 million, with quarterly net additions of 14,000 for postpaid customers and net losses of 19,000 for prepaid customers.
