OTE: Impressive economic results

The Group’s succeeded impressive economic results with its revenue being raised by 1.8% thanks to further growth in Greece with a 3.2% increase in Group Adjusted EBITDA.

For 2021, adjusted investments are estimated to slightly exceed 550 million euros, while Management continues to expect adjusted free cash flow of 575 million euros approximately. Free cash flow will amount to 480 million euros, constituting the total Remuneration to shareholders for 2021. In addition, the Board of Directors approved an extraordinary remuneration to shareholders of 174 million euros, which is a distribution of the net amount from the sale of the stake held by OTE to Telekom Romania (Fixed).

OTE Group successfully completed the sale of the stable in Romania, taking an important step as part of its strategy for refocusing on sustainable and profitable activities. OTE remains in the Romanian market holding 100% of Telekom Romania Mobile after acquiring the 30% previously held by Telekom Romania.

OTE Group’s consolidated revenues increased by 1.8% in the third quarter of 2021 and stood at 861.4 million euros. In Greece, revenues increased by 3.5%, to 789.9 million euros, supported by the recovery in tourism and the steady demand for higher speeds in fixed and mobile data. In Romania, mobile revenues stood at 80.8 million euros in the quarter, down by 10.8%, reflecting some exceptionally favourable adjustments made in the third quarter of 2020. Excluding these adjustments, revenues in Romania would have fallen by about 4%. 

The Group’s total operating expenses, excluding depreciation, impairments and charges related to reorganization costs (mainly Voluntary Retirement Plans), and non-recurring legal cases, amounted to 488.1 million euros  in the third quarter of 2021 increased by 0.9% compared to the third quarter of 2020, as significant savings in personnel costs following the strategic transformation initiatives implemented in 2020, almost offset the increase in energy costs.

The Group’s adjusted EBITDA (AL) increased by 3.2% to 352.5 million euros, leading to a strong margin of 40.9% due to the positive performance in Greece. In Greece, adjusted EBITDA (AL) recorded a significant increase of 5.0%, to 342.0 million euros, and margin stood at 43.3%, higher by 60 basis points. Mobile in Romania recorded adjusted EBITDA (AL) profitability of 10.5 million dollars, down 33.5% from a high benchmark.

The Group recorded a profit before tax of  281.5 million euros, higher by 271 million euros compared to the third quarter of 2020, mainly due to the impairment by 160 million euros  in mobile Romania in the third quarter of 2020, as well as the reversal of the 132 million euros  provision in the current quarter related to OTE’s pension fund for voluntary retirement schemes. 

The Group’s income tax recorded a charge of  71.1 million euros  in the third quarter of 2021, compared to the positive taxation of 56.6 million euros  in the third quarter of 2020, mainly due to the positive deferred tax related to the sale of Telekom Romania and recorded in the third quarter of 2020 after the announcement of the transaction last year.

Adjusted investments in fixed assets in the third quarter of 2021 amounted to 161.4 million euros, up 62.5% from the third quarter of 2020, partly reflecting higher payments for TV content. Investments in Greece and mobile Romania amounted to 147.2 million euros  and 14.2 million euros  respectively. In the first nine months of the year, adjusted investments reached  398.5 million euros, up 4.3% compared to the same period last year.

Adjusted free cash flow after leases amounted to 115.8 million euros, up 1.3% year-on-year despite higher investments in the quarter. Free cash flow reached 108.0 million euros, up by 16.4 million euros  on an annual basis, due to lower income tax, interest expenses and payments related to voluntary retirement schemes.

The Group’s adjusted net debt at 30 September 2021 was 763.9 million euros , down by 26.0% compared to 30 September 2020. The Group’s adjusted net debt corresponds to 0.6 times the annual adjusted EBITDA.

“Thanks to our continued strong performance in Greece, OTE Group scored a strong third quarter. Group revenue, EBITDA and EBITDA margin are all higher than last year. Revenues in Greece were boosted by the growing demand for higher speeds and more data, both mobile and stable, as well as by the recovery in tourism that led to a significant improvement in roaming revenues. In Romania, we have completed the sale of our operations in the stable and acquired 100% in mobile, the performance of which is in the right direction.

“Our strong cash flow since the beginning of the year, allow us to seamlessly implement both our remuneration policy to shareholders and our investments in state-of-the-art infrastructure, for the benefit of our customers and the country.”, stated Michael Tsamaz, President and CEO of OTE.

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