PT’s 4Q sales up 10%; offers USD3.6 billion to investors as defence against hostile bid

7 Mar 2006

Portugal Telecom’s revenues in the fourth quarter of 2005 rose 10% year-on-year to EUR1.72 billion (USD2.07 billion), aided by growth at its Brazilian mobile joint venture Vivo. EBITDA increased 27% to EUR710 million, net profit jumped EUR240 million to EUR293 million due to one-time asset disposal gains and pension refunds, while net debt rose to EUR3.67 billion from 3.57 billion a year earlier. Telecom’s fixed line customers rose 2.3% y-o-y to 4.478 million, helped by ADSL growth. Average revenue per fixed line user in 4Q fell to EUR32.5 from EUR34.9 a year earlier, due to declining call traffic, fixed-mobile substitution and rising competition. Pay TV customers were down by 6,000 over the quarter to 1.478 million. Net profit for full-year 2005 was EUR654 million, up 4.7% from EUR623 million in 2004. Following the recent EUR11.2 billion takeover bid from Portugese conglomerate Sonae, PT plans to pay its shareholders EUR3 billion (USD3.6 billion) in dividends as part of a defence against the ‘hostile’ offer. PT’s board yesterday told its investors to reject Sonae’s offer of EUR9.5 per share, labelling it as low and insecurely funded.

Portugal,PT Portugal (MEO),

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