UPDATE 1 - Croatia's Hrvatski Telekom 9-mo cons net profit drops slightly

The drop in net profit is due to higher depreciation and amortisation driven by increased infrastructure investments, increased asset value adjustment primarily related to increased value adjustment of receivables as a result of market influences and financial expenses related to foreign exchange differences, Hrvatski Telekom (HT) said in a statement.

Total consolidated revenues increased 11.6% year-on-year to 5.8 billion kuna in the nine months through September.

Revenues from mobile telecommunications services rose 17.0% on the year to 2.5 billion kuna, while fixed-line services suffered a 2.6% drop in revenue to 707 million kuna.

EBITDA before exceptional items increased by 11% year-on-year to 2.3 billion kuna in January-September. EBITDA margin was 40.5%, down from 40.7% last year.

HT's mobile customer base decreased by 1.5% on the year to 2.297 million customers at the end of the third quarter of 2017, mainly as a result of prepaid underperformance.

The number of postpaid customers increased by 8.2% on the year as a result of an overall push of successful and attractive tariffs and handsets, the company said.

At the end of September, HT had 885,000 fixed mainlines, down 5.3% on the year. The decline was driven by the market trend of migrating from fixed to mobile and IP substitution, regulations and competition.

The telco's broadband customer base was higher by 2.1% in the comparison to the end of the third quarter of 2016, at 624,000.

TV customer base expanded by 4.8% to 413,000 at the end of September, as a result of continuous service and programme offer improvements through premium content and enriched exclusive TV content.

In January 2017, Hrvatski Telekom strengthened its position on the regional telecommunications market after it acquired a majority shareholding in Montenegro's Crnogorski Telekom AD Podgorica.

Compared to the same period in 2016, HT's capex realisation in the nine months of 2017 increased by 28%, including Crnogorski Telekom’s contribution. Excluding that contribution, capex realisation has increased by 18.1% on the year to 1.2 billion kuna.

Hrvatski Telekom is 51%-owned by Deutsche Telekom.

(1 euro=7.51541 Croatian kuna)