Portugal Telecom Q2 Profits Drop 20%

Portugal Telecom has reported a 20% drop in second-quarter profits to EUR 89.7 million down from EUR 112.1 million a year ago. Revenue fell by 2.5% to EUR 1.63 billion, while EBITDA rose 1.6% to EUR 594.9 million.

Revenues from domestic operations, which include wireline and TMN, decreased by 2.6% y.o.y in 2Q09 as a result of the severe decline in MTRs and the substantial decrease in equipment sales, despite the strong performance of wireline retail revenues, which increased by 2.0% y.o.y in 2Q09, and TMN customer revenues, which increased by 1.6% y.o.y.

Capex decreased by 31.2% y.o.y in 2Q09 to EUR 33 million. The decrease in TMN's capex is explained primarily by the investments in the continued deployment of 3G/3.5G networks, both in terms of capacity and coverage, carried out in 2008. Capex continued to be directed primarily towards expanding network capacity and coverage, as a result of increased voice and data usage, and improving mobile voice and data services to customers, an effort that will be intensified in 2H09. Approximately 70% of network capex is being directed towards 3G and 3.5G networks.

Posted to the site on 6th August 2009