Netia Cuts 2014 Sales Forecast as Profit Misses EstimatesMarta Waldoch and Konrad Krasuski
Netia SA, Poland’s second-largest fixed-line phone company, cut its 2014 sales forecasts after posting the lowest quarterly profit since 2012.
The Warsaw-based operator decreased its full-year sale target 3.4 percent to 1.68 billion zloty ($528 million) as net income fell 3.3 percent to 8.3 million zloty in the second quarter from a year earlier, it said in a regulatory statement. The mean estimate in a Bloomberg survey was 12.1 million zloty.
“Our new forecast is conservative but realistic,” Chief Executive Officer Adam Sawicki said before a news conference in Warsaw today. “We are investing in new services and I think we are doing our best in these tough market conditions.”
The Polish telecommunication companies have seen their earnings deteriorate in past years as competition increased and the domestic regulator demanded operators to lower prices. Netia’s biggest domestic competitors are units of Orange SA and Deutsche Telekom AG.
Netia shares slumped 4.2 percent to 5.72 zloty as of 11:48 a.m. in Warsaw, falling the most in three months and valuing the company at 2 billion zloty.
Netia, whose second-quarter sales shrank 12 percent to 422.2 million zloty, has seen its revenue falling for the last year and a half. The operator plans to cut costs by 50 million zloty in the next 12 months by reducing management structure among other initiatives, it said today. The new program will cut costs “substantially” already in the second half of 2014.
Chief Financial Officer Jon Eastick will resign as of Aug. 31 and will be replaced by Pawel Szymanski, who previously worked for property developer Marvipol SA and oil refiner PKN Orlen SA, the company said today.