Belgacom first-half mobile phone business beats forecasts

Shares in Belgacom jumped 4 percent on Friday after the Belgian telecom operator reported better-than-expected results in its mobile phone unit, Proximus, which is facing stiff competition. Proximus had warned on sales and profits in May in the face of strong rivalry from other mobile phone operators.
Overall group earnings before interest, tax, depreciation and amortisation (EBITDA), excluding one-off items, fell 4 percent to 1.153 billion euros, compared with the average 1.15 billion euros estimated by analysts in a Reuters poll.
Including non-recurring items, EBITDA rose 12.7 percent to 1.392 billion euros. Net profit rose 54.3 percent to 780 million euros, helped by a 238 million euro gain on the sale of a unit.
Faced with a declining market share, Belgacom has been offering new services and promotions to win back customers from the likes of Sweden's Tele2, including digital television, launched last month.
It said it was sticking to its outlook for its traditional fixed-line business of a decline in revenues of up to 3 percent, winning back 109,840 customers during the first half.
Unit revenues fell 4.5 percent in the first half.
It also launched its digital television platform in June in an effort to protect its market share, for which it has reaped 4,000 customers already. "It is clear that the company has built up a solid safety cushion in the company ... These results should take away the hesitation to invest in the company," KBC Securities analyst Dirk Saelens said in a research note.
He raised his rating to "outperform" from "neutral".
Belgacom reiterated its lowered forecast of mobile phone net service revenues dropping by as much as 4 percent this year - down 1.3 percent in the first half - and EBITDA margin falling to 47 percent, compared to 47.1 percent in the first half.
The lowered profit and sales forecast had taken a heavy toll on Belgacom's stock price, which is still well below a 33.70-euro high reached in April.
But Proximus was able to slow the declining trend in the second quarter, Belgacom said, adding that the number of active customers increased by 16,173 over the past six months.
Overall revenues in the unit fell 2.1 percent, while KBC's Saelens had expected a 3.6 percent drop and 50,000 fewer customers.