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Telekom Austria on Wednesday reported a 53 per cent increase in first half net profits as income from the newly-acquired MobilTel rolled in and subscription number for its broadband service rose.

The group, which bought MobilTel, Bulgaria’s largest mobile phone company, in a €1.6bn deal last year, said net income surged €284.9m on the back of a 15.9 per cent rise in sales to €2.33bn.

The strong results prompted TA to nudge its full-year earnings guidance upwards. Operating income and net income are now expected to rise by more than 20 per cent, compared to the previous forecast of “about 20 per cent.”

TA also announced plans for further share buyback following two failed acquisitions attempts in recent months. Flush with cash after failing to buy a Serbian mobile phone company and a Slovakian wireless license, TA said it will expand its share buyback programme from 6 per cent of its share capital to 10 per cent, or 50m shares.

With growth in the domestic Austrian market limited and competition fierce, TA has in recent months sought to expand in eastern Europe, with the focus on Bulgaria, Bosnia and Montenegro.

The importance of this strategy was underscored by Wednesday’s interim results. TA’s share of the domestic wireless market fell to 38.5 per cent from 39.8 per cent the year before while sales at the fixed line division fell 0.5 per cent to €1.05bn.

Boris Nemsic, chief executive, acknowledged the biggest opportunities lay in mobile businesses abroad.

“Despite market consolidation in the Austrian market, price competition is expected to remain fierce on the domestic market, whereby much of the expected growth of the wireless segment will be generated by Telekom Austria’s international subsidiaries,” he said in a statement.

TA shares were up 1.7 per cent at €18.82 by mid-day in Vienna.

Copyright The Financial Times Limited 2017. All rights reserved.
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