Hellenic Telecom Organization S.A. (ADR) ((HLTOY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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In a recent earnings call, Hellenic Telecom Organization S.A. (ADR), also known as OTE Group, conveyed a positive sentiment regarding its financial performance. The company reported strong revenue and EBITDA growth, driven by strategic expansions in fiber and mobile services. Despite facing challenges in the Romanian market and a decline in wholesale revenue, the Group expressed optimism about future growth, attributing it to their strategic initiatives and resilience against competitive pressures.
Revenue and EBITDA Growth
OTE Group reported a solid quarter with increases in both revenue and EBITDA, bolstered by contributions from four key segments. In Greece, total revenues rose by 1.1%, while EBITDA saw a 2% improvement, reflecting the company’s effective operational strategies.
Fixed Retail Revenue Growth
For the first time in several quarters, OTE Group’s fixed retail revenue turned positive, achieving a 0.6% increase. This growth was primarily driven by the expansion of the Fiber-To-The-Home network and robust growth in the Pay-TV business.
Mobile Segment Growth
The Mobile segment experienced significant service revenue growth, accelerating by 3.2%. This was supported by the strength of the network and a shift in customer preferences towards contract plans.
Successful Fiber-To-The-Home Expansion
OTE Group successfully added 40,000 new FTTH customers this quarter, marking a 45% year-on-year increase. The network now covers 1.9 million homes, with a target to reach 2.1 million by the end of the year.
ICT Business Double-Digit Growth
The ICT segment continued to deliver double-digit growth, highlighting OTE Group’s capability to support digital transformation initiatives within Greece’s public sector.
Romanian Operations Challenges
In Romania, OTE faced an 8% revenue drop due to market pressures, particularly affecting the postpaid segment. This remains a challenge for the company as it navigates competitive dynamics in the region.
Wholesale Revenue Decline
Wholesale revenues declined by 3.3% during the quarter, attributed to reduced international transit traffic and competitors expanding their own fiber networks.
Impact of PPC’s Entry
The entry of PPC into the telecommunications market presents a new competitive challenge for OTE. Although the impact is currently limited, it signifies an emerging competitive landscape.
Forward-Looking Guidance
During the earnings call, OTE Group maintained its guidance, emphasizing substantial progress across various segments. The company highlighted its strong performance in fixed retail, mobile, and ICT segments, with continued growth anticipated. The disciplined operational execution and strategic investments are expected to sustain future growth and enhance shareholder value.
In summary, OTE Group’s earnings call reflected a positive outlook, driven by strategic expansions and robust performance across key segments. Despite challenges in certain areas, the company remains optimistic about its growth trajectory, supported by disciplined execution and strategic investments.