ELISA?S APRIL-JUNE PRE-TAX RESULT AMOUNTED TO EUR 113 MILLION
ELISA CORPORATION STOCK EXCHANGE RELEASE 28 JULY 2005 AT 8.30am
ELISAS APRIL-JUNE PRE-TAX RESULT AMOUNTED TO EUR 113 MILLION
· The April-June pre-tax profit amounted to EUR 113 million
(41). Revenue was EUR 336 million (339). The result includes a
total of EUR 86 million in one-off items.
· Compared to the previous quarter, Elisas number of
subscriptions in mobile communications, exclusive of MVNO
subscriptions, rose by approximately 27 000 subscriptions and the
churn decreased from 33.5 to 32.3 per cent.
· The sales of broadband subscriptions continued robustly; the
number of broadband subscriptions increased by approximately
39 000 over the previous quarter.
· The financial position remained stable: at the end of June,
the equity ratio was 55 per cent (49 per cent at the end of 2004)
and net debt was EUR 364 million (462 million at the end of 2004).
· The operative EBITDA was EUR 84 million during the review
period, which, as anticipated, was at the level of the previous
quarter, taking changes in corporate structure into account (EUR
86 million in January-March).
In April-June, Elisas key figures were:
Income statement Q2/2005 Q2/2004 2004
EUR million
Revenue 336 339 1 356
EBITDA 170* 102 455
EBIT 118 48 242
Profit before taxes 113 41 212
Earnings per share, EUR 0.66 0.20 1.10
CAPEX 46 33 182
* EBITDA includes compensations for damage in interconnection
traffic for EUR 28 million, a capital gain on real estate for EUR
15 million, a capital gain on the disposal of Comptel shares and
the related impact on earnings for EUR 40 million, a correction of
EUR -4 million to the allocation of the Yomi purchase price, IFRS
adjustment relating to the transfer of pension liabilities for EUR
13 million, and a provision of EUR -6 million for reorganizing
operations.
Figures describing the financial position and cash flow:
Financial position Q2/2005 Q2/2004 2004
Net debt 364 581 462
Equity ratio, % 55 43 49
Cash flow statement Q2/2005 Q2/2004 2004
Cash flow after 136 88 225
investments
CEO Veli-Matti Mattila:
Elisas market position strengthened.
Elisa has succeeded well in the fierce competition. Our market
position has strengthened both in the mobile communications and
broadband markets. Since the end of March, the number of
subscriptions in mobile communications has risen by 27 000, and
the number of broadband subscriptions by almost 40 000. The number
of our broadband subscriptions has almost doubled within a year.
Elisa has announced a public share exchange offer for all
Saunalahti shares. Upon the completion of the deal, Elisas market
position will strengthen in line with our strategy.
Should the deal between Elisa and Saunalahti be enacted,
competition in the market will still remain tight, and may even
become fiercer. In addition to price, services will play a more
significant role in the competition. In conjunction with the deal,
Elisa will continue to support the positive features of Saunalahti
that have persuaded a number of customers to choose its services.
The deal will provide enhanced resources to create new and
improved services.
A proposal has been submitted to the Parliament to end the ban on
the bundling of 3G subscriptions and handsets. In Elisas opinion,
this is a welcome step and should be supported in order to promote
new services in mobile communications in particular. We would
have been prepared to take a further step and remove the ban on
all subscriptions.
ELISA CORPORATION
Vesa Sahivirta
Director, IR and Financial Communication
Further information:
Mr Veli-Matti Mattila, President and CEO, tel. +358 10 262 2635
Ms Tuija Soanjärvi, CFO, tel. +358 10 262 2606
Mr Vesa Sahivirta, Director, IR and Financial Communication, tel.
+358 10 262 3036
Distribution:
Helsinki Stock Exchange
Major media
Interim report for January-June 2005
This interim report has been prepared in accordance with the IFRS
booking and valuing principles. Information in this interim report
is not audited.
April-June business review
Market situation
The competitive situation remained fierce. Elisa invested heavily
in sales and strengthened its market position. The number of
Elisas mobile phone subscriptions continued to develop
favourably. Prices for the average call minute rate of the mobile
communication business continued to fall and usage by subscribers
increased. The number of broadband subscriptions in the fixed
network business continued its strong growth, whereas the number
and use of traditional subscriptions decreased.
Revenue
EUR million Q2/2005 Q2/2004 Change %
Mobile communications 180 175 3 %
Fixed network 170 166 2 %
Other businesses 10 28 -64 %
Sales between segments -25 -30 -17 %
Total 336 339 -1 %
Elisas revenue for April-June remained at the same level as in
the corresponding period in 2004. Revenue for the mobile
communication business was affected by increased usage of
subscriptions. Revenue growth was slowed down by the fall in
interconnection fees and consumer prices. Revenue for the fixed
network business increased due to growth in the broadband business
and restructuring measures.
