In 2017, Telekom Serbia generated a net profit of 14.5 billion dinars, which is 650 million dinars less than in 2016.
However, due to the fact that, at the end of 2017, the dinar appreciated against euro much more than a year before, the profit expressed in euros was identical to the previous year, i.e. 12.3 million euros.
However, Telekom’s balance sheet does not give many reasons for optimism. The operating revenues of the largest telecommunication company that is majority owned by the state amounted to 85.8 billion dinars last year, which is 1.25 billion dinars (about 10 million euros) less than in the previous year.
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Revenues from the sale of products and services were down by 1.6 billion dinars in 2017. The largest part of this decrease in revenues is fixed-line revenues, which were down by 2.5 billion dinars last year relative to the year before. Otherwise, out of a total of 29.8 billion dinars of ground telephony revenues, close to 15 billion refers to a monthly subscription, while only about 5 billion dinars is due to the realized traffic, that is, telephone conversations. On the other hand, the decline in fixed income was not offset by the growth of revenues in mobile telephony, which remained at the level of 41 billion dinars, just like in 2016. Telekom recorded revenue growth of one billion dinars in the Internet services and multimedia, that is IPTV.
At the same time, with the decline in revenues, business expenses increased. In 2017, they amounted to 73.5 billion dinars, and in 2016, 72 billion. The operating profit was down by 2.8 billion dinars at the end of 2017, relative to 2016.
The good news is that Telekom reduced its total liabilities by 1.5 billion dinars, primarily by reducing liabilities to foreign partners, Ericsson and Huawei. On the other hand, Telekom increased indebtedness with domestic banks from 10.3 billion (88.3 million euros) to 11.8 billion dinars (100 million euros).
Also, according to the cash flow report, Telekom invested less last year then in 2017, i.e. almost 20 million euros or 2.3 billion dinars. On the other hand, the national telecommunications operator has invested a lot of money in the acquisition and recapitalization of other companies. Thus, during last year, Telekom Serbia bought an 81.2 percent share in the YUnet International Company for about 4 million euros. This company was majority-owned by Astra Bank, which has declared bankruptcy and is managed by the Deposit Insurance Agency. Telekom bought a 62.2 percent share in YUnet from AOD for 375.6 million dinars, and subsequently another 19 percent of shares from several natural persons for 111 million dinars in total. Interestingly, the remaining 17.8% of shares are owned by the brothers Karic (Bogoljub, Zoran and Sreten), so the state has again partnered with the Karic family in telecommunications after being at odds following the sale of Mobtel. Otherwise, YUnet is entitled to use the Eunet brand, despite this company being bought by Telekom’s main competitor, SBB in 2015.
Telekom also recapitalized GO4YU company with 100 million dinars and thus became the owner of 83.57 percent of the company, while the co-owner is registered in Hong Kong. They also recapitalized the MTS bank with around 4 million euros in 2017 and have further increased their capital in the company MTS Kosovska Mitrovica by 2 million euros.
In 2017, Telekom paid 11 billion dinars for dividends, compared to 12.25 billion paid out a year earlier. At the same time, the company paid 1 billion dinars in corporate tax last year. On the other hand, the subsidiaries of Telekom, primarily Telekom Srpske, paid 2.6 billion dinars in corporate tax last year. Income from profit in 2017, which will be paid this year, is much lower, amounting to about 1.6 billion dinars.
In June and July 2017, Telekom Srbija obtained a loan in the total amount of EUR 157 million from Societe Generale, UniCredit, Vojvodjanska Bank, Banca Intesa and Raiffeisenbank with the three-year-maturity. Telekom used a total of EUR 112 million from the loan by 31st December, 2107, while 45 million euros are still available. Otherwise, the interest rates on these loans range from 1.25 to 2.3 percent + EURIBOR rate. The interest rates on loans without foreign currency clause range from 0.09% to 0.5% plus BELIBOR.
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