Telekom Austria AG

euro adhoc: Telekom Austria AG
Quarterly or Semiannual Financial Statements
Telekom Austria Group: Results for the Financial Year 2003 (E)

--------------------------------------------------------------------- Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement. --------------------------------------------------------------------- Vienna, March 24, 2004 -- Telekom Austria AG (VSE: TKA; NYSE: TKA) today announced its results for the Financial Year 2003 and the fourth quarter ending December 31, 2003. During 2003 total group revenues increased by 1.6% to EUR 3,969.8 million. Starting from October 1, 2003 an Austrian court decision led us to change the accounting for third party value added services revenues from a gross to a net basis of revenue recognition, which led to a decline in revenues and costs without impacting adjusted EBITDA. Applying this change also to prior periods, revenues show an increase by 1.9% to EUR 3,923.9 million during 2003. Adjusted group EBITDA rose for fiscal year 2003 by 3.1% to EUR 1,509.8 million. The wireline segment was successful in slowing the rate of decline in revenues compared to prior periods; adjusted EBITDA was still impacted by the accelerated headcount reduction in spite of substantially lower operating costs. The wireless segment benefited from the improvements in 4Q 03 compared to last year and increased revenues and profitability in all its activities during 2003. The increased profitability and lower depreciation, amortization and impairment charges led to an increase in total annual operating income by 35.4% to EUR 369.8 million. Consolidated net income of Telekom Austria rose from EUR 12.8 million to EUR 134.2 million and includes a gain of EUR 18.4 million from the sale of a 26% interest in Herold Business Data AG, the leading Austrian telephone directory provider. Earnings per share improved from EUR 0.03 to EUR 0.27. Capital expenditures fell by 10.1% to EUR 595.3 million during 2003, including the impact of the non-cash effect of adopting SFAS 143, amounting to EUR 6.6 million. Excluding the impact of SFAS 143 the decline amounts to 11.1% to EUR 588.7 million. Quarterly figures show an increase in group revenues by 1.0% to EUR 1,018.5 million in 4Q 03. Applying also to 4Q 02 the change in the accounting for third party value added services revenues, as per October 1, 2003, 4Q 03 revenues increased by 2.6%. Adjusted EBITDA rose by 7.9% to EUR 307.1 million during 4Q 03 which together with lower depreciation, amortization and impairment charges led to the turnaround in group operating income to EUR 14.2 million during 4Q 03 compared to EUR (81.1) million during the same period last year. Net result improved from a loss of EUR (99.2) million to a loss of EUR (21.2) million. Group capital expenditures declined by 12.2% to EUR 255.9 million. Net debt continued to decline during 2003 as a result of strong cash flows. Total net debt fell to EUR 2,637.3 million at the end of December 2003, compared with EUR 3,204.2 million at the end of December 2002, in spite of the financing of the EUR 69.7 million acquisition price to increase the stake in VIPnet from 71% to 99%. Based on these results, the management board of Telekom Austria will recommend to the annual general meeting (AGM) the payment of a dividend in the amount of EUR 0.13 per share. Telekom Austria is currently authorized by the AGM to buy back up to 50 million shares at a price between EUR 9 and EUR 15 until December 3, 2004. Today the board of Telekom Austria announced that it intends to make use of this authorization. Following the first repurchase, which happened on February 27, 2004 through an off-market transaction, there are currently up to EUR 270 million of reserves available for further buybacks. At yesterday's closing price of EUR 11.35 this would amount to approximately 23.8 million shares or 4.8% of Telekom Austria's outstanding share capital as per Dec. 31, 2003. Telekom Austria intends to execute the share repurchases through market transactions and to limit such purchases so that the holding of our principal shareholder ÖIAG does not exceed 50% of our outstanding shares. Outlook: Growth rates in the Telekom Austria Group are likely to level out during 2004. This translates into an estimated increase of 0% to 1% in group revenues and 1% to 2% in adjusted EBITDA for 2004. The resulting slight improvement in margins reflects the steady focus on cost reduction measures in all areas of the company. Growth in adjusted EBITDA and a further decline in depreciation and amortization are expected to lead to an above average rise in net income by substantially over 10%. At present budgets do not include the impact of the planned changes in Austrian corporate taxation law, as the full details of the proposed amendments are not known yet. All financial figures are based on U.S. GAAP. Further information please find on the website www.telekom.at. end of announcement euro adhoc 24.03.2004 --------------------------------------------------------------------- Further inquiry note: Martin Bredl Head of Public Relations Phone: +43 (0)59059 1-11001 mailto:martin.bredl@telekom.at Hans Fruhmann Head of Investor Relations Tel.: +43 (0) 59059 1-20917 mailto:hans.fruhmann@telekom.at Branche: Telecommunications Equipment ISIN: AT0000720008 WKN: 720008 Index: ATX, ATX Prime, WBI Börsen: Wiener Börse AG / official dealing New York / official dealing

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