Telekom Slovenije Saw 268% Rise in Net Profit for 2018

By , 28 Mar 2019, 16:18 PM Business
Telekom Slovenije Saw 268% Rise in Net Profit for 2018 telekom.si

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STA, 28 March 2019 - Telekom Slovenije, the state-owned telecoms incumbent, posted a group net profit of EUR 33.3m for 2018, an increase of 269% over the year before, even as revenue stagnated to stand at EUR 715m, three percent below plans, show results released on Thursday.

Earnings before income tax, depreciation and amortisation (EBITDA) totalled 185.5m, up 10% over the year before, and pre-tax profit (EBIT) rose almost three-fold to EUR 18m.

Both EBITDA and net profit were affected by the settlement of a large claim by rival telecoms provider T-2.

The settlement amount has never been disclosed, but the business newspaper Finance says figures from the annual report suggest it amounted to roughly EUR 50m and in effect reduced profit by EUR 25m since the company did not have sufficient provisions to cover the entire amount.

The company said it had increased revenue from fixed-line and IT services by 8%, with revenue from the sale of energy and insurance services also rising.

These new revenue streams have helped offset declining revenue from mobile users and users of fixed-line telephony, the report shows.

The Slovenian parent company accounted for the bulk of the sales, which at EUR 637.7m, were down a percent over 2017. Net profit stood at EUR 34m compared to EUR 1.7m in the year before.

Chairman Rudolf Skobe said the company has entered the second phase of transformation in 2018 and, having previously focused on innovation in its core business, would now strive to create value with digitalisation.

Telekom earmarked EUR 134m for investments last year, the bulk of the money spent on expansion of the fibre optic and mobile networks.

For 2019 the company projects worse results, as operating revenue is slated to top out at EUR 712m and profit is projected to decline by a tenth to just over EUR 30m.

Investments, meanwhile, are planned at EUR 212m.

The management and supervisory boards have proposed that dividends for last year be set at EUR 4.5 gross per share, which would mean shareholders would get just shy of EUR 30m.

However, the final payout may be completely different: last year the management proposed dividends of EUR 6.30 per share, but shareholders ended up endorsing a proposal by Slovenian Sovereign Holding for a payout of EUR 14.3 gross per share.

The Telekom share lost 0.3% in early trading on the Ljubljana Stock Exchange today, to trade at roughly EUR 65.

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