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Telekom Austria AG / Trading Statement for the 2nd Quarter and the 1st Half of 2017

Published: July 18, 2017; 19:00 · (FriedlNews)

Today, the Telekom Austria Group (VSE: TKA, OTC US: TKAGY) announces its highlights for the second quarter and the first half of 2017(1), ending 30 June 2017. The full earnings release including the results for the second quarter and the first half of 2017 will be published on 25 July 2017.

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Vienna - 18 July 2017 - Today, the Telekom Austria Group (VSE: TKA, OTC US:
TKAGY) announces its highlights for the second quarter and the first half of
2017(1), ending 30 June 2017. The full earnings release including the results
for the second quarter and the first half of 2017 will be published on 25 July
2017.

Group Review

The following analysis is presented on a proforma(2) basis if not stated
otherwise.

Key performance
indicators
Proforma view
in EUR million Q2 2017 Q2 2016 % change 1-6 M 2017 1-6 M 2016 % change
reported proforma reported proforma
Total revenues 1,082.9 1,041.2 4.0 2,141.9 2,058.7 4.0
thereof total 966.4 939.8 2.8 1,922.5 1.861.3 3.3
service revenues*)
Wireless revenues 663.2 646.9 2.5 1,307.2 1,275.8 2.5
thereof service 536.1 531.9 0.8 1,060.2 1,051.7 0.8
revenues
thereof equipment 105.2 94.3 11.6 201.8 184.2 9.6
revenues
Fixed-line and other 419.7 394.3 6.5 834.6 783.0 6.6
revenues
EBITDA 359.3 333.3 7.8 698.9 670.7 4.2
% total revenues 33.2% 32.0% 32.6% 32.6%
EBIT 146.5 116.4 25.8 272.9 235.9 15.7
% total revenues 13.5% 11.2% 12.7% 11.5%

Wireless indicators Q2 2017 Q2 2016 % change 1-6 M 2017 1-6 M 2016 % change

reported proforma reported proforma
Wireless subscribers 20,677.0 20,481.8 1.0 20,677.0 20,481.8 1.0
(thousands)
Postpaid 15,140.2 14,845.2 2.0 15,140.2 14,845.2 2.0
Prepaid 5,536.8 5,636.6 - 1.8 5,536.8 5,636.6 - 1.8
MoU (per Ø 307.0 309.0 - 0.6 304.7 303.7 0.3
subscriber)
ARPU (EUR) 8.7 8.7 0.0 8.6 8.5 0.4
Churn (%) 1.9% 1.8% 1.9% 1.9%

Wireline indicators Q2 2017 Q2 2016 % change 1-6 M 2017 1-6 M 2016 % change

reported proforma reported proforma
RGUs 5,899.0 5,902.6 - 0.1 5,899.0 5,902.6 - 0.1

*) Including other operating income All financial figures are based on IFRS; if
not stated otherwise, all comparisons are given year-on-year. EBITDA is defined
as net income excluding financial result, income taxes, depreciation and
amortisation and impairment charges.

(1)The highlights for the second quarter and the first half of 2017 are
published in line with the reporting date of our parent company América Móvil,
S.A.B. de C.V. The detailed information will be published on 25 July 2017.
(2)Proforma figures include effects of M&A transactions executed between the
start of the comparison period and the end of the reporting period.

Highlights for the second quarter of 2017

* Group total revenues increased by 4.0% (reported: +5.1%), with service
revenue growth in all markets except from the Republic of Serbia and the
Republic of Macedonia.
* Group EBITDA growth of 7.8% (reported: 9.1%) mainly due to growth in Belarus,
Austria, Bulgaria, Croatia and the Republic of Macedonia.
* Negative effects from the stepwise abolition of retail roaming in the EU came
in slightly lower than expected in Q2 2017, while the expected losses for the
second half of the year remain the same.
* EBITDA growth in Austria was supported by some project-driven revenue
contributions which cannot be extrapolated for the rest of the financial year
2017 as well as some non-cash relevant items.
* Total positive FX effects amounted to EUR 8.9 mn for total revenues and EUR
4.2 mn for EBITDA in Q2 2017, stemming almost entirely from Belarus.
* Reported net result increased by 36.5% in the second quarter of 2017 from EUR
82.4 mn to EUR 112.5 mn.
* Results on a reported basis were supported by:

o The acquisition of the fixed-line operator Metronet in Croatia, which was
closed on 15 February 2017. The company has been consolidated as of 1 February
2017. o The acquisition of the fixed-line provider Atlant Telecom and its
subsidiary TeleSet in Belarus, consolidated as of 1 December 2016.

