Tecnotree Corporation Interim Review 1 January – 30 June 2013 (unaudited)
14 th August, 2013 at 8.30 am
Tecnotree is a global supplier of telecom IT solutions, providing products and services for charging, billing, customer care, and messaging and content services. The company’s product portfolio comprises virtually the full range of business management systems for telecom operators, with standard solutions for fixed networks, mobile services and broad band and for managing subscriptions, services and cash flows for prepaid and post-paid customers. Tecnotree has a strong footing especially in developing markets.
- Second quarter net sales were a record of EUR 22.5 (21.3) million.
- The adjusted operating result for the quarter rose to EUR 2.7 (2.0) million positive and the result was EUR 2.1 (1.2) million.
- The order book at the end of the period stood at EUR 53.3 (31 December 2012: 54.2) million.
- Second quarter cash flow after investments was EUR -6.5 (0.8) million.
January - June 2013
- Net sales for the review period increased 16.4 per cent from the corresponding period in the previous year to EUR 36.4 (31.3) million.
- T he adjusted operating result improved EUR 2.5 million from the previous year to EUR -1.3 (-3.8) million negative. The operating result was EUR -2.4 (-6.7) million and the result for the period EUR -3.4 (-7.7) million.
- Cash flow after investments for the review period was EUR -5.0 (1.1) million and the company’s cash and cash equivalents were EUR 3.8 (31 December 2012: 11.3) million.
Events after the end of the period
- Tecnotree has agreed on the conditions of the renewal of its debt (Term Sheet) for the following five years. This arrangement gives Tecnotree EUR 5 million more financing as the credit facility to finance working capital goes up from EUR 5 million to EUR 10 million. A standard form of financing agreement has been agreed to be made according to the now agreed conditions by the end of August.
- After the end of June, the company has announced new orders totalling USD 5 million.
|Net sales, MEUR||22.5||21.3||36.4||31.3||73.4|
|Adjusted operating result, MEUR*||2.7||2.0||-1.3||-3.8||-4.9|
|Operating result, MEUR||2.2||0.6||-2.4||-6.7||-12.4|
|Result before taxes, MEUR||4.2||0.4||-1.4||-7.6||-13.7|
|Result for the period||2.1||1.2||-3.4||-7.7||-17.0|
|Earnings per share, basic, EUR **||0.02||0.01||-0.03||-0.09||-0.16|
|Order book, MEUR||53.3||58.8||54.2|
|Cash flow after investments, MEUR||-6.5||0.8||-5.0||1.1||-1.3|
|Change in cash and cash equivalents, MEUR||-6.1||5.1||-7.2||4.4||4.8|
|Cash and cash equivalents, MEUR||3.8||11.0||11.3|
|Equity ratio %||38.0||50.0||42.2|
|Net gearing %||77.4||32.4||47.5|
|Personnel at end of period||1,068||1109||1,116|
* Adjusted operating result = operating result before R & D capitalisation, amortisation of this and one-time costs.“Result analysis” is presented in the interim review.
** The key figure is adjusted for the comparative periods to reflect the share issue.
Unless otherwise stated, all figures presented below are for the reviewed period 1-6/2013 and the figures for comparison are for the corresponding period 1-6/2012.
CEO Ilkka Raskinen:
”Net sales continued to rise encouragingly in the second quarter and profitability also improved clearly. Recognition of revenue from the two large projects in the order book has continued and these projects have made progress according to plan. The company’s prospects in its main market areas are good, so we believe that the growth in net sales will continue.
The renewal of our strategy that has taken place over the past few years and the increase in personnel this has required have now reached the point where net sales continue to grow but the number of personnel is no longer rising. We believe that profitability will improve still further as we are able to utilise in new projects the products and components that we have already developed.
The cash flow was positive in the first quarter thanks to large payments made by customers. In the second quarter we received fewer payments, so the cash flow for the six months period was negative. This is part of normal seasonal fluctuation.
We completed the negotiations on financing and as a result the company obtained EUR 5 million in additional financing.”
Events after the end of the period
In July, Tecnotree has received a USD 5 million order from an operator group in Latin America to provide subscriber and traffic expansions to Tecnotree real-time charging systems. The deliveries will start immediately and they are expected to be completed by the end of this year.
Tecnotree has agreed with its bank on the conditions of the renewal its debt (Term Sheet). The term of financing is five years and it consists of a long-term loan of approximately EUR 21.8 million, a credit facility of EUR 10 million to finance working capital and a EUR 2 million bank guarantee limit. This arrangement gives Tecnotree EUR 5 million more financing as the credit facility to finance working capital goes up from EUR 5 million to EUR 10 million. A standard form of financing agreement has been agreed to be made according to the now agreed conditions by the end of August.
Prospects in 2013
Tecnotree’s order book at the end of 2012 stood at EUR 54.2 million, so the company moved into 2013 in a good position. The company estimates that its net sales and operating result will improve from the previous year.
Variations in the quarterly figures will be considerable.
Prospects have not changed from the previous interim review.
Tecnotree is holding a conference for analysts, investors and the media to announce its second quarter results on 14 th August 2013 at 10.00 am in the Tapiola conference room at the Scandic Hotel Simonkenttä, Simonkatu 9, Helsinki. The interim review will be presented by CEO Ilkka Raiskinen and the conference will be held in Finnish. The material to be presented at the press conference will be available at www.tecnotree.com .
Board of Directors
Ilkka Raiskinen, CEO, tel. +358 (0)45 311 3113
Tuomas Wegelius, CFO, tel. +358 400 433 228
NASDAQ OMX Helsinki Ltd.
Tecnotree is a global provider of telecom IT solutions for the management of products, customers and revenue. Tecnotree helps communications service providers to transform their business towards a marketplace of digital services. Tecnotree empowers service providers to monetise on service bundles, provide personalised user experiences and augment value throughout the customer lifecycle. With over 1100 telecom experts, Tecnotree serves more than 100 service providers in over 70 countries. Tecnotree is listed on the main list of NASDAQ OMX Helsinki with the trading code TEM1V. For more information on Tecnotree, please visit www.tecnotree.com