Cesky Telecom - results of Eurotel beat our expectations of net profit and EBITDA levels

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Investiční bankovnictví KB

      The biggest mobile operator Eurotel announced its financial results for 1Q according to US GAAP. Sales growth to CZK 6.8bn was in line with our expectations. EBITDA and net profit was better due to seasonal improvement of margins. EBITDA increased from CZK 3.3bn to CZK 3.5bn and net profit grew from CZK 1.5bn to CZK 1.6bn.

       Slowdown of revenue growth is in line with our expectations and reflects current situation on the Czech mobile market. The market is saturated, subscriber additions will not be impressive. Introduction of new services and their perception among clients will be important for future revenue growth. From this point of view is positive the increase of shares of SMS and other value added services on total sales, which show steady growing trend. We explain better net profit and EBITDA to seasonal development of costs. Margins should deteriorate in the coming quarters, EBITDA margin will not remain above 50%.

      

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