OTE reported a rise in the profits for the secong quarter with the group revenues declining as pandemic weighs on certain revenue lines.
The OTE Group’s consolidated revenues decreased by 3.0% in Q2’20 to €918.2mn. In Greece, revenues were down 3.8% to €692.3mn, mainly due to the impact of COVID-19 on the mobile segment. In Romania, revenues were down 1.0% at €228.9mn.
Total Operating Expenses, excluding depreciation, amortization, impairment and charges related to restructuring costs (primarily voluntary leave schemes) and non-recurring litigations, amounted to €586.2mn in Q2’20, a 3.8% decrease versus Q2’19, reflecting stringent cost-control initiatives across the board. In Q2’20, the Group’s Adjusted EBITDA After Lease (AL) increased by 0.8% to €321.3mn, yielding an Adjusted EBITDA (AL) margin of 35.0%, up 130 basis points. In Greece, Adjusted EBITDA After Lease (AL) was down 1.7% to €285.1mn, and the Adjusted EBITDA (AL) margin improved 90 basis points to 41.2%. In Romania, Adjusted EBITDA After Lease (AL) grew 25.7% to €36.2mn, and the Adjusted EBITDA (AL) margin improved
330 basis points to 15.8%.
The Group reported Operating profit before financial and investing activities of €137.7mn in Q2’20. In Q2’19, Group Operating profit before financial and investing activities had totaled €19.6mn, reflecting goodwill impairment charges related to its Romanian mobile operations.
The Group’s Income Tax charge for Q2’20 amounted to €29.5mn, up from €17.5mn in Q2’19, mainly reflecting the positive one-off tax effect in the comparable quarter of the prior year.
Adjusted Group profit after minority interests amounted to €118.4mn in Q2’20, compared to €98.5mn in Q2’19.
Adjusted Capital Expenditures amounted to €151.1mn in Q2’20, down 15.2% from Q2’19, with investments in Greece and Romania standing at €118.0mn and €33.1mn, respectively.
In Q2’20, the Group’s Adjusted Free Cash Flow after leases reached €184.8mn, up from €172.7mn in Q2’19, primarily reflecting lower Capex spending and lower income taxes paid in the quarter.
The Group’s Adjusted Net Debt stood at €847.7mn at June 30, 2020, down 16.3% compared to June 30, 2019.
The Group’s ratio of Adjusted Net Debt to 12-month Adjusted EBITDA (AL) stood at 0.6x.
Commenting on OTE’s 2020 second quarter, Michael Tsamaz, Chairman & CEO, noted: "The second quarter bears the marks of the COVID-19 pandemic on some of our revenue lines. Drastic travel and mobility restrictions are affecting our revenue streams both directly, through lower visitor roaming, and indirectly, as they hurt many businesses dependent on tourism and consumers stayed at home. As a result, mobile and payTV revenues were impacted negatively. Many clients have been hit by the crisis, and we demonstrated our solidarity while maintaining the highest level of service to all our customers, in their homes and in their
workplaces. I thank all our associates for their hard work in this difficult period.
Mr. Tsamaz added: "In both Greece and Romania, with proactive measures to support the recovery of our operations, we are working hard to keep top-line erosion to a minimum, and to mitigate its impact on our profitability, while maintaining and even intensifying our investments in our digital transformation. We remain fully committed to the shareholder remuneration policy we have communicated.”