Telekom Austria second quarter core profit up

Telekom Austria reported a 1.6 percent rise in second-quarter core profit on August 24, ahead of the average of analysts' forecasts, as strong wireless demand outpaced lower fixed-line revenue.
Austria's dominant fixed-line, wireless and Internet services provider, with a growing business in south-eastern Europe, also said the acquisition of Bulgaria's Mobiltel in July would boost full-year results.
For the second quarter, Telekom Austria made adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 395.8 million euros ($484.3 million), compared with 389.7 million in April-June of 2004.
Analysts had on average forecast EBITDA of 391.0 million euros, according to 18 banks polled by Telekom Austria.
"The wireless side was stronger than we expected," Raiffeisen Centrobank analyst Guenter Hohberger said.
Hohberger said the new full-year forecast, taking account of Bulgaria's Mobiltel, which will be consolidated from July 12, was in line with expectations.
But traders in London said Telekom Austria's figures showed disappointing margins in its fixed-line and mobile businesses.
"The guidance was conservative also," said one dealer.
Telekom Austria shares were down 0.9 percent to 17.15 euros by 0748 GMT, compared with a 0.5 percent decline in the Austrian benchmark index ATX. The shares are up 23 percent this year.
Telekom Austria said net profit for the period more than doubled to 75.7 million euros, helped by lower financing costs and a cut in Austria's corporate taxes, while revenue rose 1.5 percent to 1.01 billion euros.
The acquisition of Mobiltel, Bulgaria's largest mobile service provider, will boost full-year results from an earlier forecast of flat revenue and core profit, Telekom Austria said.
"Adjusted EBITDA is expected to increase by approximately 10 percent, driven by the contribution of the Bulgarian operation," it said, adding that revenue would be up 5 percent from the year before. It also raised the net profit forecast for 2005 to a 50 percent increase from a pre-Mobiltel target of 25 percent.
"The expected decline in revenues in the wireline (fixed line) segment was offset by growth in both domestic and foreign mobile communications operations," Chief Executive Heinz Sundt said in a statement.