Feb. 14 (Bloomberg) -- T-Hrvatski Telekom d.d., Croatia’s biggest phone company and a unit of Deutsche Telekom AG, said profit fell for a third year in 2012 as Europe’s debt crisis hurt the domestic economy.
Net income dropped 6.4 percent to 1.7 billion kuna ($300 million), it said in a regulatory statement today. Revenue declined 7.6 percent to 7.4 billion kuna, while earnings before interest, taxes, depreciation and amortization fell 8 percent to 3.3 billion kuna.
“We witnessed a very challenging year in 2012, with the economic environment deteriorating more than previously anticipated,” Chief Executive Officer Ivica Mudrinic said in the statement. “The residential and corporate sectors tightened spending still further and the public sector delayed investment in IT.”
The company, in which Deutsche Telekom holds a 51 percent stake, is expanding its Internet, pay TV, and mobile-phone services to prop up its business as Croatia struggles to emerge out of its second recession in two years. The government said in November the economy will grow 1.8 percent this year, while the International Monetary Fund this month predicted stagnation.
Management proposed a dividend payout of 20.51 kuna per share, Mudrinic said.
“Looking ahead to 2013, we remain highly cautious and expect the difficult economic environment to continue,” Mudrinic said, adding this year’s results are “set to reflect this sentiment and will focus on further cost discipline.”
The company will come under additional regulatory and competition pressure after Croatia joins the European Union in July, Mudrinic told reporters in Zagreb today. T-Hrvatski Telekom expects increased capital investment this year and it is monitoring investment opportunities in the region, he said.
The company has signed a new collective agreement with unions which will remain in force through July 2014, he said.
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