The Mobile Communication segment continued to show subscriber growth both in Austria and in its international markets. Austria is regarded as a highly developed mobile communications market characterized by fierce competition. Bulgaria, Croatia and Slovenia still offer untapped potential in terms of contract customers and innovative data products, however, fierce competition and the economic slowdown in these markets led to price cuts and declining ARPUs. The impact of the economic crisis in the consumer segment of our Eastern and South-Eastern operations in Bulgaria, Croatia, Slovenia and Belarus is limited. The impact is predominantly apparent in the business segment.
Velcom in Belarus was impacted by continuing devaluation of the Belarusian Ruble. Since the beginning of the year the Belarusian Ruble has devaluated by 29.3% against the Euro. The counter-measures adopted to mitigate the negative impact include a tariff increase effective as of mid-February 2009 as well as a rebalancing of costs based on the local currency. A segment-wide risk monitoring system has been put in place to identify risk factors such as currency fluctuations or long-term macro-economic trends in order to react in due time. Regulation remains an important external disrupting factor in all markets primarily impacting roaming tariffs and termination charges.
Update on Share Buyback Program
As announced at the Capital Market Day in January 2009, Telekom Austria Group evaluated the potential for a share buyback. Although financial markets make financing available, the operating performance in South- and Eastern Europe is subject to uncertainties and the risk of currency devaluations still remains. Nevertheless, the Telekom Austria Group envisages in accordance with the capital allocation policy to start share buybacks in 2010 depending on the normalization of business, stable currencies and provided no investment with a higher return is available. About 1/3 of free cash flow after dividends is available for a potential share buyback. The rest remains as a reserve.
Outlook 2009 Reiterated
As announced in May 2009 and based on a constant currency assumption, the Telekom Austria Group anticipates slightly weaker revenues than originally expected for the year 2009 due to lower Fixed Net wholesale revenues as well as lower Mobile Communication interconnection and equipment revenues, which will be accompanied by a proportionate reduction in costs. Therefore, on a constant currency basis EBITDA guidance remains unchanged at about EUR 1.9 billion in 2009. Capital expenditures for the year 2009 are expected to amount to approximately EUR 800 million, which will result into an operating free cash flow (EBITDA less capital expenditures) of around EUR 1.1 billion. The Telekom Austria Group expects to distribute 65% of net income in form of dividends at a minimum floor of 75 cent per share.
Outlook 09 Outlook 09 Outlook 09
as of as of May as of Feb. Outlook 09
August 19 13 25 as of Jan. 29
Telekom
Austria Group
Revenues Slightly Slightly EUR 5.1bn EUR 5.1bn
weaker than weaker than
originally originally
expected expected
EBITDA EUR 1.9bn EUR 1.9bn EUR 1.9bn EUR 1.9bn
Capital
expenditures EUR 0.8bn EUR 0.8bn EUR 0.8bn EUR 0.8bn
Operating
Free Cash
Flow EUR 1.1bn EUR 1.1bn EUR 1.1bn EUR 1.1bn
Dividend 65% of net 65% of net 65% of net 65% of net
income, DPS income, DPS income, DPS income, DPS
of 75 cent of 75 cent of 75 cent of 75 cent
minimum minimum minimum minimum
Outlook based on constant currency basis as announced on the
Capital Market Day in January 2009
Further Information
For more detailed information about the half year results 2009 please refer to the corresponding report on Telekom Austria Group's website at http://www.telekomaustria.com/interim_re...
Disclaimer: This news release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements are usually accompanied by words such as "believe," "intend," "anticipate," "plan," "expect" and similar expressions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement. These factors include, but are not limited to, the following:
- the level of demand for telecommunications services or equipment,
particularly with regard to access lines, traffic, bandwidth and new
products;
- competitive forces in liberalized markets, including pricing pressures,
technological developments, alternative routing developments and new
access technologies, and our ability to retain market share in the face
of competition from existing and new market entrants;
- the effects of our tariff reduction or other marketing initiatives;
- the regulatory developments and changes, including the levels of
tariffs, the terms of interconnection, unbundling of access lines and
international settlement arrangements;
- our ability to achieve cost savings and realize productivity
improvements;
- the success of new business, operating and financial initiatives, many
of which involve start-up costs, and new systems and applications,
particularly with regard to the integration of service offerings;
- our ability to secure the licenses we need to offer new services and
the cost of these licenses and related network infrastructure build-outs;
- the progress of our domestic and international investments, joint
ventures and alliances
- the impact of our new business strategies and transformation program;
- the availability, terms and deployment of capital and the impact of
regulatory and competitive developments on capital expenditure;
- the outcome of litigation in which we are involved;
- the level of demand in the market for our shares which can affect our
business strategies;
- changes in the law including regulatory, civil servants and social
security law, including pensions and tax law; and general economic
conditions, government and regulatory policies, and business conditions
in the markets we serve.
- Through its expansion into the Eastern and South-eastern European
region, the company operates in markets that have been experiencing
political and economic change. This circumstance has affected, and may
continue to affect, the activities of enterprises operating in this
environment. Consequently, operations in the Eastern and South-eastern
European region involve uncertainties, including tax uncertainties that
typically do not exist in other markets.
Contacts:
Elisabeth Mattes
Group Spokeswoman
Tel.: +43-664-331-2730
E-Mail: elisabeth.mattes@telekom.at
Peter Zydek
Head of Investor Relations
Tel.: +43(0)59059-1-19000
E-Mail: peter.zydek@telekom.at
Contacts: Elisabeth Mattes, Group Spokeswoman, Tel.: +43-664-331-2730, E-Mail: elisabeth.mattes@telekom.at. Peter Zydek, Head of Investor Relations, Tel.: +43(0)59059-1-19000, E-Mail: peter.zydek@telekom.at
