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(Alliance News) - Zegona Communications PLC on Friday said its investee Euskaltel SA posted an improvement in its earnings for the second quarter of 2020.
Zegona is the largest shareholder in Spanish telecommunications provider Euskaltel, with more than a 21% stake in the firm.
The company - which invests in the telecommunications, media and technology sector - said Euskatel's revenue for the three months ended June 30 rose for the third consecutive quarter to EUR171.6 million. Earnings before interest, tax, depreciation, and amortization grew by 8.8% to EUR91.8 million driven by cost cuts expected to result in annual savings of EUR40 million.
Zegona said the negative impact of the Covid-19 pandemic was limited, highlighting that Euskaltel's mass market fixed customers increased by 11,300 to 782,000, with net additions of 4,800 within the traditional business and 6,500 for Virgin.
"These results demonstrate the excellent progress being made by the new management team at Euskaltel, combining a focus on operating efficiency within the existing business with driving significant growth through national expansion under the Virgin brand. The whole team has responded brilliantly to the challenges created by Covid-19, delivering strong results for the business," said Zegona Chair & Chief Executive Eamonn O'Hare.
In February, Zegona said Euskaltel signed a trademark licence agreement for use of the Virgin brand in Spain. At the time, it said that for Euskaltel, use of the Virgin brand will allow it to pursue its national expansion strategy, which is targeting entry into the 85% part of the Spanish market where Euskaltel is not present.
Zegona shares were flat on Friday afternoon in London at 116.00 pence each.
By Ife Taiwo; ifetaiwo@alliancenews.com
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