February 19, 2014 / 8:47 AM / 5 years ago

UPDATE 1-Portugal Telecom Q4 profit drops 35 pct

* Net profit 25.9 mln euros vs 21 mln analyst forecast

* EBITDA down 6 pct, revenue down 3 pct

* PT in tie-up with Brazil’s Oi (Adds quotes, detail)

LISBON, Feb 19 (Reuters) - Portugal Telecom (PT) reported a 35 percent fall in quarterly net profit on Wednesday, hit by tough competition in an anaemic domestic market and weighed down by foreign exchange losses and restructuring costs in Brazil.

Despite a fledgling economic recovery in Portugal, the corporate segment of the domestic market was still affected by cost cuts at companies and state institutions and results suffered from “intense price competition across the various segments, mainly in mobile”, PT said.

A bright spot was revenue in the residential segment, which grew 1.4 percent despite lower prices.

Net profit fell to 25.9 million euros ($35.6 million) in the last quarter of 2013. Analysts surveyed by Reuters had forecast profit of 21 million euros on average.

Revenue fell almost 3 percent to around 736 million euros, the company said, while earnings before interest, taxes, depreciation and amortization (EBITDA) fell about 6 percent to 281 million euros.

PT’s profit for the full year jumped 47 percent to 331 million euros after the sale of its stake in Brazilian telecom company CTM and other one-off gains. EBITDA fell 10 percent.

PT is merging with Brazil’s Grupo Oi, in which it holds a large stake, creating a company with more than 100 million subscribers.

Revenue and EBITDA were reported under the new European IFRS11 accounting standards, which calculates PT’s interest in Oi by the equity method. Under the traditional standard, revenue in the fourth quarter totalled 1.44 billion euros, almost 11 percent lower than a year ago but slightly above market expectations. ($1 = 0.7272 euros) (Reporting By Andrei Khalip; editing by Tom Pfeiffer)

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