Romanian telecom company Romtelecom's loss widens in difficult economic context

Romanian landline telecom operator Romtelecom, majority owned by Greek OTE, posted a loss of EUR 310 million last year, higher than the roughly EUR 263 million losses the year before. It managed to post an operating profit before depreciation, amortization, impairment and cost of early retirement program of EUR 149 million. The company announced restructuring measures for 2011, in order to increase its efficiency and to reduce costs. It paid EUR 16.1 million for the early retirement program last year. The 2011 revenues were down by 8 percent on the year before, but the drop slowed down in the fourth quarter of the year. “The main areas where reductions were made were personnel expenses, due payments and other services, Overall we can say the fourth quarter had better results than the previous,” said Stefanos Theocharopoulos, general manager of Romtelecom. Theocharopoulos speaks about the difficult economic context, which is continuing in 2012. Romtelecom's staff base was down by 1,700 people last year, through voluntary and involuntary redundancies. “This year, we will focus on offering packages instead of separate services, which is probably the biggest change in Romtelecom's commercial strategy over the last year,” he went on. Romtelecom paid EUR 10.5 million for the acquisition of Boom and Akta last year, taking over their assets and customer bases. The company is currently subject to a custom authorities' audit focusing on import transactions during 2007-2009. A final decision of the customs authorities on this issue is expected within 2012. Overall, the OTE group posted a loss of EUR 13.1 million last year, a significant reduction compared to the EUR 139 million loss in 2010. Romania is the second largest market for OTE, with revenues from external customers of EUR 1 billion, after home country Greece, with EUR 3.4 billion. OTE owns several companies in Romania: Romtelecom, mobile telephony operator Cosmote and retailer Germanos. Romtelecom and Cosmote have lined up for merger. The CEO of Cosmote Stefanos Theocharopoulos took over at the helm of Romtelecom mid-2011. Talks are also ongoing over listing Romtelecom on the stock exchange. The Romanian state has a 46 percent stake in the landline operator. editor@romania-insider.com