Cyprus Mail
Business Cyprus

CyTA will just about break even this year

Politicians were rattled on being informed that Cyta might need to hire up to 150 extra staff to replenish numbers due to planned redundancies

By Elias Hazou

SEMI-state telecoms CyTA is expected to just about break even this year, MPs heard yesterday.

The organisation is slated to be privatised by the end of 2015 in order to raise cash to pay down an international rescue package secured by the government last year.

But during a discussion of the CyTA’s budget for 2014, lawmakers were told that its revenues this year would be halved compared to 2013.

In 2014 the SGO will rake in €415m but spend €448m, compared to €485m revenues and €435m expenditures in 2013. However in an exercise which only accountants can grasp, the profit and loss statement for 2014 shows that CyTA will come out with a net profit (after taxes) of around €7m – still hardly impressive.

Despite this, CyTA chairman Christos Patsalides insisted that at its core the organisation remains robust. CyTA, he said, is for the time self-sufficient and does not owe the banks.

Patsalides ascribed the revenues decline to a combination of factors: the ongoing economic crisis, loss of market share due to stiff competition, and the increasing use by consumers of such technologies like Skype and Viber.

MPs also learned that the organisation’s subsidiary in Greece, CyTA Hellas has been operating at a loss since 2008. Its losses were somewhat mitigated in 2013, coming to €18m compared to €20m the year prior.

To date CyTA has poured some €120m into CyTA Hellas, which offers broadband and telephony services in Greece. Officials are now promising that CyTA Hellas will register a profit by 2016, although similarly upbeat forecasts -since dashed – had also been made for 2013 and then 2014.

Patsalides said CyTA is mulling three options for its loss-making Greek subsidiary: keep it going as is, merging with competitors in Greece, or an outright selloff.

He said the mother company in Cyprus would be able to prop up CyTA Hellas for a year or two at the most. A potential decision to divest of the Greek operation might presumably be pushed back to the end of 2015, when CyTA itself is to be privatised.

Politicians were rattled on being informed yesterday that CyTA might need to hire up to 150 extra staff – remarkably, to replenish numbers due to the planned redundancy scheme.

“That’s the first we hear of this,” DISY deputy Prodromos Prodromou said later.

“We were under the impression that the redundancy scheme, as proposed, was workable. Now we’re being told that the mass departure of staff will cause problems to CyTA’s operations.”

Legislators have asked CyTA to furnish more details.

CyTA has announced a three-year redundancy plan that will initially be voluntary. Approved by all the trade unions, it will cut staff by between 550 and 600 employees and is expected to save €263m. The plan is part of the reorganisation of the company and with the immediate objective of reducing its operating costs.

All CyTA employees who completed at least 10 years of service on the date the scheme was announced are eligible.

In order for the redundancy scheme to go live, CyTA’s budget must first be okayed by parliament.



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