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Netia Sinks Most in 10 Years on Sales Drop Outlook: Warsaw Mover

Netia SA plunged the most in almost 10 years after Poland’s second-largest fixed-line phone company said revenue will drop next year and that it may post a net loss in 2012.

The shares slumped 16 percent to 4.23 zloty at the close in Warsaw, the biggest drop since February 2003. Trading volume was 359 percent of the three-month daily average, data compiled by Bloomberg show.

Revenue will probably drop 9.4 percent next year to 1.9 billion zloty ($612 million), the Warsaw-based company said in a regulatory statement late yesterday. Netia may write down the value of its fixed assets in the fourth quarter, bringing its full-year 2012 result to a net loss, the company said.

Netia’s guidance is “discouraging” and highlights the “effects of worsening economic conditions” on phone companies, Igor Semenov, a Moscow-based analyst at Deutsche Bank AG, said by phone today. “Aggressive price wars do not help revenues. Management should focus on returns and efficiency rather than gaining market share.”

Falling Valuation

The company’s shares have tumbled 20 percent in 2012, compared with a 20 percent increase by the WIG20 Index of the country’s largest and most liquid companies.

Netia bought Telefonia Dialog SA and Crowley Data Poland Sp. z o.o. last year to strengthen its position on the country’s fixed-line phone market, dominated by Telekomunikacja Polska SA. The company’s number of clients will drop to 2.65 million on Dec. 31 and remain at this level next year, Netia said in a statement. The company had 2.73 million clients, including 889,000 broadband users, on Sept. 30.

France Telecom SA’s Telekomunikacja said on Oct. 17 its sales may drop from 4 percent to 5 percent this year, more than an earlier forecast of a 3 percent decline on increased competition. Its shares fell by a record 14.8 percent that day.

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