26th Jun 2006 12:32
Hellenic Telecomms Organization S A26 June 2006 Announcement 54th annual general assembly of shareholders ATHENS, Greece - June 22, 2006 - Hellenic Telecommunications Organization SA(ASE: HTO, NYSE: OTE), the Greek full-service telecommunications provider, todayheld its 54th Annual General Assembly of Shareholders, during which managementreviewed its full-year results fiscal year 2005 and presented its strategicobjectives for 2006. Addressing shareholders, Panagis Vourloumis, OTE Chairman and CEO, stated: "In 2005, OTE posted a consolidated net loss of €216.8 million, while the lossat OTE S.A., the Group's parent company and operator of its Greek fixed-lineoperations, was €237.2 million. This performance is entirely due to the cost ofthe personnel Voluntary Retirement Plan we started implementing last year, anamount of €939.6 million, which under the newly introduced InternationalAccounting Standards was charged to our 2005 financial statements. The actualcost of the Voluntary Retirement Plan, which will be incurred from 2006 through2012, will have no impact on our results for these years. At the EBITDA level, OTE S.A. posted a loss of €279.8 million in 2005, comparedto profit €549.8 million in 2004, while Group EBITDA dropped to €1,131.4 millionin 2005, from €1,681.7 million in the prior year. ITM?A will not pay a dividendfor 2005, as Greek Law precludes loss-making companies from doing so. 2005 was a year of considerable developments, chief among which were: •The May 25, 2005, signing of a Collective Agreement with employee representatives (OME-OTE) abolishing tenure for employees hired after that date. This paved the way for the legislative changes (Law 3371/05) required to make OTE's Voluntary Retirement Plan possible. Out of a total of 5,200 employees qualifying for early retirement under the Plan, 4,859 or 93% of the total opted to leave the Company. Together with employees leaving after completing their years of service, a total of 5,400 people will have retired from OTE S.A. between October 2005 and the end of 2006. Implementation of the plan suffered a six-month delay due to the late signing of required Ministerial Decisions, but it is now on track and 2,132 people had retired under the Plan as of the end of May 2006. The impact of headcount reduction on our operating costs will begin to be felt in the second half of 2006. We are also hiring approximately 1,200 new employees, under common employment contracts, to secure the talent we will need in the future. •Throughout 2005, we intensified the campaign to increase broadband penetration that we had launched in late 2004. As a result, the number of installed ADSL portals rose from about 17,000 in early 2004 to more than 400,000 in June 2006, and operating connections soared from 7,200 to near 300,000 over the same period. This was achieved through an aggressive sales policy, attractive tariffs, and round-the-clock hard work by our engineers and other employees. In addition to investment in materials and network support, the effort includes substantial outlays in promotion. OTE's target is for the number of operating connections to surpass half a million by year end and double that by the end of 2007. Parallel efforts for providing broadband through Wifi-Wimax, or through our subsidiary Hellas Sat, are pursued in locations where conditions suit such solutions. Recently, OTE S.A. also made optical fiber connections available under deeply discounted tariffs in order to promote the use of broadband among students throughout the country. •Finally, the Board of Directors of OTE approved a three-year business plan prepared with the active participation of all Departments. For the first time, the company will be able to work towards specific targets and to accurately measure productivity and personnel performance. The plan provides for a three-year capex budget of €945 million and for the completion of a number of projects aimed at transforming OTE, raising productivity, and reducing costs. Major developments also took place in 2005 in other parts of the Group: •Cosmote assumed responsibility of all Group activities in mobile telephony following the transfer of Globul in Bulgaria and Cosmofon in FYROM, from OTE S.A., and the acquisition of a 70% stake in Cosmorom, subsequently renamed Cosmote Romania. As a result, Cosmote now ranks among the leading European mobile operators. OTE S.A. raised its participation in Cosmote from 58.77% to 64.37% in 2005 and to a two-thirds (67%) majority in 2006. •RomTelecom continued its upward course in 2005, more than doubling profits from €82.3 million in 2004 to €178.4 million last year. Subject to market conditions, RomTelecom is planning an Initial Public Offering on the London and Bucharest Stock Exchanges in 2006, with OTE S.A. retaining its controlling