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UPDATE 1-Czech Telefonica Q2 net lower, guidance on target
July 25, 2012 / 7:27 AM / 5 years ago

UPDATE 1-Czech Telefonica Q2 net lower, guidance on target

(Adds details from statement, shares)

* Q2 net profit CZK 1.63 bln vs CZK 1.60 in poll

* Revenue decline softer than expected, confirms outlook

* Says has bought 0.54 percent of own stock in buyback

* Shares up 0.6 pct in early trade

PRAGUE, July 25 (Reuters) - Net profit at Telefonica Czech Republic, a unit of Spain’s Telefonica, fell 13 percent to 1.63 billion crowns ($77.2 million) in the second quarter, dragged down by declining revenue in its fixed-line and mobile businesses.

The profit figure just beat the average estimate of 1.60 billion crowns in a Reuters poll of 13 banks and brokerages, while revenue also dipped a touch less than expected to 12.72 billion, down 2.4 percent on the year.

The leading Czech telecom group, with operations also in Slovakia, has struggled to reverse a revenue drop due to weak consumer spending and price pressures from competition.

Operating income before interest, tax, depreciation and amortisation (OIBDA) dropped to 4.91 billion crowns, in line with the Reuters poll, while the guided OIBDA margin was 40.5 percent.

Telefonica CR confirmed guidance for a slight drop in last year’s OIBDA margin of 43.7 percent along with an improvement in the declining revenue trend.

Shares rose 0.6 percent to 386.30 crowns in early trade, outpeforming the wider Prague market.

Telefonica CR said spending in the mobile residential segment had stabilised and reported a lower decline in mobile revenue.

“Consequently, our consolidated business revenues reported improvement for the third consecutive quarter,” Chief Financial Officer Jesus de Uriguen said, adding revenue growth in Slovakia also bolstered earnings.

The company’s shares have been buoyed by a high dividend yield and a stock buyback announced in February. The company said it had bought 0.54 percent of its own stock so far under the programme. (Reporting by Jan Lopatka and Jason Hovet; Editing by David Holmes)

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