Romtelecom, the biggest fixed telephony operator on the domestic market, posted losses worth 21.1 million euros last year, alongside revenues that fell 2.6% to 871.9 million euros - following the decline in the number of subscribers and the influence of a set of "external factors", company officials say.
In 2006, Romtelecom posted net profit worth 55.2 million euros and revenues worth 894.8 million euros.
"Last year's losses are related to the number of fixed-line customers that the company lost. The losses caused by customers that left the fixed-line network stood at 34-35 million euros, whilst the impact of the offers launched by the company, such as free network call minutes, was limited," stated Yorgos Ioannidis, CEO of Romtelecom.
The number of fixed-line customers fell by 10.8% to 3,035,000 from 3,403,346. However, in the fourth quarter, Romtelecom registered the first net increase of the last three years in the number of fixed line clients.
"Growth on other segments, such as Internet access services, corporate data services or satellite TV could not compensate for the speed at which we lost fixed-line clients," added Catalin Dima, legal and relations executive manager of Romtelecom. He explained that, besides the loss caused by the decline in the number of fixed-line clients, Romtelecom's losses were also generated by other factors, such as last year's exchange rate fluctuations, which had a negative impact of at least 30 million euros.
"The appreciation of the RON only had a 14 million-euro effect on the salary fund and a 16 million-euro effect on amortisation expenses. The impact of RON appreciation was greater, however it is hard to calculate the exact level," Dima said.
The increase in Romtelecom's contribution to Cosmote's losses, which increased to 34.5 million euros from 27.7 million euros, was another factor that contributed to the losses posted by the operator.
Dima added that another factor was the payment of 19 million-euro worth of taxes in the fourth quarter of 2007, as a result of a tax inspection performed at Romtelecom, to check what taxes Romtelecom had paid between 2001 and 2006. "The payment of these taxes, half of which are actually penalties and late charges, comes as a result of different interpretations of the law on the part of Romtelecom and the tax authorities. Considering Romtelecom pays about 100 million euros in taxes every year, any difference in interpretation, no matter how small it might be, can lead to millions of euros in differences, in terms of taxes, and, as time passes, penalties can lead to an increase in the amounts due," added the Romtelecom official.
On the other hand, Romtelecom also registered 292.2 million euros in amortisation expenses, higher than the previous year.
In addition, EBITDA fell 11.2% to 300.3 million euros, from 338.3 million euros in 2006.
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