FREE

OTE (Hellenic Telecoms) | Cleaner but not materially faster; retain Hold

Q3 healthy and in line, but without much to move the needle; recalibrating numbers to Greece-only – Q3 adj. EBITDAaL came in at €360m, +2% yoy and broadly in line with forecasts, with the underlying mix unchanged: resilient mobile (mobile service revenues +2.7%), mildly improving retail fixed (+1.3%), and solid ICT momentum (other revenues +14%). Reported net profit landed at €258m due to the €105m Romania-related tax gain, with adj. net profit at €170m (-2% yoy), in sync with our model. Overall, the print aligned with FY market estimates but lacks the dynamism seen across EU telco peers, which continue to post 4-5% EBITDA growth (e.g. KPN, Orange, Telenor). We recalibrate our model to Greece-only continuing operations, which mechanically trims our top line across 2025–27, with negligible impact on EBITDA. In fact, our EBITDAaL edges slightly higher (+0–2%) on stronger mobile trends supported by CPI indexation from December 2025.

Cash return outlook: clearer visibility, but no “extra” cash coming; €530m becomes the new FCF base – Management framed €530m as the organic starting point for annual FCF under the new Greece-only perimeter, with capex stabilising at c€600m even after TERNA Fiber. This removes Romania’s annual drag and crystallizes a cleaner, more predictable cash-generation profile. However, we understand investors should not anticipate further special distributions after the €0.10/share in December (related to Romania disposal proceeds), with mgt clarifying that the €120-130m tax credit in 2026e will be allocated to the 2027 spectrum renewal. Overall, what this boils down to is that shareholder remuneration is likely to settle near €520-530m in the coming years by our math (from c€490m in 2025), equivalent to c8% distribution yield.

Tower talk – Press reports have resurfaced recently on OTE’s potential monetisation of its carved-out tower unit, Cosmote Telekom Towers (CCT), which now owns some 3.8k passive sites. This is even though there has really been no incremental news. While the curve-out has been generating headlines, we caveat that the move relates purely to structural preparation at this stage, with nothing imminent and certainly no special dividend in sight. Fundamentally, the economics of OTE’s TowerCo are too small to shift the valuation dial. Tower EBITDAaL stands at c€40m by our calculation —barely 3% of group EBITDAaL—and even if valued at a generous 2-digit multiple (Towers have de-rated to c12-13x lately), the implied uplift would be