Portuguese telecoms company NOS reported a 15% drop in first-quarter net profit on Wednesday as consumption costs rose after major investments to bring its high-speed 5G network to nearly everyone in Portugal.
NOS, whose businesses include cable TV and cinemas, made a net profit of 34.9 million euros ($38.55 million) between January and March.
Consolidated revenue increased 2.2% to €381.4m in the first quarter compared to a year earlier, of which €369.2m came from the company’s core communications business.
As the company invested €496m in 2022 and €97m in the first quarter, mainly in its 5G wireless network, depreciation costs increased by 15% to €480.9m between January and March.
Its 5G network covered 88% of Portugal’s population in March, NOS reported, which a year ago was in the early stages of rolling out the new technology.
The results were “very consistent, reflecting operational growth” with additional investments in innovation and partnerships “that will help materialize the opportunities that 5G presents to businesses and families,” CEO Miguel Almeida said.
“The decline in net income reflects, in addition to the inflationary context, the impact of this strong investment on the assessment of the technological transformation in Portugal,” he said in a statement.
Operating costs rose 7% year-on-year to €869.9m in the first quarter, due to runaway inflation.
Combined earnings before interest, tax, depreciation and amortization (EBITDA) increased 8.8% to 173.5 million euros, the company said, while EBITDA margin — a key measure of profitability — improved 2.8 percentage points to 45.5%.
NOS added 388,200 mobile customers over the previous year, for a total of about 5.8 million at the end of March, and its Revenue Generating Units (RGUs) – individuals or businesses – increased by 4.8% to 10.87 million.
($1 = 0.9052 euros)
