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24.03.2004 – 07:03

Telekom Austria AG

euro adhoc: Telekom Austria AG
Quarterly or Semiannual Financial Statements
Telekom Austria Group: Results for the Financial Year 2003 (E)

  Disclosure announcement transmitted by euro adhoc.
  The issuer is responsible for the content of this announcement.
Vienna, March 24, 2004 -- Telekom Austria AG (VSE: TKA; NYSE: TKA)
today announced its results for the Financial Year 2003 and the
fourth quarter ending December 31, 2003.
During 2003 total group revenues increased by 1.6% to EUR 3,969.8
million. Starting from October 1, 2003 an Austrian court decision led
us to change the accounting for third party value added services
revenues from a gross to a net basis of revenue recognition, which
led to a decline in revenues and costs without impacting adjusted
EBITDA. Applying this change also to prior periods, revenues show an
increase by 1.9% to EUR 3,923.9 million during 2003. Adjusted group
EBITDA rose for fiscal year 2003 by 3.1% to EUR 1,509.8 million.
The wireline segment was successful in slowing the rate of decline in
revenues compared to prior periods; adjusted EBITDA was still
impacted by the accelerated headcount reduction in spite of
substantially lower operating costs. The wireless segment benefited
from the improvements in 4Q 03 compared to last year and increased
revenues and profitability in all its activities during 2003.
The increased profitability and lower depreciation, amortization and
impairment charges led to an increase in total annual operating
income by 35.4% to EUR 369.8 million.
Consolidated net income of Telekom Austria rose from EUR 12.8 million
to EUR 134.2 million and includes a gain of EUR 18.4 million from the
sale of a 26% interest in Herold Business Data AG, the leading
Austrian telephone directory provider. Earnings per share improved
from EUR 0.03 to EUR 0.27.
Capital expenditures fell by 10.1% to EUR 595.3 million during 2003,
including the impact of the non-cash effect of adopting SFAS 143,
amounting to EUR 6.6 million. Excluding the impact of SFAS 143 the
decline amounts to 11.1% to EUR 588.7 million.
Quarterly figures show an increase in group revenues by 1.0% to EUR
1,018.5 million in 4Q 03. Applying also to 4Q 02 the change in the
accounting for third party value added services revenues, as per
October 1, 2003, 4Q 03 revenues increased by 2.6%.
Adjusted EBITDA rose by 7.9% to EUR 307.1 million during 4Q 03 which
together with lower depreciation, amortization and impairment charges
led to the turnaround in group operating income to EUR 14.2 million
during 4Q 03 compared to EUR (81.1) million during the same period
last year. Net result improved from a loss of EUR (99.2) million to a
loss of EUR (21.2) million. Group capital expenditures declined by
12.2% to EUR 255.9 million.
Net debt continued to decline during 2003 as a result of strong cash
flows. Total net debt fell to EUR 2,637.3 million at the end of
December 2003, compared with EUR 3,204.2 million at the end of
December 2002, in spite of the financing of the EUR 69.7 million
acquisition price to increase the stake in VIPnet from 71% to 99%.
Based on these results, the management board of Telekom Austria will
recommend to the annual general meeting (AGM) the payment of a
dividend in the amount of EUR 0.13 per share.
Telekom Austria is currently authorized by the AGM to buy back up to
50 million shares at a price between EUR 9 and EUR 15 until December
3, 2004. Today the board of Telekom Austria announced that it intends
to make use of this authorization. Following the first repurchase,
which happened on February 27, 2004 through an off-market
transaction, there are currently up to EUR 270 million of reserves
available for further buybacks.
At yesterday's closing price of EUR 11.35 this would amount to
approximately 23.8 million shares or 4.8% of Telekom Austria's
outstanding share capital as per Dec. 31, 2003. Telekom Austria
intends to execute the share repurchases through market transactions
and to limit such purchases so that the holding of our principal
shareholder ÖIAG does not exceed 50% of our outstanding shares.
Outlook: Growth rates in the Telekom Austria Group are likely to
level out during 2004. This translates into an estimated increase of
0% to 1% in group revenues and 1% to 2% in adjusted EBITDA for 2004.
The resulting slight improvement in margins reflects the steady focus
on cost reduction measures in all areas of the company. Growth in
adjusted EBITDA and a further decline in depreciation and
amortization are expected to lead to an above average rise in net
income by substantially over 10%. At present budgets do not include
the impact of the planned changes in Austrian corporate taxation law,
as the full details of the proposed amendments are not known yet.
All financial figures are based on U.S. GAAP. Further information
please find on the website www.telekom.at.
end of announcement        euro adhoc 24.03.2004

Further inquiry note:

Martin Bredl
Head of Public Relations
Phone: +43 (0)59059 1-11001
mailto:martin.bredl@telekom.at

Hans Fruhmann
Head of Investor Relations
Tel.: +43 (0) 59059 1-20917
mailto:hans.fruhmann@telekom.at

Branche: Telecommunications Equipment
ISIN: AT0000720008
WKN: 720008
Index: ATX, ATX Prime, WBI
Börsen: Wiener Börse AG / official dealing
New York / official dealing

Original content of: Telekom Austria AG, transmitted by news aktuell