The state owned telecoms giant Cyta reported a 7% increase in revenue last year to EUR 484.32 mln compared to EUR 454 mln in 2007, while net profits climbed 27% YoY to EUR 102.96 mln in 2008, from EUR 81.24 mln reported in 2007.
Outgoing chairman Stavros Kremmos, whose term of office ends later this month together with all other semi-government organisations, said 2008 was an extremely productive year, with the organisation recording a satisfactory increase in revenue, while keeping cost increases in check.
“We managed to report a good set of results, reduced charges for our customers and increased the quality and diversity of our product range, while continuing with our strategic investments,” Kremmos said.
He paid particular attention to the two major agreements that Cyta negotiated with Egypt and Syria with respect to participation in under-sea communication cables, as well as the expansion drive into Greece.
Asked by the Financial Mirror on the state of operations abroad, Kremmos said the total losses from overseas operations amounted to EUR 10 mln in 2008, of which EUR 4.5 mln alone related to the operations in Hungary, while the rest was from operations in the U.K. and Greece.
“Cyprus is a small place and we have no other choice but to expand abroad. Mistakes and sometimes losses are likely to occur, but we are determined to succeed in Greece where our investments so far have reached EUR 55 mln,” he said.
Dividend
Cyta paid a dividend of EUR 76.9 mln to its sole shareholder, the Cyprus government in 2008, with Kremmos adding that in the last six years, the total contributions to state coffers have amounted to EUR 450 mln.
Cyta has also channeled EUR 140 mln to fund its staff pensions liabilities which is growing considering that one third of the organisation’s balance sheet, or EUR 323 mln is held in low-yielding bank deposits.
Kremmos and fellow board members as well as Cyta’s management have resisted attempts to invest in higher yielding financial assets, fearing that any decline in value will lead to criticism.
DSL
Kremmos defended Cyta’s provision of DSL high-speed internet connections, claiming that even though compared to other EU countries, the level of fees were high, the gap in DSL use is closing thanks to Cyta’s efforts to broaden the reach of DSL services to all urban and rural areas.
“We cannot lower our charges as fast as we want to since we need the approval of the Telecom Regulator, who insists on Cyta presenting its costs and marking up at an agreed profit to fix its retail pricing,” said Kremmos.
Nevertheless, informed sources at Cyta told the Financial Mirror that additional reductions in DSL fees and increased bandwidth were in the pipeline and would be announced soon.
Cyta’s annual report reveals that the total revenue amounting to EUR 484.3 mln is made up of EUR 123 mln from fixed telephony (2007: EUR 126.3 mln), EUR 226.9 mln from mobile telephony (2007: EUR 219.1 mln) and EUR 134.5 mln from other services (2007: EUR 108.1 mln).
