OTE Group showed a continued increase in profitability in Greece in the third quarter of 2023, with adjusted EBITDA (AL) strengthened by 0.7%.
In particular, according to the relevant announcement, the Group’s adjusted EBITDA (AL) profitability decreased by 1.5% to €352.6 million, with the margin standing at 40%. In Hellas, adjusted EBITDA (AL) profitability increased by 0.7% to €348m, with a strong EBITDA margin of 42.9%. At Romaniaadjusted EBITDA (AL) was €4.6m, down €8m, mainly due to higher energy costs
In Q3 2023, OTE Group’s consolidated revenue decreased by 2.6% to €881.0 million. In Greece, revenue decreased by 2.2% to €811.8 million, as the lowest revenues from wholesale services and a temporary decline in revenues from ICT projects offset the positive performance in mobile, broadband and TV services. In Romania, revenue decreased by 7.4% to €71.1 million, reflecting the impact of a reduction in mobile termination fees as well as promotions in previous periods to retain the customer base.
The Group’s total operating expenses, excluding depreciation, impairments and charges related to restructuring costs (mainly Voluntary Severance Programs), decreased by 2.3% compared to Q3 2022 and amounted to €515.2 million, reflecting cost containment efforts in several areas, primarily in personnel and energy, as well as a reduction in expenses as a result of lower revenues.
Message from the President and CEO, Mr. Michalis Chamaz
“In the third quarter, we continued our dynamic course in the Greek market, recording positive performances in all areas that ensure our future growth and profitability. Despite intensifying competition, and thanks to customers’ trust in the COSMOTE brand and the top-notch services it offers, we have achieved significant growth in broadband, TV and mobile contract customers, data that allows us to be optimistic. The expansion of the fiber optic network continues at a steady pace, attracting more and more customers, while the new FTTH coupon is expected to further strengthen these trends. Cost containment efforts across our operations, including our recent voluntary severance program, continue to pay off. As a result, we record in Greece an increase in EBITDA profitability, but also a strong margin. We enter the final stretch of 2023 with a solid foundation to continue our successful strategy next year as well.”
Prospects
Increasing geopolitical challenges and instability may adversely affect the macroeconomic environment. In particular, rising interest rates, the risk of rising inflation and energy costs are expected to negatively impact consumer spending. In an environment of intensified competition, OTE maintains its position and market share and continues to benefit from its advanced network infrastructures, both fixed and mobile. OTE leverages its comparative advantage in FTTH implementation, 5G coverage, and technological superiority, continuously increasing its customers. OTE will continue its investment strategy, focusing on the expansion of FTTH and 5G, as well as high-level customer service, advanced services and the strong COSMOTE brand. FTTH demand is expected to be further boosted by government subsidy programs in 2024. OTE has recently undertaken various initiatives to enhance the value of its products and services in order to secure future growth and maintain its sound financial position in Domestic market. At the same time, despite occasional delays in ICT project contracts in the quarter, OTE expects continued development of its activities in this area, also due to the gradual implementation of the Recovery and Resilience Plan. It is worth noting that OTE operates as one of the main Systems Integrators for businesses and the public sector, in Greece and Europe.
For 2023, OTE management expects an increase in adjusted EBITDA (AL) profitability to nine-month levels, supported by cost savings initiatives in areas such as personnel and energy costs. OTE has signed agreements for a large part of its energy needs for 2024, securing future costs, albeit at higher prices compared to its previous contract. At the national level, performance is expected to be affected by the challenges facing Romania.
OTE management maintains the target for free cash flows at approximately €500 million, while the Group’s investments will be approximately €620 million, 3% lower compared to the previous forecast of €640 million, due to timing of some TV content payments as well as some delays in the implementation of FTTH due to the adverse weather conditions in the past period.
The total Shareholder Remuneration for 2023 is estimated to amount to approximately €425 million, corresponding to a dividend worth €250 million and a Share Purchase Program of approximately €175 million. The final dividend, corresponding to €0.58878 per share, was paid on July 11, 2023, while to date, the company has disbursed 88% of the total amount corresponding to the Own Share Acquisition Program.
See the results in detail in the right column “Related Files”.
