Portugal NOS' quarterly profit drops 15% as 5G capex ups amortisations (updated)

Nos SGPS SA

26/04/2023 18:00

(Adds EBITDA, quotes)
    By Sergio Goncalves
       LISBON, April 26 (Reuters) - Portuguese
telecommunications firm NOS  NOS.LS  posted on Wednesday a 15%
fall in first-quarter net profit as amortisation costs rose
after strong investments to bring its fast-speed 5G network to
almost everyone in Portugal.
    NOS, whose businesses include cable television and cinemas,
made a net profit of 34.9 million euros ($38.55 million) between
January and March.
    Consolidated revenue rose 2.2% to 381.4 million euros in the
quarter from a year ago, of which 369.2 million euros were from
its core telecommunications business.
    As the company invested 496 million euros in 2022 and 97
million euros in the first quarter, mostly in its 5G wireless
network, depreciation and amortization costs increased 15% to
480.9 million euros between January and March.
    Its 5G network covered 88% of Portugal's population in
March, said NOS, which a year ago was in the initial phases of
the new technology roll-out.
    Chief Executive Officer Miguel Almeida said the results were
"very consistent, reflecting operational growth" with further
investments in innovation and partnerships "that will contribute
to materialising the opportunities that 5G presents to companies
and families".
    "The drop in net income reflects, in addition to the
inflationary context, the impact of this strong investment
towards leveraging Portugal's technological transformation," he
said in a statement.
    Operating costs rose 7% year-on-year to 869.9 million euros
in the first quarter due to soaring inflation.
    Consolidated earnings before interest, taxes, depreciation
and amortization (EBITDA) rose by 8.8% to 173.5 million euros,
while its EBITDA margin - a key measure of profitability
--improved 2.8 percentage points to 45.5%, the company said.
    NOS added 388,200 mobile telecoms customers compared with a
year ago, to a total of about 5.8 million at the end of March,
and its revenue generating units (RGU) - either individuals or
businesses - rose by 4.8% to 10.87 million.    
($1 = 0.9052 euros)

 (Reporting by Sergio Goncalves; Editing by Andrei Khalip and
Emelia Sithole-Matarise)
 ((sergio.goncalves@thomsonreuters.com; +351213509204; Reuters
Messaging: sergio.goncalves.reuters.com@reuters.net))