Belgium's dominant telecom operator, Belgacom, on Friday reported a bigger-than-expected 5 percent drop in core profit and repeated its forecast for 2009. First-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) fell to 492 million euros ($666.9 million), against the average expectation of 502 million euros in a Reuters poll of 12 analysts.
"All in all we are categorising these results as below expectations because of the feeble EBITDA," Bank Degroof analyst Siddy Jobe said in a note to clients. At 0724 GMT, Belgacom shares were up 1 percent at 22.14 euros, against a 0.6 percent rise for the wider Bel20 index.
The group said in a statement that its enterprise business unit, which sells IT services to businesses, saw the impact of the economic crisis mainly in the slowdown of mobile usage, especially in roaming.
Many customers introduced travel bans and reduced their mobile usage, the group said, wiping out the positive impact of 30,000 new mobile customers in the first quarter. The unit's ICT business was also feeling the effects of the slowdown, with contract negotiations taking longer, Belgacom said. First-quarter revenues were down 5.2 percent for the unit.
The group is not the only telecoms company to feel the effect of the economic slowdown in its corporate segment. British telecoms carrier BT on Thursday announced a 1.58 billion euro writedown to be taken at its Global Services unit, which also supplies IT services to companies.
Belgacom's consumer business unit had not been hit significantly by the weakening economic climate, but consumers were increasingly looking for cheap mobile deals including free minutes and free text messages, Belgacom said. The unit saw revenue growth of 8 percent in the first quarter, but added only 10,000 new mobile customers between January and March, compared with 65,000 in the same period in 2008.
"The weak mobile subscriber evolution in the consumer business division does not bode well for the remaining part of 2009, especially with (cable company) Telenet preparing to enter the mobile area," Jobe added. The former state monopoly repeated that its EBITDA margin would be 32-33 percent in 2009, from 33.3 percent in 2008, and that it expected revenues to drop by around 1 percent this year.