Hrvatski Telekom d.d. reported unaudited consolidated earning results for the second quarter and six months ended June 30, 2012. For the six months, the company reported EBITDA before and after exceptional items of HRK 1,620 million, EBIT of HRK 965 million and net profit after minority interest of HRK 808 million on revenue of HRK 3,649 million compared to EBITDA before and after exceptional items of HRK 1,669 million, EBIT of HRK 1,004 million and net profit after minority interest of HRK 828 million on revenue of HRK 3,883 million reported a year ago. Net cash flow from operating activities was HRK 1,139 million compared to HRK 983 million reported a year ago. Group revenues continue to be affected by the recession, intense competitive pressure, regulatory initiatives and special taxation. Total revenues fell 6.0% caused mainly by the fall in voice revenues, while non voice revenues showed robust growth. Net cash flow from operating activities was increased by 15.9%, mainly due to positive movements in provisions and working capital, especially in trade payables and inventory management. Capital expenditure was HRK 345 million compared to HRK 499 million reported a year ago. Capital expenditure in the first half of 2012 has been lower than in 2011, mostly as a result of reprioritization and rescheduling strategic projects (PSTN migration, mobile broadband deployment). Profit before taxes was HRK 998 million compared to HRK 1,022 million reported a year ago. For the quarter, the company reported EBITDA before and after exceptional items of HRK 858 million, EBIT of HRK 528 million and net profit of HRK 443 million on revenue of HRK 1,843 million compared to EBITDA before and after exceptional items of HRK 902 million, EBIT of HRK 571 million and net profit of HRK 477 million on revenue of HRK 1,989 million reported a year ago. Revenues declined by 7.4% mainly due to a 12.2% fall in voice revenues. The key drivers of this decline were the tough economic environment, consistently decreasing prices and intense competitive pressures. Non voice revenues rose by 3.6%, largely as a result of an increase in residential fixed non voice revenues (connected with ADSL and IPTV services) and revenue from infrastructure due to Wholesale Line Rental. EBITDA fell 4.8%, with a 7.4% decrease in operating expenses only partially offsetting the revenue decline. Profit before taxes was HRK 541 million compared to HRK 581 million reported a year ago. The company announced that last year's trend in group revenue decline is expected to continue. The group will continue its cost management program throughout the year. Due to continued severe economic and market conditions in Croatia, leading to lower expectations for revenue, the group expects 2012 EBITDA to be somewhat lower than the 2011 level. The current regulatory framework continues to deter investment in fiber infrastructure by the Group. The company continues investment to transform its fixed core network and enhance its infrastructure to support further growth in fixed and mobile broadband demand. As a consequence, capex in 2012 is expected to be higher than the previous year.