interest. •The other subsidiaries of the Group in Greece and abroad also made further progress in 2005 with the exception of Hellas-Sat, which, despite its substantially improved operations last year, continues to show losses. OTE intends to continue buying out minorities in its subsidiaries and to exitfrom activities which are not core businesses or do not fit with its generalstrategy. Particular attention to training was given in 2005 with the creation of the OTEAcademy, which took over all Group training programs and is also engaging ingeneral educational activities, utilizing the excellent installations of OTE. In 2006 we will pursue our efforts to transform OTE into a modern company ableto compete in liberalized, deregulated markets. A key priority is to upgrade theskills and motivation of all of our employees. We aim to establish anorganization based on merit, to return OTE to a position of technologicalleadership, and to sweep away the remnants of our legacy as a state-ownedagency. Special attention will be paid to the reorganization of OTE Estate, in order toenable it to better exploit our considerable real estate holdings, and of OTEGlobe, which is responsible for the international activities of the Group. The National Telecommunications and Post Commission will continue to have amajor influence on our strategy. Its new leadership justifies on our part adegree of guarded optimism, insofar as it has made possible the beginning of ameaningful dialogue between the Regulator and the leader of thetelecommunications industry. The aim of this dialogue, on OTE's part, is toencourage the development of telecommunications in an environment of healthycompetition, fostering new investments. We are now almost mid-way through 2006 and we should briefly refer to twosignificant developments that took place in the first half of the year. •Cosmote has reached an agreement to acquire control of Germanos S.A. which will give the Group a strong retail organization throughout southeast Europe. The agreement is subject to regulatory approval. •We have launched an international tender for the sale of OTE's 90% interest in Armentel, a transaction which is currently in progress and could bring satisfactory results. The performance of OTE S.A. in the first three months of 2006 was as per ourBusiness Plan. Revenues were marginally better than projected, but costscontinue to resist and their reduction remains a top priority. Management will continue to pursue a constructive relationship with OME-OTE andits newly elected leadership, aimed at updating the General Regulation ofPersonnel. Our sole aspiration, as we enter this new phase of dialogue, is topromote the interests of all employees within a well-functioning, competitiveOTE. In 2005, OTE S.A. embarked on a very difficult task - to reduce permanentheadcount by approximately one third and simultaneously carry through atransformation program and major investments. We have made considerable progressthroughout the year, and in the first months of 2006. None of this could havebeen accomplished without the mobilization and efforts of all OTE employees, towhom we express our sincere appreciation." During today's Annual General Assembly, amendments to articles 1, 2, 6, 9, 10,11, 14, 15, 16, 18, 20, 21, 22, 23, 24, 26, 27, 28, 29, 35, 36 and 37, theabolition of Articles 17 and 38 as well as the new numbering of Chapters C, Dand E (Articles 18 and seq.) and codification thereof have been approved. The Annual General Assembly also approved the re-appointment of three Boardmembers for a three-year term, following the expiry of the terms of equal numbermembers of the eleven-member Board of Directors. They are: 1. Mr.George Bitros is a Professor of Economics and Chair of the Faculty ofEconomic Sciences at the Economic University of Athens. He holds a Batchelor'sdegree from ASOEE and a PhD from the University of New York. He has specializedin microeconomics, industrial organization and cost-benefit theories. He hasauthored a number of books, monographs and papers, published in journals andmagazines of international repute by both foreign and Greek publishers. 2. Mr.Charalambos Dimitriou was born in 1956 in Athens. He is a graduate of theLaw School of the Athens University and also holds graduate degree (L.L.M.) fromthe London School of Economics. He was admitted to the Athens Bar in 1981 and isadmitted to the Athens Court of Appeals as well as the Supreme Court of Greece.He has served as legal advisor in companies and organizations. At the present healso serves as special Legal Advisor to the Minister of Finance. 