OTE profit fall makes a softer-than-expected landing

OTE Telecom yesterday beat consensus forecasts with an 8 percent drop in first-half consolidated net profit, reflecting lower provisions for a personnel reduction plan. OTE reported a net profit of 229.3 million euros, compared to analysts expectations of a 16.3 percent drop to 208.5 million euros in a recent Reuters poll, due to higher depreciation and reduced revenues from its fixed line business. OTE, which reported under US GAAP, said group net income in the second quarter rose 7.0 percent year on year to 116.2 million euros. Earnings before interest, tax, depreciation and amortization (EBITDA) rose 10.4 percent to 923.9 million euros. OTE said it expected full-year EBITDA, excluding majority owned Romtelecom, to remain at 2002 levels, with the EBITDA margin for the Romanian subsidiary’s fixed-line operations seen above 30 percent.