VIENNA -- In the first nine months of 2012, the Telekom Austria Group was able to considerably increase net profit to EUR 180.1 million compared to EUR 68.7 million in the same period of the previous year. The operating result (EBIT) also showed a favorable development rising to EUR 388.1 million in the first three quarters of 2012 compared to EUR 208.8 million in the same period of 2011. This increase in earnings is mainly attributable to cost savings and the reduction of restructuring expenses.

“We have worked hard to improve our internal efficiency“, said Hannes Ametsreiter, CEO Telekom Austria Group, commenting on group results for the first nine months. “We are moving forward on the right track. However, the impact from intense competition combined with an overall challenging economic environment has overshadowed our efforts. We will therefore continue to implement cost efficiency measures going forward and further strengthen our focus on our core customer segments. Thanks to our internationally successful convergence strategy, we have a good starting position to meet the challenges ahead.”

In the period under review, the market environment continued to be affected by the same negative developments that had marked the first half of the reporting year, but with stronger implications. The challenging macroeconomic background had a negative impact on consumption of communications services, especially in Croatia and Bulgaria. Strong mobile competition, which continued to intensify in the course of the year, led to considerable price pressure particularly in Austria, Bulgaria and Croatia. As in previous reporting periods, intrusive regulatory measures resulted in additional declines in revenues and earnings.

The Management of the Telekom Austria Group has sought to counteract these negative effects on the market by focusing on convergent broadband offerings as well as on customers subscribing to high-value services and product bundles. Additionally, the group has accelerated cost reduction and efficiency improvements. However, these countermeasures were not able to fully offset the market pressure. As a result, group revenues declined by 3.8% to EUR 3,212.0 million year-on-year, while EBITDA comparable fell by 4.5% to EUR 1,136.6 million. Excluding currency translation effects across all segments and the impact from inflation accounting in Belarus, both group revenues and EBITDA comparable would have increased by 1.4% and 1.7% respectively.

Telekom Austria AG