(Closes shares in final paragraph.)
Feb. 23 (Bloomberg) -- Telekom Austria AG, the country’s biggest network operator, reported a full-year loss four-times greater than analyst estimates after hyperinflation in Belarus erased profit.
The company reported a 252.8 million-euro ($337 million) net loss in 2011 on 4.5 billion-euro revenue, Vienna-based Telekom Austria said in a statement today. Analysts had expected a 59.2 million-euro loss on sales of 4.4 billion euros, according to six estimates collected by Bloomberg.
“Severe macro-economic headwinds in most of its major markets, fierce competition and further regulatory cuts of roaming and interconnection tariffs,” drove a 4 percent revenue decline from 2010, when Telekom Austria reported 4.7 billion euros in sales, according to the statement.
The former Austrian monopoly, which operates mobile networks in seven eastern European countries, has been cutting workers in its home market to boost profitability. Egyptian billionaire Naguib Sawiris has been investing the company along with private-equity investor Ronny Pecik. Together they own 20 percent of Telekom Austria. Austria is the companies biggest shareholder and owns 28.4 percent.
For 2012, the company forecast 4.4 billion-euro revenue and 1.5 billion euros of profit before interest, taxes, earnings before interest, taxes, depreciation, and amortization for 2012, it said. The company will earn at least 100 million euros net income this year, Chief Executive Officer Hannes Ametsreiter said today at a press briefing in Vienna.
Telekom Austria lost 321.5 million euros on 1.1 billion euros of sales in the fourth quarter. That compares to a 273.7 million-euro loss, according to six analysts surveyed by Bloomberg.
Belarusian hyperinflation and a 63 percent devaluation of the ruble accounted for a 213.6 million-euro full-year loss, Telekom Austria said in the statement. Staff reductions in Austria led to a 233.7 million-euro charge. Another 50 million- euro charge will be needed this year for additional staff cutbacks.
Telekom Austria will seek the return of 20 million euros of bonuses paid improperly to former employees, Ametsreiter said.
Austrian prosecutors are investigating payments at the company and the nation’s parliament is conducting corruption hearings about the former national monopoly. Telekom Austria is cooperating fully on both fronts, the CEO said.
Sawiris, in an it interview with News magazine published today, said government-controlled companies are distinguished by three characteristics: corruption, incompetence and slow adaption. Private investors are better positioned to manage companies, he said.
The Egyptian said he would remain a long-term Telekom Austria investor as long as the company enacts changes to improve competitiveness, News reported. Sawiris will only sell his stake “when I observe that the company cannot change,” Sawiris was quoted as saying in the magazine. “The company must become more competitive.”
Telekom Austria shares rose 2.7 percent to 8.782 euros at the 5:30 p.m. close in Vienna. The stock has fallen 4.9 percent this year, giving Telekom Austria a 3.9 billion-euro market value.
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