Poland's Polkomtel Ebitda, Net Profit To Rise In 2007

Poland's mobile operator Polkomtel expects its net profit to rise in 2007 from 2006, the company's Chief Executive Jaroslaw Bauc said Monday.

Bauc also added that the operator's earnings before interest, taxes, depreciation and amortization, or EBITDA, will also rise in 2007, while revenue likely won't diverge from 2006.

Polkomtel's 2006 net profit was 1.12 billion zlotys ($387.5 million), while its Ebitda was PLN2.48 billion and its revenue was PLN7.36 billion.

Speaking at a news briefing to announce the company's 2006 results, Bauc said that "Polkomtel's net profit growth in 2007 should be similar or slightly higher than last year."

Polkomtel's 2006 net profit rose by 5% compared with its 2005 net profit.

Bauc added the company's rise in Ebitda in 2007 should outpace the net profit growth, mainly due to higher amortization.

He said Polkomtel's revenue in 2007 "should not fundamentally diverge from 2006" and listed the market regulator's decision on interconnect fees between operators as the big element of uncertainty.

Bauc said he expects Polkomtel's investment in the network to reach an all-time high in 2007, and "certainly not less than 2006's PLN1.21 billion."

The chief executive didn't reveal what the company's management will propose for its 2007 dividend but said it won't be less than 50% of net profit. Polkomtel's 2006 dividend represented 92% of the company's net profit in the year.

Polkomtel expects to have 14 million subscribers at the end of 2007, up from 12 million at the end of 2006 and 12.7 million at the end of the first quarter of 2007.

However, Bauc said many of these are multiple subscribers, using services from different operators. Bauc added that the crucial element is customer loyalty, with the key indicator being how well the company retains customers.

The chief executive said 2007 is likely to be a significant year for the telecom sector in Poland for several reasons. Market penetration will exceed 100% in Poland by the end of the year, Bauc said, and he also highlighted falling fees and changes to allow customers to migrate from one operator to another while retaining the same telephone number.

Bauc said that in some Western countries more than 50% of mobile customers changed their operator after gaining the right to do so and retain the same number. "If this awaits us in Poland, we will have a real revolution," he said.

Another recent market change is the launch on March 16 of Poland's fourth mobile operator P4 under the Play brand name, offering third-generation services using the universal mobile telecommunication system, or UMTS.

"Play's offer is quite different from Polkomtel's, but it is a complimentary one," said Bauc. "As a bonus, it is being offered on our network," he added.

Polkomtel, Poland's number-two mobile operator by sales last year, is controlled by four state-dominated companies. Oil refiner PKN Orlen, copper producer KGHM Polska Miedz, power grid operator Polskie Sieci Elektroenergetyczne and coal trader Weglokoks together hold almost 61% of the telecom company.

The remaining 39% is split evenly between Vodafone Group and Denmark's TDC, which is negotiating to sell its Polkomtel stake to the other shareholders.

Source: By David McQuaid and Malgorzata Halaba,
cellular-news.com