Bloomberg News

Telekomunikacja Polska’s Profit Jumps 64% on Tax Gain

February 15, 2012

(Updates with sales forecast in fourth paragraph.)

Feb. 14 (Bloomberg) -- Telekomunikacja Polska SA, Poland’s largest phone company, posted fourth-quarter profit that doubled analysts’ estimates as a one-time tax gain compensated for falling sales.

Net income jumped to 358 million zloty ($112 million) from 218 million zloty a year earlier, it said in a regulatory filing today. The mean estimate of seven analysts surveyed by Bloomberg was 177.9 million zloty. Sales fell 4 percent to 3.72 billion zloty from a year earlier and revenue from mobile phone services fell 3.3 percent to 1.94 billion zloty.

“Earnings are weak, with worrisome trends in mobile business,” Pawel Puchalski, a Warsaw-based analyst at Bank Zachodni WBK SA, said by phone.

Telekomunikacja, controlled by France Telecom SA, has seen revenue decline since 2007 as competition increased and the domestic regulator forced operators to cut prices. The Warsaw- based company expects sales to fall by as much as 3 percent in 2012 as the country’s telecommunication watchdog wants to lower the rates that mobile phone operators charge each other for calls to their networks, or MTRs.

Earnings before interest, taxes, depreciation and amortization will account for 35 percent to 37 percent of sales this year, while investments will reach 15 percent to 17 percent of sales, according to the regulatory statement.

TPSA, which posted 1.92 billion zloty of net income last year, wants to pay 1.5 zloty a share as a dividend from 2011 profit. The group will continue to buy back shares this year, Chief Executive Officer Maciej Witucki told reporters today.

The company isn’t “very likely” to consider buying cable television operator Multimedia Polska SA if its owners decide to sell it. Multimedia hired JPMorgan Chase & Co. to analyze “strategic options,” it said in a statement on Feb. 8.

Telekomunikacja booked a 260 million-zloty tax refund in the fourth quarter after it ended a decade-long legal dispute with GN Store Nord A/S, Puchalski said.

--Editors: Pawel Kozlowski, James M. Gomez

To contact the reporter on this story: Marta Waldoch in Warsaw at mwaldoch@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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