Elektrim license news gives Netia shares boost
Investors got only one surprise when independent telecom operator Netia released its third-quarter results last week and it had nothing to do with the numbers.
While going through Netia's results on a conference call last Wednesday with CEO Meir Srebernik, one analyst broke the news that the company's chief rival in Poland, Elektrim, had pulled out of the tender for a long-distance license. Jan Sudol, a telecom analyst with Donaldson, Lufkin & Jenrette in London, was reading his Bloomberg screen when the Elektrim announcement crossed, and he promptly informed everybody on Netia's conference call.
"The mood (of the conference) was already upbeat even before the news broke," Sudol said.
But he said the surprise resignation of one of Netia's arch competitors in the battle for long-distance licenses served to enliven the atmosphere even more. The third-quarter results, coupled with the Elektrim news, helped boost Netia shares 10.8% from when the stock opened Wednesday to its close Thursday of $14.825.
The company, Poland's largest independent telecommunications provider, reported a net loss of zl. 426.9 million ($101.6 million) in the first nine months of 1999, up 150% from the zl. 171.9 million ($40.9 million) in losses made during the same period in 1998. This news was met by yawns from the gathered investors, for whom the losses by a company just starting to expand in the capital-heavy business of telecoms buildout were "totally expected," Sudol said.
Netia's revenue doubled to zl. 161.8 million ($38.5 million) during the first nine months of 1999, from zl. 79.6 million ($19 million) during the same period in 1998, the company said. It also increased its subscriber lines by 80%, to 214,242 from 119,645 in September 1998.
