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2018/02/26 / Erste Group Research

Credit Report | Telekom Austria

Telekom Austria (Baa2 positive /BBB positive) has continuously improved its credit metrics since the peak in. TKA cut its debt payoff period from 3.2 years in 2013 to 1.7 years in 2017. Interest coverage ratio improved from 5.9x to 14.7x. The gearing also fell continuously since 2013, reaching 79.4% in 2017.

In FY 2017 TKA further strengthened its position on the basis of M&A activities (in Belarus and Croatia, among others).

Telekom Austria generated another positive FCF after dividends in 2017 (according to Erste Group Research definition) of EUR 237.5mn (2016: 304.7mn). The fact that the company exercised its calling right for its only hybrid bond outstanding at the initial call date (1 February 2018) confirms the improved balance sheet structure.

Management expects revenues to grow by 1-2% y/y in 2018. Capex is estimated to amount to EUR 750mn.
We regard TKA bonds as relatively expensive in a peer group comparison at the moment.

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General information

AuthorErste Group Research
Product nameCredit News
Topic in focusCredits/ Corporate bonds
Economy in focusAustria
Currency in focusEuro
Sector in focus-


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