Reuters: Hot Stocks: UPDATE 2-Poland's TPSA cushions profit fall with cost cuts

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UPDATE 2-Poland's TPSA cushions profit fall with cost cuts Oct 22nd 2013, 07:48 Share this Email Print Reprints Tue Oct 22, 2013 3:48am EDT * Q3 net profit down 22 pct vs 61-pct fall seen by analysts * Polish Orange unit raises FY 2013 organic cash flow goal to 1 bln zlotys * Shares jump, lead Warsaw blue-chip gainers (Adds market reaction, analyst comment) WARSAW, Oct 22 (Reuters) - Cost cuts helped Poland's No.1 telecom operator TPSA book a smaller-than-expected fall in third-quarter net profit and raise the group's full-year cash flow target, the Orange unit said on Tuesday. Shares in the former communist monopoly jumped by around four percent in early Warsaw trade, after TPSA said its net profit slid 22 percent to 239 million zlotys ($78.3 million), compared with 119 million seen by analysts polled by Reuters. Since the group issued a profit warning a year ago, it has cut jobs and warned of a deep fall in 2013 revenue. Its market value has fallen by almost half to $3.7 billion. Third-quarter revenue fell by almost eight percent to 3.2 billion zlotys, a notch better than the 9-percent dip seen by analysts. "Sales costs lower by around 90 million zlotys than we expected were the reason for the higher margin," DM PKO BP analyst Wlodzimierz Giller said in a research note. "Results proved better than expected, but they don't point to a change in mid-term negative perspectives for the business and that's why we maintain our negative recommendation for TPSA," he added. An economic slowdown in Poland, which is Orange's biggest foreign market, has combined with mounting competition for customers to push telecoms sector revenues down. Price wars chipped away at TPSA's client base, eroded profits and led to a change at the helm, with Bruno Duthoit replacing the long-serving Maciej Witucki last month. The new chief executive told Reuters he would focus on controlling costs while seeking to stop the slide in revenues. The group said it raised its full-year organic cash flow target to at least 1 billion zlotys from 800 million seen earlier. ($1 = 3.0513 Polish zlotys) (Reporting by Adrian Krajewski; Editing by David Cowell) Link this Share this Digg this Email Reprints

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