July 14, 2020 / 6:13 PM / 23 days ago

A1 Telekom Austria cuts 2020 revenue, investment forecast

FILE PHOTO: The headquarters of Telekom Austria with its brand name A1 is pictured in Vienna, Austria, February 9, 2016. REUTERS/Leonhard Foeger

VIENNA (Reuters) - A1 Telekom Austria (TELA.VI) lowered its 2020 revenue forecast and cut its spending plans for the year after lower roaming income due to coronavirus-related travel restrictions and foreign exchange effects weighed on second-quarter core profit.

The group, which is controlled by Mexico’s America Movil (AMXL.MX) and the Austrian state, said on Tuesday it now expects a 2% decline in full-year revenue after previously forecasting a 1-2% rise from last year’s 4.57 billion euros ($5.21 billion).

It said it will cut initially planned investments of 770 million euros until the end of the year by a quarter.

“As the further effects of COVID-19 are difficult to predict, precautionary cuts in capital expenditure and operating expenses will help to further secure flexibility,” Chief Operating Officer Alejandro Plater said in a statement.

The new investment plan does not include investments in new spectrum for 5G applications and potential acquisitions.

A1 Telekom Austria, which operates in six eastern European countries besides its home market, said revenue decreased 2.4% to 1.1 billion euros in the second quarter mainly due to lower roaming income and the devaluation of the Belarus currency. The group booked negative foreign exchange effects of 16.4 million euros.

Earnings before interest, tax, depreciation and amortisation were 0.5% lower at 390.1 million euros in the period.

The group will publish its second-quarter report on July 21.

Reporting by Kirsti Knolle; editing by Emelia Sithole-Matarise

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