Romtelecom posts losses due to restructuring and new offers

Romania’s largest landline phone operator, Romtelecom, posted a 0.2 percent drop in revenues in 2008, down to €869.8 million, and a staggering €36.2 million in losses, compared to earnings worth €8.1 million. These results are due to significant costs needed for the company’s restructuring program and aggressive services offers launched in order to increase the client portfolio.
The costs of the company optimization program, which led to a personnel cut of 2,000, amounted to €38 million, and lowered the company’s earnings before interest, taxes, depreciation and amortization (EBITDA) by 15.6 percent, to €253.2 million. The company now has 10,344 employees. The program also led to a 5 percent decline in payroll costs in the fourth quarter of 2008, compared to Q4 2007. However, it did not compensate for higher equipment costs.
Romtelecom lost less than 2 percent of landline clients, significantly lower than the 11 percent loss in 2007, and it registered a significant rise in clients for data and TV services. By the end of 2008, the company had 650,000 internet clients, almost double year-on-year, and 250,000 new clients for satellite TV services, for a total of 643,000. Revenues from data services rose 33 percent, while those from TV services rose 93 percent. As of April, the company will launch mobile internet services, based on a 3G license won last year. Most major telecom operators locally own such licenses.