The Board of Directors of Tiscali has approved the group’s 3Q02 results: strong improvement in revenues and EBITDA vs September 2001
- Consolidated revenues in Q3 02 came in at EUR 179.9 million, 547.6 in the nine months ended 30 September
- Gross margin at EUR 89.9 million,50% on revenues, up 67% vs 3Q01
- EBITDA loss at EUR -3.6million, 92% lower than in the same 2001 period, and in line with forecasts for achieving breakeven at end 2002
- 125,000 ADSL users at 30 September 2002, 155,000 as of today.
Cagliari, 13 November 2002. The Board of Directors of Tiscali has approved the group’s third quarter results.
Tiscali group performance
Third quarter results bear out the validity of the company’s business model, especially when seen against the backdrop of a difficult economic scenario and the transition phase the telecoms sector is in at present, and confirm Tiscali’s position as a leading European internet services provider. Although the third quarter is traditionally affected by seasonal factors, the Tiscali group turned in a highly satisfactory performance in volume and revenue terms, with no erosion in market share in any of the countries in which it operates.
The recent changes in European regulations have enabled Tiscali to adopt a more aggressive strategy for penetrating the ADSL market, by offering extremely competitive products in its various markets. The launch of ADSL services in the UK and France is proving to be particularly successful. Tiscali had around 125,000 ADSL users as of 30 September 2002, and is actually adding around 8,000 new ADSL customers per week These figures show that the company is capturing a substantial share of the European broadband market, which should boost revenues considerably in 2003.
Revenues
Third quarter consolidated revenues were EUR 179.9 million, 4,3% ahead of the previous quarter, 5% lower than third quarter 2001.
Despite the traditional summer lull, the group turned in a positive performance, with access revenues flat both versus the second quarter 2002 and the third quarter 2001 at EUR 121.7 million. This performance is particularly noteworthy as the access business accounts for 67% of total revenues. The greater proportion of access revenues from direct invoicing and broadband users also contributed to this performance. As of 30 September, the group had a total of 7 million active users, in line compared to the previous quarter.
Portal revenues came in at EUR 9.4 million, 23% up on the previous quarter, despite the problems that have been besetting the advertising market for more than a year. B2B Revenues were EUR 30.4 million, 38% up on the previous quarter, and 21% higher than in 3Q01.
Voice revenues were EUR 12.8 million, unchanged from second quarter levels, but 23% lower than in 3Q01.
Gross margin
In line with management targets, gross margin has gradually improved and was flat vs the second quarter at EUR 89.9 million, 50% on total revenues, 67% ahead of 3Q01.This performance was achieved thanks to efficient integration, cost cutting action and deployment of Tiscali’s business model based on its proprietary IP network.
Marketing costs were down 14% at EUR 31.5 million, compared to the previous quarter, which included expenses deriving from a pan-European branding campaign.
Personnel costs were flat versus the previous quarter at EUR 35.2 million, and 8.5% lower than in 3Q01. The year-on-year reduction was due to a restructuring of the businesses acquired in 2001. In September 2002 the implementation of the restructuring plan for Nordic countries and the company’s international headquarters began, and the benefits should be seen from the final quarter of 2002.
EBITDA
The improvement in business performance and tight control over operating costs, which remained at second quarter levels, enabled the company to reduce its EBITDA losses to EUR -3.6 million, a 62% reduction compared to the previous quarter, and 92% lower versus 3Q01.
EBIT for the quarter was EUR -84.4 million, a 45% advance on 3Q01. Pre-tax profit was EUR -115.3 million, a 41% improvement on 3Q01.
As of 30 September 2002 the group had financial resources of EUR 381 million, while net debt stood at EUR 103 million.
Results for the first nine months of 2002
Efficiency and profitability improvements were confirmed by 9M02 results. The group recorded revenues of EUR 547.6 million, 22% higher than in the equivalent 2001 period (EUR 448 million). EBITDA losses for the first nine months of 2002 were EUR
-12.2 million compared to EUR -163.7 million in 9M01, an improvement of 93%. This was achieved thanks to a major improvement in gross margin, which rose by 133% to EUR 262.7 million.
The Board of Directors also announced that it has adopted the Code of Conduct on Internal Dealing in accordance with articles 2.6.3., 2.6.4. and 2.6.4. bis of the Nuovo Mercato regulations.
- Ends-
This press release includes forward-looking statements. These forward-looking statements are based on current expectations and projections about future events. These forward-looking statements are subject to certain risks, uncertainties and assumptions. This press release also contains unaudited proforma figures.
Tiscali undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed in this press release might not occur. Any statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.
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Mara Baldessari