Netia clips into the red

Many analysts had expected Netia - the country's second-biggest phone operator - to post a net profit of around zł.13 million. First-quarter sales climbed slightly to zł.218 million from zł.217 million in the same period last year, but remained well below an expected zł.229 million.

The company said that the results represented only a temporary blip due to investments in WiMAX and UMTS, and added that revenues will increase by more than 10 percent in 2007 and 2008. However, the company admitted that it is likely to remain in the red for the whole of this year. Following the announcement, shares in the group fell sharply, dropping 8.2 percent to a one-month low of zł.5.05.

"The results were really disappointing, and far below even the most conservative estimates," said Krzysztof Kaczmarczyk, analyst at DB Securities. "We think Q1 results herald a prolonged period of disappointing performance."

However, at the end of Q1 the company also had zł.293 million to spare, which it plans to invest in WiMAX, its mobile operator and acquisitions. (Reuters)