* There were no one-off effects included in the second quarter of 2016 and
2017.

In the second quarter of 2017, Telekom Austria Group saw an increase in the
mobile subscriber base of 1.0% in a year-on-year comparison, coming mainly from
M2M subscribers and the Republic of Serbia as well as growth in Croatia and
Bulgaria, while the subscriber numbers in Belarus and the Republic of Macedonia
declined. In Austria mobile subscribers decreased by 1.4% in the second quarter
of 2017. Almost all CEE markets saw a shift from prepaid to postpaid offers.
The number of revenue generating units (RGUs) of the Group was almost stable
(-0.1% year-on-year; reported: +5.2%). The decline in RGUs in Austria and
Bulgaria driven by voice RGUs was fully offset by increases in all other
markets.

Group total revenues increased by 4.0% year-on-year (reported: +5.1%).
Excluding FX effects amounting to positive EUR 8.9 mn in the second quarter
2017, Group total revenues increased by 3.2% year-on-year (reported: +4.2%).
Negative effects stemming from the stepwise abolition of retail roaming in the
EU as of 30 April 2016 and 15 June 2017 came in slightly lower than expected
and derive mostly from Austria, with further impacts in Slovenia and Bulgaria.
The deviations do not affect the expectation of roaming losses for the second
half of the year which remains the same.

Total revenues in the Austrian segment increased by 2.5% year-on-year in the
second quarter of 2017. Higher fixed-line and other revenues rose partly due to
project-driven contributions from solutions and connectivity as well as higher
interconnection revenues which outweighed losses in wireless service revenues.
The latter were driven by the negative effects on customer roaming due to the
above mentioned abolition of retail roaming as well as losses in the prepaid
segment.

In the Bulgarian segment, total revenues increased by 3.4% in a year-on-year
comparison, due to higher equipment revenues as well as a slight increase in
service revenues. Total revenues in the Croatian segment rose by 2.9% year-on-
year (reported: +10.1%) and continued to profit from the ongoing solid
performance in the mobile and continuing growth in the fixed-line business.
Total revenues in the Belarusian segment increased by 27.6% year-on-year
(reported: +33.9%), driven by continuing solid operational growth and an
improving FX environment. Excluding the positive FX impact of EUR 7.7 mn, total
revenues in Belarus rose by 18.0% year-on-year (reported: 23.8%).

In the Slovenian segment, total revenues rose by 2.5% year-on-year in the
second quarter of 2017 due to the increases in equipment and in fixed-line
service revenues while competition in the mobile segment remained fierce. Total
revenues in the Serbian segment rose by 2.8% year-on-year, as higher equipment
sales more than offset the decline in mobile service revenues. In the Republic
of Macedonia, total revenues came in 3.8% lower year-on-year mainly due to a
decline in interconnection revenues in both the mobile and the fixed-line
business.

Group total costs and expenses rose by 2.2% year-on-year to EUR 723.6 mn in the
second quarter of 2017 (reported: +3.2%) due to increases in all markets but
the Republic of Macedonia.

Group EBITDA grew by 7.8% year-on-year to EUR 359.3 mn in the second quarter of
2017 (reported: +9.1%) with positive contributions from Belarus, Austria,
Bulgaria, Croatia, and the Republic of Macedonia. Excluding FX effects
amounting to positive EUR 4.2 mn in the second quarter 2017, Group EBITDA
increased by 6.6% year-on-year (reported: +7.9%).

In Austria, EBITDA growth of 4.8% was driven by fixed-line and other revenues
as well as reduced subsidies and lower workforce costs. The project-driven
contribution on EBITDA growth can not be extrapolated for the rest of the
financial year 2017. Additionally, EBITDA benefitted from some non-cash
relevant items, namely reversals of accruals and effects which led to a better
equipment margin.

