Lithuania, Markets and Companies, Technology, Telecomunications

“The company’s revenue has finally increased. However, that increase was very small and, as compared to the biggest telecommunications and IT market players, it was the smallest. On the other hand … the cost of goods and services rose steeply. This, coupled with an increase in labor costs, dampened the company’s profitability and … Teo LT was the only one to record a decrease in EBITDA whereas other market players posted increases. In general, the situation has improved but not as much as it might seem at first sight,” Arvydas Jacikevicius, chief broker with SEB Bankas, told BNS.

“It’s still a very long way to go before the company gets back to its previous level of performance and the results of any one quarter should not be relied upon as an indication of solid future performance,” the analyst added.

Telecommunications operator Tele2 last year saw its revenue grow by 8.9% to 164.5 million euros, from 151.1 million euros in 2014. Omnitel, the mobile operator controlled by Teo LT, posted 137 million euros in revenue for 2015, a rise of 7.2% from 2014. Bite Lietuva, a yet another mobile operator, has not yet released its results for full 2015.

“As far as revenue is concerned, the situation of Teo LT has improved. The continued decrease in revenue from voice telephony does not surprise anyone but the growth of revenue from IT services looks good and it basically offsets the decline in voice telephony revenue. To sum up, the performance of Teo LT should be described as positive. We got used to hear about revenue declines and now it is growing, which is encouraging,” Domas Klimavicius, a broker with Siauliu Bankas, told BNS.

Jacikevicius also pointed out that Teo LT had managed to increase its pay TV market share to 35%, which was a positive development. He noted, however, that the revenue generated from those services accounted for just 10% of the company’s total revenue.

In 2015, consolidated sales revenues of Teo LT rose by an annual 1.1% to 204.598 million euros. Consolidated net profit grew by 10.2% to 34.176 million euros.