November 8, 2012 / 11:12 AM / 5 years ago

Portugal Telecom domestic revenues hit by recession

* Q3 EBITDA down almost 9 percent to 300.9 million euros

* Revenue falls to 682 million euros vs f‘cast 678 mln

* Shares up 2 pct

LISBON, Nov 8 (Reuters) - Portugal Telecom’s domestic revenue fell nearly 7 percent in the third quarter due to the country’s deep recession, although a rise in the number of internet and pay-TV clients cushioned the decline.

The company said on Thursday revenue fell to 682 million euros, slightly exceeding the market consensus of 678 million, mostly thanks to the strong performance of its MEO unit that bundles pay-TV, internet and fixed phone services.

PT shares rose 2 percent to 3.841 euros by 1106 GMT, outperforming the broader market in Lisbon, up 0.7 percent.

Domestic earnings before interest, taxes, depreciation and amortization (EBITDA) fell almost 9 percent to 300.9 million euros. PT will release its full consolidated earnings, including its 25 percent stake in Brazil’s telecommunications group Oi , on Nov. 30.

MEO’s client base rose over 6 percent from a year earlier to just above 5 million clients, leading PT’s residential segment sales 4 percent higher to 179 million euros, PT said.

But its mobile phone unit was heavily affected by the country’s recession - the worst since the 1970s - as revenue there fell 11 percent to 144 million euros.

“The challenging and deteriorating economic conditions that led to low consumer confidence levels impacted the personal segment since mobile consumers are clearly exposed to economic trends,” PT said.

The company cut its operating costs by 5 percent from a year earlier and capital expenditure by almost 12 percent.

Debt-laden Portugal is going through a painful fiscal adjustment under the terms of a 78 billion euro EU/IMF bailout which has contributed to its economic slump. The economy is expected to contract 3 percent this year after last year’s 1.6 percent decline, and to shrink another 1 percent in 2013. (Reporting By Filipe Alves; Writing by Andrei Khalip; Editing by David Holmes)

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