TEO: Results for the three months of 2015
The total revenue of Teo Group in January-March of 2015 was EUR 49.9 million, an increase by 1.8 per cent over the total revenue of EUR 49.1 million in the first three months of 2014.
EBITDA for the first three months of 2015 eased by 1.3 per cent, compared with EBITDA of EUR 19 million for the first three months of 2014, and amounted to EUR 18.8 million. EBITDA margin amounted to 37.6 per cent, while a year ago it was 38.8 per cent.
Profit before income tax in the first three months of 2015 went down by 7.2 per cent and amounted to EUR 9.4 million (EUR 10.1 million a year ago).
Profit for the period in January-March 2015 amounted to EUR 8.5 million, a decrease by 7.7 per cent over the profit of EUR 9.2 million for January-March 2014. The profit margin was 17 per cent while a year ago it was 18.7 per cent.
Management’s comment on financial results for the three months period of 2015:
“The first quarter of 2015 showed, for second quarter in a row, growth in total revenue: revenue for the first quarter increased by 1.8 per cent. EBITDA reached EUR 18.8 million, a decline by EUR 0.2 million, compared with the same period a year ago.
The positive customer intake continued and during the first quarter of 2015: the total number of broadband Internet access users (excluding Wi-Fi) increased by 4.1 thousand, while over the last twelve months – by 16.3 thousand. Number of fiber-optic internet connections increased over the year by 11.8 per cent and reached 206 thousand at the end of March 2015. The number of IPTV service users during the first three months of 2015 increased by 6.6 thousand and over the year by 27.4 thousand. By the end of March 2015, the Company had 138 thousand IPTV customers. The trend in decrease in telephone lines continued, but with a lower rate comparing with the previous year: during January-March 2015 it declined by 7.3 thousand.
In the first quarter of 2015, Teo updated its brand and opened customer care showrooms of a new concept in Kaunas and Vilnius. For business customers the Company launched Virtual servers’ service with self-service portal and hourly accounting. At the end of the quarter, Directory Inquiry service 118 entered into partnership with the biggest in Lithuania events tickets distributor to become its information partner.
Share of revenue from non-voice services (IP & IT services) continued to grow and for the first three months of 2015 reached 60.3 per cent. The growth in revenue from residential customers’ segment amounted to 1.2 per cent, driven by increase in revenue from FTTx Internet and IPTV services as well as sales of IT equipment. Revenue from business customers’ segment declined by 7.9 per cent, with main decline in voice telephony and network capacity services. Business to Operators increased by 30.7 per cent, driven by higher transit volumes.
Total operating expenses for the first quarter of 2015 were by 3.5 per cent higher than last year, due to higher cost of goods and services (higher volume of transit traffic and higher equipment sales), which increased by 33.7 per cent. Operating expenses excluding cost of goods and services decreased by 13.9 per cent, where main reason was employee-related expenses, which decreased by 14 per cent. A year ago, employee-related expenses included a non-recurring redundancy charge of EUR 2.2 million.
EBITDA for the first quarter of 2015 eased by 1.3 per cent and amounted to EUR 18.8 million. EBITDA margin reached 37.6 per cent (38.8 per cent a year ago). This was due to change in product mix where the share of revenue from transit service and IT equipment sales increased and put a pressure on EBITDA margin.
During the first three months of 2015, capital investments amounted to EUR 4.3 million. The majority of capital investments (EUR 4 million) went to expansion of the core network and development of the next-generation fiber-optic access network.“
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