Telekom Austria - Strong results, operating trends more resilient than expected
Quarterly results wrap-up: 2Q 20 results of Telekom Austria clearly beat market expectations. While revenues of EUR 1,096 mn (-2.4% yoy) were in line with RCB and consensus estimates, EBITDA adj. for restructuring expenses of EUR 415 mn (-0.5% yoy) beat RCB and consensus by 6% and 4%, respectively. The outperformance on the bottom line was even more pronounced (net profit a.m. of EUR 114 mn, vs. RCB est. of EUR 79 mn and consensus of EUR 91 mn). We point out, that especially in the three main markets, Austria, Bulgaria and Croatia operating trends held up stronger than we assumed, and service and equipment revenues showed a lower than expected negative impact from lockdown measures. In addition, opex savings, especially personnel and marketing expenses, contributed to the outperformance. While Austrian revenues were down by about 2% yoy (adjusted for real estate gains of about EUR 8 mn in 2Q 19), EBITDA adj. increased by 3.7% yoy adjusted for last years one-off. In CEE countries the EBITDA development ranged from +7% yoy in Bulgaria (continued strong operating trends especially in business) to -6% in Belarus (negative FX effects of EUR 14 mn on revenues) and North Mazedonia.Telekom Austria is engaged as full service telecommunications providers of long distance, local and wireless services, corporate data communications services as well as internet services and television broadcasting. Co. generates revenues from fixed line services and mobile communication services to individuals, commercial and noncommercial organizations and other national and foreign carriers. To a lesser extent, Co. generates revenue from the sale of mobile communications handsets. Co. also supplies telephones and technical equipment for telephone communications. These activities are conducted primarily in Austria, Croatia, Slovenia, Bulgaria, Serbia, Macedonia and Belarus.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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