Telekom Austria forecasts further revenue drop in 2013
Telekom Austria Group has warned of a further drop in revenue in 2013 due to tough market conditions.
The Austrian carrier said that industry consolidation in its domestic market was unlikely to end a price war and further regulatory cuts, macro-economic headwinds and foreign-exchange risks would all impact its financial performance.
The group forecast €4.1 billion in revenue for 2013, down from the €4.2 billion it forecast for 2012 and said that it expected to pay a reduced dividend of 0.05 euros per share for 2012 and 2013. No forecast for EBITDA was given.
Telekom Austria said that it would focus on high value customer segments in mature markets to address the challenges it is facing.
The company admitted that this would impact its margins in the short-term but was confident the strategy would provide an “optimal basis for future stabilisation”. Telekom Austria will also intensify its cost efficiency programme in all business segments to reduce pressure on margins.
Shares in Telekom Austria fell by as much as 2.9% in early trading on Tuesday, after having risen to their highest since September 2012 on Monday.
Analysts were quick to label Telekom Austria’s lack of EBITDA guidance as cause for concern.
Today’s announcement will be bad news for Carlos Slim, who has already seen last year’s investment in a 23% stake in Telekom Austria drop significantly in value, according to reports.
Telekom Austria said it would continue to pursue its convergence strategy but gave no further details and said that it expected to benefit from strong demand for smartphones and mobile broadband solutions.
The company is due to give a presentation on its strategy on January 15.