Cesky Telecom's results beat expectations, but did not bring any surprises

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Investiční bankovnictví KB

      Cesky Telecom announced its results for 1-3Q02, which showed a decline of y/y basis, but beat our as well as market expectations. Revenues went down by 6% to CZK 39.4bn mainly due to further decline in call revenues, interconnection revenues and connection charges. Nevertheless, the decline of top line was again successfully balanced with operating cost cuts. Payments to other network operators showed the steepest decline mainly due to outflow of traffic to mobile networks and regulatory price decrease. Cesky Telecom managed to improve its EBITDA by 2% to CZK 20.1bn, while EBITDA margin rose to 51%. Lower financial leverage (19%) and lower interest rates caused reduction of interest costs and revenues. Thanks to that, net profit marginally decreased by 1% to CZK 3.9bn.

       We rate the company’s results as neutral. Although Cesky Telecom beat market expectations, the figures did not bring any surprises. The factors that influenced the results were in line with our estimates.

      

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