RPT-Telefonica O2 Czech H1 profit jumps 14 pct

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By Martin Santa

PRAGUE, July 26 (Reuters) - Net profit at Telefonica O2 Czech Republic jumped 14.2 percent in the first half as growing broadband Internet revenue helped a recovery in the Czech phone operator's fixed-line business.

The fixed and mobile services company, rebranded from Cesky Telecom last year and majority owned by Spain's Telefonica, said on Thursday its first half net hit 4.89 billion crowns ($238.8 million), beating the average forecast of 4.75 billion crowns in a Reuters poll of eight analysts.

Revenue rose 3.2 percent to 31.07 billion crowns against an average forecast of 30.85 billion.

"Consolidated revenues grew once again, owing not only to the traditionally strong performance of the mobile segment, but also a reversal of the trend in the fixed line segment," Telefonica O2 Czech Chief Executive Officer Salvador Anglada said in a statement.

He said revenue from broadband Internet and from IT and services were at the heart of the fixed line recovery, offsetting a 17.2 percent fall in fixed line accesses as customers increasingly use mobile services.

Total business revenues in the fixed line segment edged up by 0.3 percent year-on-year to 15.1 billion crowns in the first six months of the year. For the second quarter alone, the segment was up 0.7 percent on an annual basis.

"This is an impressive achievement (the revenue increase in fixed line), as many other incumbents continue to see a decline in fixed line revenues," said Vera Sutedja, an analyst with Erste Bank in Vienna.

Operating income before depreciation and amortisation (OIBDA) fell 2.2 percent to 14.18 billion crowns compared with market expectations of 14.22 billion.

The fall was expected due to higher marketing costs and expansion in Slovakia, where Telefonica O2 rolled out mobile operations in February and introduced post-paid services in May.

The firm also maintained its full-year 2007 guidance for group revenue to rise 1 to 3 percent year-on-year, while OIBDA should decline between zero and 1 percent.

The results were released after Telefonica shares closed down 0.8 percent at 586.6 crowns, beating the broad PX index which ended down 2 percent.