The Telekom Austria Group reports revenues of EUR 1.17 billion for the fourth quarter of 2010, down 0.9 percent year-on-year. An increase in equipment revenues, especially in Austria due to increasing smartphone sales, and growing revenues in Belarus and additional markets such as Slovenia, Serbia and Macedonia mitigated the impact of lower revenues from Austria, Bulgaria and Croatia as a consequence of the competitive environment, regulatory cuts and ongoing economic headwinds. The quarterly EBITDA, excluding restructuring and impairment charges, dropped 15.2 percent year-on-year to EUR 353.4 million, driven by lower results from Austria, Bulgaria, Croatia and Belarus. Material and marketing expenses rose due to strong demand for smartphones during the Christmas season, and Belarus saw a decline in results due to inventory write-offs and higher employee costs, the operator said. The group reported an operating loss of EUR 38.5 million for the fourth quarter, compared with an operating profit of EUR 120 million in 2009. The decrease was caused by a EUR 98.0 million restructuring charge in the Austrian segment, compared to EUR 17.5 million in the fourth quarter of 2009. The operator also took an impairment charge of EUR 18.3 million in the Austrian segment. This lead to a net loss of EUR 61.3 million, compared with a net profit of EUR 63.6 million for the same period in 2009. The group's capex increased by 9.8 percent year-on-year to EUR 320.2 million, as investments in the next-generation network in Austria increased. Telekom Austria's total mobile customer base grew by 4.7 percent year-on-year to 19.88 million on 31 December 2010.
For the financial year 2011, revenues are expected to amount to up to EUR 4.6 billion. Focus on cost control will mitigate the impact from lower revenues and is anticipated to result in EBITDA comparable to last year of up to EUR 1.60 billion, excluding any impairment and restructuring charges. Capital expenditures of the Telekom Austria Group are forecast to reach up to EUR 800 million and do not include investments for licence or spectrum acquisitions. Operating free cash flow remains the primary focus of management and is expected to amount to approximately EUR 800 million. Following the update of its cash use policy at the last Capital Market Day in December 2010, the Telekom Austria Group intends to distribute 55 percent of free cash flow to its shareholders as dividends. For the years 2011 and 2012, a minimum dividend of EUR 0.76 per share has been put in place.
