Portugal Telecom revenues drop 2.3%, net profit down

Once during this year, I was really impressed by one of the PT executives who just before starting a meeting told me: crack, if you are coming to the meeting to show me off charts populated with the data we publish in our site, you can directly go by that door. I was not even sit in the meeting room when he kindly received us with this comment,  (we just wanted to discuss the top 3 strategic issues that we believed were in the top of his mind) but since that day, I apply that insightful comment in most of our presentations.

However, in the management consulting and advisory industry, it’s more than important to be regularly updated on the financial KPIs and performance of the operator to identify, address and suggest strategic solutions to those problems that appear every quarter after the figures speak. We normally follow the top 1st tier operators in the world and although PT is not within this set, I always remember this fruitful meeting and see how are they performing. For those interested, here’s the update on the last quarter.

Portugal Telecom reports revenues of EUR 1.742 billion in the third quarter of this year, decreasing 2.3 percent year-on-year, due to lower MTA fees. At the same time, the EBITDA dropped 2.7 percent to EUR 656.8 million in the third quarter and the net profit dropped by 36.2 percent to EUR 115.9 million, due to lower MTA fees and rising financial and depreciation costs after investment in new networks and equipment.

The capex dropped 7.6 percent to EUR 307 million, but the capex for the first nine months increased by 17.7 percent year-on-year to EUR 812.8 million, due to large investments in FTTH and set-top boxes and modems for Portugal Telecom’s extending base of triple-play customers. For the third quarter, Portugal Telecom reports a free cash flow of EUR 128 million compared with a negative cash flow of EUR 42.1 million in the third quarter of 2008.

The domestic mobile customer base has grown 5.2 percent year-on-year to 7.084 million on 30 September of this year, adding 104,000 during the third quarter. The number of fixed telephony lines decreased 3.8 percent to 2.76 million and ADSL customers grew 19.6 percent year-on-year to 812,000. Portugal Telecom’s IPTV service experienced a huge growth from 211,000 on 30 September 2008 to 505,000 on 30 September of this year.

Best, CVA.

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