3. Ms. Xeni Skorrini-Paparrigopoulou holds a Law Degree from the University ofAthens. She has done postgraduate studies (DESE) at the Centre des EtudesEuropeennes of the University of Nancy (France) and she holds a Ph.D. in CommonLaw from the University of Athens. Since 2000 she has been teaching common lawat the same university and since 2002 she has been Chair of the CJFA of theCouncil of Europe. Following the conclusion of the Annual General Assembly, OTE's Board ofDirectors now comprises the following members: Panagis Vourloumis Chairman and CEO Executive member Iakovos Georganas Vice-Chairman Non-executive member Theodoros Veniamis Non-executive member Ilias Gounaris Non-executive member George Gerapetritis Non-executive member Independent Haralambos Dimitriou Non-executive member George Bitros Non-executive member Xeni Skorrini-Paparrigopoulou Non-executive member Independent Nikos Stefanou Non-executive member Panagiotis Tabourlos Non-executive member Independent George Tzovlas Non-executive member Independent Shareholders also approved: •The 2005 annual financial statements of OTE S.A. and the 2005 consolidated financial statements of OTE Group •The exemption of the members of the Board of Directors as well as the Auditors from any compensation liability for the fiscal year 2005 •The appointment of KPMG Chartered Accountants S.A. as Statutory Auditors for the fiscal year 2006 •The 2005 and the proposed 2006 compensation of the CEO, the members of the Board of Directors, the Audit Committee and the HR Remuneration Committee •The renewal of the draft agreement for the covering of civil liability of members of the Board of Directors and the company's executive management in the exercise of their responsibilities, duties or powers. Authorization to conclude said agreement •Within the context of OTE's corporate social responsibility program, the free disposal of fully depreciated capital assets of OTE S.A, to municipalities, communities, prefectures, public entities, schools, and generally, institutions that promote social programs and activities as well as authorization to the CEO to implement the above. •The terms and conditions of a contract (and authorization to conclude same) with the Faculty of Finance of the Athens University. (Project Manager on behalf of the Athens University will be a member of the Board of Directors of OTE). Resolutions relating to the cancellation of 432,490 treasury shares, and theproposed amendments to Articles 5, 25 and 33 could not be approved in thisAssembly, reflecting the absence of a two-thirds quorum, which is required bylaw and OTE's Articles of Association pertinent to the reduction of sharecapital. For this purpose the General Assembly will reconvene. About OTEOTE Group is Greece's leading telecommunications organization and one of thepre-eminent players in Southeastern Europe, providing top-quality products andservices to its customers. Apart from serving as a full service telecommunications group in the Greektelecoms market, OTE Group has also expanded during the last decade itsgeographical footprint throughout South East Europe, acquiring stakes in theincumbent telecommunications companies of Romania, Serbia and Armenia, andestablishing mobile operations in Albania, Bulgaria, the Former YugoslavRepublic of Macedonia and most recently in Romania. At present, companies inwhich OTE Group has an equity interest employ over 35,000 people in sevencountries, and our portfolio of solutions ranges from fixed and mobile telephonyto Internet applications, satellite, maritime communications and consultancyservices. Listed on the Athens Stock Exchange, the company trades under the ticker HTO aswell as on the New York Stock Exchange under the ticker OTE. In the U.S., OTE'sAmerican Depository Receipts (ADR's) represents 1/2 ordinary share. Additional Information is also available on http://www.ote.gr. Contacts: OTE: Dimitris Tzelepis- Head of Investor Relations Tel: +30 210 611 1574, Email: [email protected] Daria Kozanoglou - Communications Officer, Investor Relations Tel: +30 210 611 1121, Email: [email protected] Marilee Diamanti - IR Coordinator Tel: +30 210 611 5070, Email: [email protected] Christina Hadjigeorgiou-Financial Analyst Tel: +30 210 611 1428, Email: [email protected] Forward-looking statementAny statements contained in this document that are not historical facts areforward-looking statements as defined in the U.S. Private Securities LitigationReform Act of 1995. All forward-looking statements are subject to various risksand uncertainties that could cause actual results to differ materially fromexpectations. The factors that could affect the Company's future financialresults are discussed more fully in the Company's filings with the U.S.Securities and Exchange Commission (the "SEC"), including the Company's AnnualReport on Form 20-F for 2004 filed with the SEC on June 30, 2005. OTE assumes noobligation to update information in this release. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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