Portugal's NOS says profits dip as costs rise

LISBON, July 21 (Reuters) - Portuguese telecoms company NOS reported a 4.4% dip in its second quarter net profit, pressured by operating expenses despite an increase in revenue and customers, the company said.

NOS, whose businesses include cable television, posted a net profit of 43.3 million euros ($51.06 million) between April and June, up from 30.5 million euros in the previous three months but down from 45.3 million euros a year ago.

The company said profit was affected by a rise of 14.2% in operating expenses to 186.6 million euros in the second quarter, mainly due to the payment of premium sports content this year. In April and May 2020, NOS benefited from a suspension of payment for that content due to the start of the pandemic.

Despite the COVID-19 pandemic, which continues to limit travel and impact the company’s lucrative roaming revenues, telecom revenues increased 5.3% to 336.7 million euros in the second quarter from the same period last year, NOS said.

Total consolidated revenues grew 6.2% to 341 million euros in the second quarter.

NOS added 215,000 new mobile telecoms customers from a year ago to a total of 5.08 million at the end of June and its revenue-generating units - either individuals or businesses - rose by around 2.6% to more than 10 million, it said.

In a statement, chief executive Miguel Almeida said that more than a year since the pandemic started, “severe effects of the lockdown are still being felt in companies, employment and consumption... but NOS continues to respond in an exemplary manner to the enormous challenges”. “The context will remain challenging,” he said.

NOS said its consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) contracted 2.2% to 154.4 million euros. EBITDA of its telecommunications segment decreased 5.0% to 144.9 million euros and the EBITDA margin fell 4.7 percentage points to 43%.

NOS’s capex, excluding leasing contracts, increased 16.5% to 200 million euros over the first-semester period while net debt fell 11.3% to 895 million euros.

$1 = 0.8481 euros Reporting by Sergio Goncalves;Editing by Elaine Hardcastle