PT closed the year of 2004 with net results of 500 million euros (ME). Excluding the costs incurred with the reduction of permanent staff, net results would have increased to 624 million euros. The increase of 108,2% in net results from 2003 is mostly due to the strong effort in operations and finance by the Group throughout last year. Miguel Horta e Costa, Executive Chairman of the PT Group highlighted at a Press Conference that “2004 was another year of strong growth in terms of clients. A considerable increase was registered in all business areas, but mainly in Broadband, Mobile and Subscription TV. At the end of 2004, we registered almost 38 million clients”.
 
PT’s Operational profits at the end of 2004 were of 6.023 million euros, which represented an increase of 4.3% when compared to 2003. Operation results increased 4,2% to 1.369 million euros which is equivalent to an operational margin of 22,7%. The EBITDA (earnings before taxes and amortizations) grew 2,6% on 2003 to 2.326 million euros.
The reduction in net debt maintained throughout 2004 with a reduction of 93 million euros when compared to 2003 (less 2.9%). At year-end, the amount which corresponds to debt was 3.123 million euros and includes the investment in the acquisition of own shares in the value of 495 million euros.

In Portugal, retail earnings (fixed network, Subscription TV and Broadband) registered an increase of 2.0% to 1.838 million euros in 2004, and reflected a strong growth in earnings from Subscription TV and Broadband which more than compensated the fall in earnings from the fixed network. Miguel Horta e Costa also mentioned that “in 2005, Broadband will be a clear bet, together with price plans (fixed network), which have already reached approximately 1 million”.

Regarding the multimedia business, the Executive Chairman of the PT Group highlighted the strong growth in earnings and EBITDA “which was supported by the excellent work down in the Subscription TV business”. It was also mentioned that PT Multimedia EBITDA grew 40% in 2004, reaching a total of 192 million euros.

In the mobile business, TMN reached 5 million clients in the National market, “a clear consolidation of our leadership position in the market”. Horta e Costa told the journalists that “TMN’s focus on client loyalty and client segmentation, have aimed at increasing the base value of actual clients”. By keeping in mind the high level of mobile penetration and the consequent limitations in terms of market growth in the number of subscribers.

Regarding the Brazilian market, VIVO practically grew 30% in client base, having 26,5 million clients by the end of 2004. According to Miguel Horta e Costa who pointed out the “explosive growth” in VIVO’s client base, he said that “2005 will be a year of even more growth”. VIVO’s global market share is of 41% which is double that of its closest competitor, “Claro”.

In his conclusions, Horta e Costa, highlighted the strong effort in operations and finances of the PT Group in 2004, the investment in the growth of the domestic market and of the mobile market in Brazil, the maintenance of efforts in rationalizing costs so as to improve their operations’ effectiveness in various businesses, and finally, the continuation of the attractive dividend policy for shareholders. Regarding shareholder dividends, Horta e Costa classified 2004 as “an excellent year”. According to the Executive Chairman “total shareholder return, which reflects the development of the rates during the year reached 16.8% in 2004. Clearly above the 14.7% registered in the European Telecommunications sector”.

Client Base
Access to the fixed network increased 3.4% in 2004 to 4.368 thousand, which is a result of the strong ADSL growth.

In the mobile business, thanks to the high growth in the Brazilian market, the number of clients in 2004 rose 6.054 thousand to 31.596 thousand.

In Subscription TV, the total number of clients added in 2004 to the cable and satellite network, was 111 thousand, placing itself with a total number of 1.553 thousand.

In retail Broadband (ADSL and Cabo) the increase was of 77.7% compared to 2003, placing itself with a client base of 695 thousand clients at the end of 2004. The added number of clients in 2004 was of 304 thousand.

Fixed Network Business
Operational profits in the fixed network corresponded to 2.226,3 million euros in 2004 which reflected a decrease of 0.9% as compared to 2003. The total number of accesses rose 3.4% to 4.368 thousand in 2004 as a result of the strong growth in ADSL. By the end of the year, the number of pricing plans in the fixed network has fallen to 947 thousand which corresponds to an increase of 148.1% when compared to 2003. Regarding the total business ARPU in the fixed network (average profit per client), a growth of 3.9% was registered in the fourth quarter to 35,0 euros.

Mobile Business in Portugal - TMN
Exploration earnings of the mobile business in Portugal in 2004 rose to 1.588,3 million euros, which represents an increase of 4.3% on the previous year.
Regarding TMN’s client base at the end of 2004, there was an increase of 3.4% on 2003 with 5.053 thousand active clients. 113 thousand additional clients were registered in the last quarter of the year.

Mobile Business in Brazil – VIVO
At the end of 2004, exploration earnings in the mobile business within the Brazilian market reached 1.503 million euros, which represents an increase of 10.4% on 2003.
In 2004, VIVO registered an increase of 5,9 million clients. The total number of VIVO clients at the end of the year corresponded to 26.543 thousand active clients. The client base at the end of the year corresponded to an average market share of 50.9% in the areas in which the operator is present.

Multimedia Business – PT Multimedia
In the multimedia business exploration earnings reached 729,8 million euros in 2004 which corresponds to an increase of 6.6% on 2003.
Client base for Subscription TV increased 7.7% in 2004 reaching a total of 1.553 thousand at the end of the year.
Regarding Total ARPU (average revenue per client) in Subscription TV, it grew 6.6% on 2003 reaching 25,4 euros.  In Broadband Cable, the number of clients reached 315 thousand which represents an increase of 36.9% on the previous year.

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