OREANDA-NEWS. On 19 April 2016, the Board of TEO LT, AB (hereinafter – “Teo” or “the Company”) approved unaudited TEO LT, AB Consolidated Interim Financial Statements, prepared according to International Financial Reporting Standards as adopted by the European Union, for the three months period ended 31 March 2016.

The first successful quarter of Teo and Omnitel operating together

First quarter of 2016*:
     - Total consolidated revenue amounted to EUR 82.5 million, up by 2 per cent over the comparable combined revenue of EUR 80.9 million in Q1 2015.
     - Consolidated EBITDA, excluding non-recurring items, reached EUR 29.2 million, up by 12.5 per cent over comparable combined EBITDA, excluding non-recurring items, of EUR 26 million in Q1 2015.
     - Free cash flow amounted to EUR 3.9 million and was by 8.5 per cent lower than a year ago.

Management comment:

The first three months of operating together following the Omnitel shares’ acquisition by Teo on 4 January 2016 already have proved the acquisition to be the right decision, and one which is starting to bring maximum value for our customers.

First quarter revenue growth and continuation of strict cost control together with a focus on synergies and potential savings resulted in an increase of absolute EBITDA and profitability margins.

Combined investments into development of the officially confirmed to be the largest 4G and fiber-optic networks were also higher than a year ago: EUR 5.9 million in 2016 vs EUR 4.9 million in 2015. The most recent measurements performed by the Communications Regulatory Authority (CRA) show that Omnitel customers enjoy the fastest 4G mobile Internet connection in the largest territory of Lithuania. Omnitel 4G network covers 85 per cent of the territory and can be used by 96 per cent of Lithuanian population.

In January, Omnitel won the CRA auction for the right to use 900/1800 spectrum radio frequencies and for EUR 14.3 million secured the licence for further development of mobile network.

Ongoing investments into expansion of fiber-optic access network and service development pays off in a solid intake of FTTH Internet and IPTV customers over the last 12 months:
     - Number of FTTH Internet customers was up by 12.2 per cent and reached 231 thousand; 
     - Number of IPTV users rise by 24.3 per cent and amounted to 172 thousand.

New customers’ intake in broadband and post-paid mobile services (up by 40 thousand) in combination with growing usage of mobile data lead to:
     - Increase in revenue from both fixed and mobile services by 5.1 per cent; 
     - Revenue from TV services grew by 21.2 per cent, IT services (excluding IT equipment sale) – by 14.8 per cent and mobile services – by 11.2 per cent.

In February, Omnitel offered its customers traveling in Baltic and Nordic countries to make calls and browse Internet under the same conditions as in Lithuania. As a result, data usage abroad rocketed by 12 times.

The level of financial leverage due to acquisition of Omnitel shares, conservative approach to the debt management and thinking about long-term value creation, lead to the Board’s proposal to the Annual General Meeting of Shareholders to approve a 0.01 euro dividend per share for the year 2015.

The results of the first quarter of 2016 lays a solid foundation for accelerated creation of a new generation telecommunications business. Teo shareholders at the forthcoming Annual General Meeting will be asked to approve the preparation of reorganization terms for merger of Omnitel and Baltic Data Center into Teo.

Note: * As on 4 January 2016, TEO LT, AB acquired a 100 per cent stake in UAB Omnitel, financial statements of Teo Group for the first quarter of 2016 presented herein is  consolidated data of TEO LT, AB and its subsidiaries including UAB Omnitel. Comparable data of financial statements for the first quarter of 2015 is actual reported data of Teo Group for that period. In order to present an approximate measure of the performance of the combined group, the comparable combined data of comprehensive income statement, as it is used in the Management Report for the first quarter of 2015, is a data combined by simple aggregation after elimination of intragroup transactions as if UAB Omnitel was the then a part of Teo Group.