PT announces full year 2008 results
Wednesday, February 18, 2009
PT’s full year 2008 results were disclosed today, showing an improvement in every business. Zeinal Bava, PT’s CEO, underlined the 9.5% growth y.o.y. in the consolidated operating revenues at a press conference, and stressed that these positive results were ‘the outcome of a great teamwork”
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Zeinal Bava presented the full year
2008 results at a press conference | At a press conference in the morning of 18 October, PT’s Board of Directors presented the full year 2008 results. A year marked by several successful events, against the trends of the economy and of a good deal of companies in the sector. Once again, the company surpassed all market expectations and registered an increase in every business (read the Press release with the full year 2008 results).
Portugal Telecom showed positive results at the end of 2008. ‘Our balance is solid’ said Zeinal Bava during this session that took place at Forum Telecom in Lisbon. The consolidated operational revenues stood at 6,734 million Euro, a 9.5% increase y.o.y., driven by growth at TMN and Vivo. EBITDA pre-PRBs increased by 8.6% to 2,488 million Euro. In 2008, EBITDA increased to 2,443 million Euro, which is equivalent to a 36.3% margin, and operational income stood at 1,175 million Euro. Excluding exceptional items, net income grew by 4.7% y.o.y.
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Luís Pacheco de Melo, Board Member,
PT Group, shared the
financial data with the audience | PT’s CEO stated that the company maintained its “strong profitability in Portugal and in its international operations’ and underlined that PT added ‘1.3 million customers. We defined 2008 as a year of growth for the company’, a target reached. Results demonstrate a solid operational performance and sustained growth in both home and international operations. According to Luís Pacheco de Melo, Board Member, PT Group, who focused upon PT’s financial performance, ‘all our businesses, at home and internationally, showed a strong performance both in terms of operations and of customers.
It is worth highlighting the results obtained throughout the 4th quarter of 2008, as operational revenues and consolidated EBITDA pre-PRBs increased to 1,701 million Euro and 616 million Euro respectively i.e. a 5.1% and 7.2% growth y.o.y. Net income increased by 100.3% y.o.y. to 144 million Euro.
Zeinal Bava mentioned a few strategic marks in 2008, namely the reorganisation of the company in terms of segments, which brought PT closer to its customers. Television was another major issue. Meo is an advanced, innovative service in which PT has made a clear investment in terms of content. The results presented demonstrate unprecedented growth in the television business. According to PT’s CEO, ‘the market is growing’ as the result of fierce competition and it became possible for the company to reach critical mass. Meo has 312,000 customers already and ‘we have kept growing last January’.
The revenues of PT Comunicações grew by 2% during the 4th quarter of 2008. The best performance in the last 16/17 years. ‘We are reducing line loss’ and reverting trends. ‘When we constituted PT Portugal in September 2007, we launched an ambitious project’ for the wireline business – the bet on television. The commitment of our employees made our ‘confidence level rise significantly’. Portugal Telecom stated its intention of maintaining its recruitment programs for young people as well as the training programs. ‘In 2009, we intend to keep all our employees’.
In terms of mobile business, ‘we have bet on reinforced network coverage’. PT is the broadband leader in Portugal and is also striving to improve data coverage. In the scope of the ‘e-escola’ program, PT has already distributed 350,000 portable PCs. ‘We will continue to be the main investor in this project’. ‘We have transformed Portugal into the country with the 2nd highest mobile broadband penetration in Europe’. PT has ‘invested in structuring projects’ and assumes itself as one of the top investment groups in the country. This company wishes to keep investing in Portugal throughout 2009.
As to international operations, Brazil and Africa remain PT’s main commitments. Vivo increased its customer base by 34%, holding a market share of circa 30% at the end of 2008, thus maintaining the leading position in the Brazilian market. ‘We believe that mobile penetration will continue to rise. Broadband will grow significantly’, said Zeinal Bava. Africa is a continent with an enormous potential of growth. ‘We will roll out SAPO Mozambique’ this week.
During the press conference, PT’s CEO also spoke about PT’s commitment to the Sustainability and Social Responsibility issue. One of PT’s fundamental pillars is to assume the values of citizenship in the operations in which it is present. ‘We have been reinforcing our social responsibility programs’. Just like in Namibia, PT will announce a new pilot-project in Mozambique with the Magalhães PC. As to the environment issue, ‘our sector can contribute’ to decrease the impact of the carbon footprint. In what concerns employees, the CEO declared that PT’s bet on professional upgrading and development will be reinforced.
Expressing his enthusiasm with the results obtained during 2008, Zeinal Bava thanked employee involvement and commitment and underlined that these results were the “result of a great teamwork carried out by all of us”.
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(1) EBITDA = income from operations + depreciation and amortisation. (2) EBITDA pre-PRBs = EBITDA + post retirement benefits. (3) Income from operations = income before financials and income taxes + curtailment costs + losses (gains) on disposal of fixed assets + net other costs (gains). (4) Net income adjusted for several exceptional items. (5) Capex in 2008 excludes the acquisition of 3G licenses in Brazil (Euro 227 million). In 2007, capex excludes Euro 242 million related to the additional commitments under the terms of the UMTS license. (6) EBITDA margin = EBITDA / operating revenues. (7) EBITDA margin pre-PRBs = EBITDA pre-PRBs / operating revenues. (8) Earnings per share computed using net income, with and without the adjustments of the exceptional items, less the costs associated with the convertible bonds divided by the diluted number of shares.
Summing it up, the year of 2008 was marked by:
- Strong annual results and improvement in every business;
- Inflection in the trends of its flat fee broadband net additions and in the revenues of the wireline business at home, driven by strong pay-TV growth;
- Strong growth in the mobile business at home, driven by mobile data and by converging offers;
- Continued profitability growth in mobile international operations through increase in cash flow contribution;
- Strong cash flow generation, in spite of CAPEX increase;
- Increase of net debt due to share buyback program;
- Adequate debt maturity and net position.
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