OTE Telecom core profit down 2.6 percent, Romania hurts

Greece’s biggest telecoms operator OTE expects a double-digit percentage rise in cash flows this year as recovery in Greece takes hold and its Romania business stabilises.

The former national monopoly, which is 45 percent owned and managed by Germany’s Deutsche Telekom, on Thursday posted a 2.6 percent drop in fourth-quarter core profit at 325.2 million euros ($369.30 million).

Weakness in Romania outweighed growth in its home market. However, the group forecast free cash flow will reach about 350 million euros this year, up 31 percent.

OTE said it will benefit from investments in advanced fixed and mobile telephony networks and stabilising revenue in Romania following one-off provisions and restructuring plans.

Strong cash flow will raise payouts to shareholders, it said. OTE will pay a dividend of 0.46 euros per share on 2018 profit, up 31 percent rise compared to a year earlier.

Heavy spending on new high-speed VDSL broadband services and a fast growing pay-TV business in Greece, where it generates about 90 percent of its core profit, have helped the group win back fixed-line customers.

After implementing several voluntary redundancy schemes in past years, OTE said it is “systematically” exploring cost-reduction initiatives to boost profits across its businesses.

[Reuters]