In Bulgaria, EBITDA rose by 8.6% due to the slight growth in total service
revenues and an improved equipment margin as well as due to costs efficiencies.

Higher service revenues in Croatia more than compensated for the increase in
costs resulting from intensified sales initiatives as well costs related to the
growth in RGUs. This led to an increase in EBITDA of 7.7% year-on-year
(reported: +23.0%).

In Belarus, a solid operational performance together with a positive FX impact
resulted in a 44.9% higher EBITDA compared to Q2 2016 (reported: +49.4%).
Excluding the positive FX impact of EUR 3.9 mn, EBITDA in Belarus rose by 34.1%
year-on-year (reported: 38.2%).

In Slovenia, EBITDA declined by 19.0% as higher equipment costs and costs from
rebranding activities more than offset higher revenues. The EBITDA in the
Republic of Serbia declined by 4.3% year-on-year as the rise in revenues driven
by equipment revenues was more than offset by increased costs related to the
repositioning of the company as well as additional sales initiatives. In the
Republic of Macedonia, the equipment margin improvement and cost efficiencies
drove the EBITDA growth of 19.5% year-on-year.

Depreciation and amortisation decreased by 1.9% to EUR 212.8 mn in the second
quarter of 2017 (reported: -0.9%), mainly due to FX-driven lower D&A in Belarus
in Q2 2017 and M&A-driven higher D&A in the Republic of Macedonia in Q2 2016.
Altogether, this led to a growth in operating income of 25.8% year-on-year
(reported: +27.9%) to EUR 146.5 mn.

The reported financial result amounted to a negative EUR 23.4 mn in Q2 2017
compared to a negative EUR 22.3 mn in the same period last year. Reported
income taxes amounted to EUR 10.6 mn in Q2 2017 compared to EUR 9.8 mn in Q2
2016. In summary, this resulted in a reported net result of EUR 112.5 mn in the
second quarter of 2017 compared to EUR 82.4 mn in Q2 2016.

Capital expenditures declined by 17.0% year-on-year to EUR 171.3 mn in the
second quarter 2017, while they rose by 3.1% to EUR 351.3 mn in the first half
of 2017.

Highlights for the first half of 2017

* Group total revenues increased by 4.0% (reported: +5.0%), with service
revenue growth in Austria, Croatia, Belarus and Slovenia.
* Group EBITDA growth of 4.2% (reported: +5.3%) mainly due to growth in
Belarus, Austria, Croatia and the Republic of Macedonia.
* Negative effects from the stepwise abolition of retail roaming in the EU came
in slightly lower than expected in the first half of 2017, while the expected
losses for the second half of the year remain the same.
* Total positive FX effects amounted to EUR 20.7 mn for total revenues and EUR
9.7 mn for EBITDA in the first half of 2017, stemming almost entirely from
Belarus.
* Results on a reported basis were supported by:

o The acquisition of the fixed-line operator Metronet in Croatia, which was
closed on 15 February 2017. The company has been consolidated as of 1 February
2017. o The acquisition of the fixed-line provider Atlant Telecom and its
subsidiary TeleSet in Belarus, consolidated as of 1 December 2016.

* Reported net result increased by 27.9% in the first half of 2017 from EUR
163.4 mn to EUR 208.9 mn.
Further inquiry note:
Susanne Reindl
Head of Investor Relations
Telekom Austria Group
Tel.: +43 (0) 50 664 39420
E-mail: susanne.reindl@telekomaustria.com

end of announcement euro adhoc
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Attachments with Announcement:

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http://resources.euroadhoc.com/documents/287/5/10029929/1/TKA_Q2_2017_Trading_Statement.pdf

issuer: Telekom Austria AG Lassallestrasse 9 A-1020 Wien
phone: 06646636587
mail: investor.relations@telekomaustria.com
WWW: www.telekomaustria.com/ir
ISIN: AT0000720008
indexes: WBI, ATX
stockmarkets: Wien
language: English

Digital press kit: http://www.ots.at/pressemappe/2161/aom

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