Telekom Austria Group has reported a net loss of over EUR 300 million in first-half 2014 due to an impairment charge to write down assets in Eastern Europe. The charge of EUR 400 million for Mobiltel in Bulgaria resulted in a negative net result of EUR 317.8 million at the Group level. Group revenues declined 7.3 percent year-on-year to EUR 1.94 billion, due to weak revenues in Austria, Bulgaria and Croatia.
The total number of fixed access lines group-wide reached 2.64 million at end-June 2014, up 0.7 percent from 2.62 million a year earlier, with broadband lines accounting for 1.69 million, up 5.7 percent. Group mobile subscribers fell to 19.88 million, down 0.8 percent from a year earlier, with mobile broadband subscribers accounting for 1.50 million, down from 1.51 million.
EBITDA comparable for H1 2014 was EUR 619.4 million, down 7.2 percent from a year earlier, and the EBIT loss was EUR 222.6 million, compared to a positive EBIT of EUR 223.3 million in H1 2013. Telekom Austria increased capex 1.1 percent year-on-year to EUR 329.0 million, while operating cash flow was down 24.4 percent to EUR 224.5 million. The operator's net debt was little changed compared to six months earlier at EUR 3.69 billion, while the leverage increased slightly to 3.0 times annual EBITDA.
The difficult economic conditions in eastern Europe and ongoing price pressure in Austria led the operator to downgrade its outlook for the full year. It now expects revenues down around 3.5 percent, versus an earlier outlook or 3.0 percent lower, and the capex budget was lowered to EUR 650-700 million from EUR 700 million previously. Telekom still targets a divided of 5 cents a share this year and around EUR 100 million in opex and capex savings to offset the continued pressure on revenue.
In Austria, total fixed access lines were stable year-on-year at 2.27 million, while the mobile subscriber base was down 4.8 percent to 5.51 million. Compared to March, A1 lost 136,500 mobile customers, while ARPU improved to EUR 16.2 from EUR 15.2 following price increases in the market. Mobile broadband subscribers fell to 744,000 from 788,000 three months earlier. Retail fixed broadband subscribers rose by almost 11,000 in three months to 1.39 million, and TV subscribers were up slightly in the period to almost 242,000. Total revenues in Austria still fell by 11 percent year-on-year to EUR 1.19 billion, and EBITDA for the Austrian business was down 7.3 percent to EUR 367.1 million.
