OTE is scheduled to report Q4/FY:20 results tomorrow before market opening- what to expect

OTE is scheduled to report Q4/FY:20 results tomorrow before market opening- what to expect

  • OTE (Q4/FY:20 results preview): OTE is scheduled to report Q4/FY:20 results tomorrow before market opening. Consensus expects a resilient Q4:20 performance (as was the case in Q3:20), as lagging Greek operations (due to negative COVID19 effect in roaming revenues, handset sales, B2B revenues) will be offset by solid Romanian subsidiary (TELEKOM ROMANIA) performance (owing to cost cutting, real estate asset sales and one-off adjustments) and cost efficiencies and transformation benefits in Greece. In specific:

§  Greek fixed line is seen growing by low single digit in Q4:20 (+2%) enhanced by further broadband penetration and VDSL upgrades, increased ICT revenues (digitalization on both public and private sectors).

§  PAY TV revenues will be weak as discounts and disconnections in businesses affected by the pandemic will take their toll impacting Q4 results.

§  Greek mobile is also expected to be affected by the pandemic on lower ARPU both in the pre-paid and post-paid and lower handset sales due to network operation disruption. On the other hand, Q3:20 negative lower roaming effect will be smoother.

§  All in Greek revenues are seen coming lower by low single digit figure 2%.

§  In Romania, excluding TELEKOM ROMANIA, remaining operations (mobile) will contribute €350mn on top line.

§  On a consolidated level and excluding November 2020 disposed TELEKOM ROMANIA sales are seen down 1% to €3.271bn

§  Reported EBITDA adjusted for IFRS 16 leases is seen retreating by 6.1% to €1.217bn. Greek EBITDA will come in 2% softer courtesy of lower mobile roaming revenues and c€150mn VRS programs (2) both launched in 2020.

§  Reported Net income is seen landing 19.4% higher to €330.617mn.

§  Consensus expects a €0.6/share FY:20 dividend distribution plus an additional €0.35-€0.40/share one off distribution in H2:21 form the proceeds of the sale of TELEKOM ROMANIA announced in November 2020 (€497mn equivalent to €268mn for OTE’s 54% stake).

§  During the conference call we will seek light on operating trends in Q1:21, capex and FCF guidance for 2021 and strategy on potential differentiation on shareholders’ remuneration in 2021. Recall than OTE has guided for a 65%/35% distribution of its annual FCF to dividends/share buyback-cancelation split.

The following table summarizes OTE pro forma (excluding TELEKOM ROMANIA fixed operations) consensus estimates:

ΟΤΕ

2019

2020 Est.

Y-o-Y

EUR thous.

FY

FY

(%)

Sales

3,303,000

3,271,383

-1.0%

EBITDA

1,297,000

1,217,500

-6.1%

EBITDA Mrg

39.3%

37.2%

-205 bps

Net Income

277,000

330,617

19.4%

Net Mrg

8.4%

10.1%

+172 bps

  •  Conference call (26/2) 17:00 Athens time. 

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