S&P drops Netia outlook to negative

Standard & Poor's said it revised its outlook on Netia SA to negative from stable due to marked revenue and EBITDA deterioration in the first half of 2006.

At the same time, the B+ long-term corporate credit rating on Netia was affirmed, the agency said.

The outlook revision reflects S&P's concerns over the negative revenue trend in Netia's core direct voice business, which has not been offset by revenue growth from other services.

S&P noted that the ratings on Netia continue to be supported by the company's strong balance sheet, with no financial debt and a substantial cash position that is expected to cover negative free cash flow in 2006, dividends to be paid in 2007 and pending contributions to P4.

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