Telekom Austria AG, one of two European phone companies part-owned by Carlos Slim’s America Movil SAB, forecast a fifth consecutive year of falling sales in 2013 and withheld predicting profit amid rising competition.
Revenue will decline to about 4.1 billion euros ($5.4 billion) this year, Vienna-based Telekom Austria said today in a statement. That compares with a forecast for 2012 of 4.2 billion euros. The company plans about 700 million in investments and a dividend of 5 cents a share for last year and 2013.
Management expects “the challenges which characterized the operational environment during 2012 to continue to dominate the development in 2013,” the company said. “Due to continued low visibility in its major markets, Telekom Austria Group considers it prudent to limit the financial outlook for 2013 to revenue and capital expenditure.”
The company, which completed a 390 million euro deal a week ago to acquire 750,000 prepaid clients from Orange Austria, hasn’t boosted revenue since 2008. Saturation of mobile-phone markets in Austria and eastern Europe, where it operates networks in seven countries, has increased, prompting the company to change strategy.
Telekom Austria fell as much as 2.9 percent to 5.66 euros, the biggest intraday drop since Nov. 30, and was trading down 1.8 percent at 9:17 a.m. in Vienna. The stock has declined 34 percent in the past 12 months, valuing the company at 2.53 billion euros.
The phone-network operator will “focus on the high-value customer segment in its mature mobile markets,” Telekom Austria said, adding that the new focus “will impact margins in the short term.”
Telekom Austria twice reduced investor payout plans for 2012. The company originally set a dividend of 76 cents a share before lowering it to 38 cents a share and then to 5 cents.
The 2013 revenue forecast is in line with analysts’ predictions, according to 15 estimates compiled by Bloomberg.
Telekom Austria, which reports full-year 2012 earnings on Feb. 28, had forecast that earnings before interest, taxes, depreciation and amortization last year would total 1.4 billion euros to 1.45 billion euros. Analysts expect the company to report sales of 4.26 billion euros and Ebitda of 1.42 billion euros for 2012, according to estimates compiled by Bloomberg.