OTE: 4.7% increase in revenue and 8% in adjusted EBITDA

The OTE group announced today an increase of 4.7% in the turnover of the first quarter, while the adjusted EBITDA showed an increase of 8% and the adjusted net profits of the shareholders increased by 27.7%.

The positive performance continues with the main operational and financial indicators strengthening, the group notes in a relevant announcement. It also notes the “strong growth in all sectors in Greece:
-Income increase of 4.4% and Adjusted EBITDA (AL) by 5.1%
-Revenue from services increased by 3.6% due to strong growth in mobile (+ 4.5%), television and positive trends in broadband services
20% increase in fiber optic service subscribers, with a penetration of 53%
-FTTH network available to 634 thousand households and businesses at the end of March, increase of FTTH subscription base by 14 thousand in the quarter

For the activities in Romania, the group states that they were strengthened by an extraordinary adjustment, the profitability more than doubled on a comparative basis in the first quarter.

M. Tsamaz: Quarter of growth despite the unstable environment

“In an unstable environment, especially in Europe, we have achieved another quarter of growth, which lays the foundations for a successful year”, says the president and CEO of OTE, Michalis Tsamaz and adds: “Revenues and profitability at Group level have increased In Greece, our revenues have been further boosted as a result of our investment and commercial operations, and we have announced a number of initiatives that are expected to support positive performance, such as upgrading speeds to fixed broadband services and enriching mobile packages that offer more voice and data to our customers.

Faced with higher costs, especially for energy, and a dynamic, competitive environment, we will remain vigilant in order to maintain our good performance, for the benefit of all stakeholders. We have talented people, a strong brand, a rich product portfolio, modern infrastructure and the right attitude to meet the challenges and take advantage of the opportunities that will be presented in 2022. ”

Perspectives

Increased geopolitical challenges, together with the prolonged effects of the health crisis, are expected to negatively affect the macroeconomic environment. In this context, the OTE Group will continue to implement systematic cost containment efforts. In addition, it is expected to benefit from its ongoing investments in advanced network infrastructure in both fixed and mobile. The dynamic development of FTTH and 5G allows the Company to offer even better services to its customers and to support the digital transformation of the country. Its technological superiority, combined with a consistent focus on customer experience, will allow OTE to further enhance its revenue and profitability.

In addition to intensifying investments in FTTH network, OTE strengthens the trust of its subscribers by upgrading the speeds of fixed broadband internet for home and corporate customers where it is technologically feasible, and offering new programs to mobile, which will enhance the value of services to the customer.

The implementation of the Recovery and Sustainability Plan is a decisive factor both for the financial prospects of the country and for the activity of OTE in the field of ICT, the importance of which is expected to increase significantly for the Group in the coming years.

Maintains the goals for 2022

OTE Management maintains its targets for 2022. The adjusted investments of the Group are estimated to increase to approximately € 620 million, while the free cash flows are estimated to amount to approximately € 600 million in 2022. The total Remuneration to the Shareholders for 2022 will amount to € 500 million and will be divided equally into a proposed dividend corresponding to € 0.558 per share, and an Equity Acquisition Program of approximately € 250 million.

Dividend and Repurchase Program of Own Shares

The Board of Directors of OTE will propose to the Ordinary General Meeting of Shareholders of the Company on May 25, 2022, the distribution of a dividend of € 0.558 per share. The corresponding dividend payment of € 250 million represents 50% of the total amount available under the Revised Shareholder Remuneration Policy 2022, which was approved by the Board of Directors on February 23, 2022. The remaining amount of approximately € 250 million has been allocated for purchases of treasury shares under the new Equity Acquisition Program, which was approved by the Extraordinary General Meeting of Shareholders on January 18, 2022.

The dividends that will correspond to the same shares that the Company will have acquired under the Own Shares Acquisition Program and that the Company will hold at the cut-off date, will increase the dividend of the other shareholders.

Quarterly results – OTE Group

Recording strong performance in the quarter, OTE continued the positive trends of 2021. In the first quarter of 2022, the consolidated revenue of the OTE Group showed an increase of 4.7% and amounted to € 825.3 million. In Greece, revenues increased by 4.4% to € 748.2 million, benefiting from the favorable comparison base due to a pandemic, as well as from strong performance in Mobile, TV, Broadband, and ICT services. In Romania, revenues increased by 1.6% to € 78.4 million, mainly due to specific activities which are not expected to continue in the coming quarters. Excluding these activities, revenues would have fallen by around 6%, mainly driven by significant reductions in mobile termination rates (MTRs) on an annual basis.

The total operating costs of the Group, excluding depreciation, impairment and charges related to reorganization costs (mainly Voluntary Retirement Programs) and non-recurring legal cases, amounted to € 484.2 million in the first quarter of 2022, increased by 3.3% compared to the first quarter of 2021, as a result of increased revenues. Cost containment efforts have largely offset the increase in energy costs from the current crisis.

THE adjusted EBITDA (AL) profitability of the Group increased by 8.0% to € 325.3 million, leading to a margin of 39.4%. In Greece, the adjusted EBITDA (AL) profitability increased by 5.1%, to € 313.6 million, and the EBITDA margin amounted to 41.9%, higher by 30 basis points. Mobile in Romania recorded adjusted EBITDA (AL) profit of € 11.7 million, while excluding extraordinary adjustments, profitability would have reached approximately € 6 million.

The Group recorded profit before tax € 171.8 million, higher by € 23.3 million compared to the first quarter of 2021, mainly due to the higher profitability in Greece and Romania. The Group’s income tax amounted to € 42.3 million in the first quarter of 2022, reduced by 12.8% compared to the first quarter of 2021, mainly reflecting the reduced tax rate.

The adjusted investments in fixed assets amounted to € 93.0 million, reduced by 6.9% from the first quarter of 2021, as the development of the FTTH network intensified at the end of the quarter. Investments in Greece and mobile Romania amounted to € 81.1 million and € 11.9 million respectively.

The customized free cash flows after leases amounted to € 227.8 million in the first quarter of 2022, increased by 39.9% on an annual basis, while free cash flows amounted to € 221.8 million, increased by 90.4%. This increase mainly reflects higher profitability, improvements in working capital, lower payments for voluntary retirement plans, as well as investment timing. The accelerated growth of FTTH, payments for television content and the implementation of a new voluntary retirement program in Greece are expected to affect cash flows in the coming quarters.

THE adjusted net lending of the Group on March 31, 2022 was € 615.7 million, reduced by 33.5% compared to March 31, 2021. The adjusted net debt of the Group corresponds to 0.5 times the annual adjusted EBITDA (AL).