AUS
NZ
UK
CA
USA
IND
_07_31_2024_20_06_55_385293.jpg)
OTE Group (LSE:OTES) has announced its financial results for the second quarter of 2024, showcasing robust revenue growth driven by strong performance in Greece. Despite challenges in Romania, the company's overall financials reflect a positive trajectory for the year.
Revenue Growth and Regional Performance
In Q2 2024, OTE Group's total revenues reached €910.7 million, marking a 6.6% increase compared to the same period last year. This growth was primarily driven by the Greek operations, which saw a notable 7.6% rise in revenues. The uptick in Greece was supported by impressive gains in Mobile, Broadband, TV, and ICT services.
Conversely, the company's Romanian operations experienced a 3.8% decline in revenues. This decrease was attributed to the competitive market environment and the effects of mobile termination rate (MTR) cuts, coupled with customer-retention promotions from previous periods.
Operating Expenses and EBITDA Performance
Total Group Operating Expenses, excluding depreciation, amortization, impairment, and restructuring costs, amounted to €567.3 million in Q2 2024. This represents an 11.8% increase from the previous year, driven largely by higher direct costs associated with increased revenues.
The Group's Adjusted EBITDA (AL) remained steady at €326.7 million. While Greek operations saw a 1.5% increase in EBITDA, this was counterbalanced by profitability pressures in Romania. The overall Group Adjusted EBITDA (AL) margin decreased to 35.9%, reflecting the impact of lower-margin international wholesale revenues and significant contributions from ICT.
Strategic Outlook and Network Advancements
OTE Group is focused on reinforcing its network leadership in Greece through continued investments in Fiber to the Home (FTTH) infrastructure and 5G technology. The expansion of FTTH is expected to enhance customer loyalty and deliver greater value. OTE's superior 5G network, recognized for its excellence by ookla® and "umlaut," underpins ongoing growth in mobile service revenues.
The company's strategic focus on leveraging these technological advancements aligns with its role in supporting Greece’s digital transformation. The positive macroeconomic conditions in Greece, coupled with the EU Recovery and Resilience Fund, are anticipated to further bolster growth in the ICT segment.
Full-Year Guidance and Shareholder Returns
For the full year of 2024, OTE Group maintains its Free Cash Flow (FCF) guidance of approximately €470 million. This forecast is influenced by higher cash income tax payments and weaker cash flow performance in Romania compared to 2023. The Group expects Capital Expenditures (CAPEX) to be between €610 million and €620 million, dedicated mainly to the expansion of its FTTH network.
In terms of shareholder remuneration, OTE plans to distribute around 95% of its projected Free Cash Flow for 2024. This includes approximately €297 million in cash dividends and €153 million allocated for share buybacks, totaling an estimated €450 million in returns to sharehol
