Telekom Austria reports Q1 profit drop

Telekom_Austria_logoTelekom Austria, the Austrian incumbent of which America Movil’s Carlos Slim is currently attempting to gain full control, has reported a year on year decline of  26.5 per cent in net profit for the first quarter of 2014. Group revenues for the firm, which has operations in a number of Central and Eastern European markets, were down seven per cent to €975.9m, yielding profit of €40.8m.

In what has become a familiar refrain, Telekom Austria blamed intense competition, regulatory intervention in Europe and economic challenges in Central and Eastern Europe for the decline in performance.

“We knew that the 2014 business year was going to be difficult,” said CEO Hannes Ametsreiter in a statement. “The numerous remedial measures, which we put in place in the first quarter 2014 to improve our earnings power, will bear fruit in the further course of the year. Nevertheless, we are already seeing the first signs of improvement in our markets and the increase in EBITDA margin demonstrates that we are on the right track with our strategy.”

In April this year Mexican operator America Movil, which already holds a 26.81 per cent stake in the group, announced a bid to acquire all outstanding shares in the Austrian operator. If its bid is successful it has pledged to back a €1bn capital  increase in the firm.

The Latin American group’s gradual increase in ownership of Telekom Austria led to the European group parting ways with group CFO Hans Tschuden. A source at the operator told that Tschuden’s departure was fuelled by a conflict with the board members representing Telekom Austria’s Works Council and mentioned that a key topic of discontent was America Movil.

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