Q1 2010 brings weaker profitability for Eurotel and Tell

2010-05-27

Eurotel, the chain of shops selling services of the Era mobile network, reported weaker results in Q1 2010 – net profit went down by PLN 0.5m (€0.12m) year on year to PLN 0.7m (€0.17m), while sales revenues totalled to PLN 24.5m (€6m) in comparison to PLN 22.8m (€5.5m) in Q1 2009.
Also, Tell, which manages stores offering Orange, Plus and Era mobile network services, reported a decline in net profit from PLN 2.2m (€0.54m) in Q1 2009 to PLN 0.6m (€0.15m) in Q1 2010, while sales revenues grew from PLN 51.6m (€12.6m) in Q1 2009 to PLN 67.1m (€16.3m) in Q1 2010.
Despite the fact that the dealers managed to increase their turnovers, the net profits are lower due to recession on the market as well as changes in the regulations. According to Eurotel, lower profitability is the effect of the modification of the accounting system introduced by Era in 2010. At present, around 30% of the dealer’s revenues depend on several variable factors, which are evaluated by the operator. Era takes into consideration the sales generated by an average store, and Eurotel wants the operator to evaluate each store separately.
In turn, the profitability of Tell was affected by the bankruptcy of Connex, the nationwide wholesaler of mobile phone products that belongs to Tell group.

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