OREANDA-NEWS. The total revenue of TEO Group (hereinafter – “the Company”), the largest provider of integrated telecommunication, IT and TV services in Lithuania, during the first quarter of 2014 amounted to LTL 169.5 million. The Company’s EBITDA margin for the first quarter of 2014 was 38.8 per cent, and net profit amounted to LTL 31.7 million.
 
 Kestutis Shliuzhas, General Manager of TEO
The Company started the first quarter by introducing changes in organizational structure and brand portfolio, upgrading existing services and launching new ones. TEO introduced simpler and easier to use TEO smart television service, which led to record increase in the number of this television customers: over the first three months the number increased by 4.3 per cent, over a year – by 14 per cent. More customers also used upgraded TEO Internet service: including wireless Internet "TEO Wi-Fi" users, over the year their number increased by 13.4 per cent.
 
“Our customers appreciate the upgraded TEO smart television service, its’ user interface as well as new features of TEO Internet. The first quarter of this year has become the start of the Company’s activity changes,” - Kкstutis Љliuћas, General Manager of TEO, said when commenting on the activity results
 
Last year TEO revenue of the first three months was LTL 182.7 million, and net profit – LTL 38.3 million. Over the year, in terms of revenue residential customers’ segment remained almost stable, while business customers’ segment declined by 6.3 per cent. Major negative impact on revenue was from decreasing international business, which decreased by 22.3 per cent was due to lower volume of low margin international transit.
 
Excluding non-recurrent expenses, related to the reduced number of employees, the indicators of profitability and efficiency were increasing. EBITDA margin, excluding non-recurrent expenses, amounted to 43.2 per cent in the first quarter of 2014, while this margin in 2013 was 40.8 per cent. “The efficiency improvement program started in the beginning of the year, and the revision of its organizational structure will make it possible to give more focus to the customers and their needs,” – K.Shliuzhas said.
 
As the efficiency of the Company improved, free cash flow increased by 4.7 per cent. The investors’ confidence was growing, therefore, the value of the company increased as well: TEO capitalization grew by 3.3 per cent.
 
The number of customers using smart and digital TEO TV services at the end of March amounted to 173.7 thousand. TEO Internet access was used by 441.7 thousand customers, including the number of “TEO Wi-Fi” service users. Total number of main telephone lines at the end of March amounted to 552.7 thousand.
 
During the first quarter of this year, the Company's share of revenue from Internet services from total amount of revenue amounted to 27.4 per cent, data communication services and network capacity sales – 11.6 per cent, IT services – 8.4 per cent, and from television services – 8.9 per cent. Share of revenue from voice telephony services from total amount of revenue in the first quarter of 2014 amounted to 40 per cent, and from other services – 3.7 per cent.
 
According to the data of the Communications Regulatory Authority of the Republic of Lithuania, in the fourth quarter of 2013 TEO market share of the Internet access services market in terms of revenue amounted to 43.4 per cent, while in terms of revenue from digital television services – 42.9 per cent. TEO market share in terms of revenue from fixed telephony services in the last quarter of 2013 was 93.9 per cent.
 
The Company has allocated LTL 13.1 million for investment during the first three months of this year. The majority of these investments went to further expansion of the core network and development of the next-generation fiber-optic access network and amounted to LTL 12 million. The investment of LTL 0.9 million was allocated to the development of IT systems.