Performance
EUR million Q2/2005 Q2/2004 Change %
Mobile communications
EBITDA 74* 47 57 %
EBITDA, % 41 % 27 %
EBIT 52 25 108 %
Fixed network
EBITDA 43 48 -10 %
EBITDA, % 25 % 29 %
EBIT 17 21 -19 %
Other businesses and corporate
functions
EBITDA 53** 7
EBIT 49 2
Group, total
EBITDA 170 102 67 %
EBITDA, % 51 % 30 %
EBIT 118 48 146 %
* EBITDA includes compensations for damage in interconnection
traffic for EUR 28 million,
** EBITDA includes a capital gain on real estate for EUR 15
million, a capital gain on the disposal of Comptel shares and the
related impact on earnings for EUR 40 million, a correction of EUR
-4 million to the allocation of the Yomi purchase price, IFRS
adjustment relating to the transfer of pension liabilities for EUR
13 million, and a provision of EUR -6 million for reorganizing
operations.
Elisas EBITDA clearly improved over the previous year. This was
affected by the tax-free capital gain on Comptel shares, a
compensation for damages received from TeliaSonera and capital
gain on real estate. Elisas comparable EBITDA decreased by
EUR 18 million over the previous year. Reduced EBITDA was affected
by the fall in prices of mobile communications and decreased volumes
in the fixed network. In addition, EBITDA was eroded by sales costs
relating to the enhanced number of mobile and broadband
subscriptions.
The group's other financial income and expenses totalled EUR -6
million (-7). Reduced financial expenses were mainly due to the
decreased net debt.
Income taxes in the income statement amounted to EUR -18 million
(-12). The tax base in Finland was altered from 29 to 26 per cent
at the beginning of 2005.
The group's April-June result after taxes was EUR 95 million (29).
The group's earnings per share (EPS) amounted to EUR 0.66 (0.20).
At the end of June, the group shareholders' equity per share stood
at EUR 6.98 (6.23 at the end of 2004).
Changes in corporate structure
Elisa revised its operational model to increase customer
orientation and effectiveness, in line with its strategic
decisions. Accordingly, the tasks and responsibilities of the
members in Elisas Executive Board were reorganised. The changes
took effect on 2 May 2005.
On 26 May 2005, Elisas holding of Tikka Communications Oy
exceeded 50 per cent, after which Tikka Communications Oy was
consolidated as a subsidiary as of 1 June 2005.
Elisas ownership of Comptel Corporation decreased from 58.1 per
cent to 19.9 per cent after Elisa sold 40 946 000 Comptel
Corporation shares to institutional investors for EUR 65.1 million
at the end of May. Comptel Corporation was consolidated as a
subsidiary until 31 May 2005.
Finnet International Ltd was merged into Elisa on 31 May 2005.
On 1 June 2005, Elisa sold its 35 per cent holding of Racap
Solutions Oy to Capgemini Finland Oy.
On 27 June 2005, Elisa sold a 55.1 per cent stake of Lippupiste
Oys share capital to Interavanti Oyj and a 25 per cent stake to
Cardplus Oy. Elisa still has a 19.9 per cent holding of Lippupiste
Oy, which the buyers have agreed to purchase from Elisa after a
period of two years.
Elisa transferred its personnels statutory pension coverage to
Varma Mutual Pension Insurance Company and the supplementary
pensions to Sampo Life Insurance Company Ltd as of 1 July 2005. At
the same time, Elisa's Pension Fund transferred its statutory
pension liabilities and assets to Varma and supplementary pension
liabilities and assets to Sampo Life. The transfer of pension
liabilities was registered on 30 June 2005.
Mobile business
Q2/2005 Q2/2004 2004
Number of subscriptions,
Finland* 1 465 066 1 330 901 1 383 515
Number of subscriptions, 244 450 200 270 225 500
Estonia**
Revenue/subscription**(ARPU), 33.8 38.2 37.8
Churn**, % 32.3 29.4 33.7
Usage, million minutes* 790 612 2 498
Usage, min./subscription/mth** 175 157 156
SMS, million msg* 171 128 537
SMS, msg/subscription/mth** 37 34 34
Value-added services/revenue, % 15 13 14
* Elisas network operator in Finland, exclusive of MVNO
subscriptions
** Elisas service operator
In Q2, the number of subscriptions of Elisas network operator in
Finland rose by 26 614. The growth consisted of the increase in
subscriptions of Elisas own service operator. The number does not
include MVNO (Mobile Virtual Network Operators) subscriptions.
The call minutes per subscription of Elisas own service operator
rose by around 12 per cent, and the number of SMS messages
increased by approximately 9 per cent over the corresponding
period in the previous year. The call minutes of the network
operator rose by 29 per cent and SMS messages by 34 per cent. The
increased volume of the network operator was substantially
affected by additional traffic generated by MVNOs.
Revenue per subscription (ARPU) decreased by approximately 12 per
cent over the last year. This was mainly due to a fall in
interconnection fees and consumer prices.
The business operations of Elisas subsidiary in Estonia continued
favourably. Revenue was EUR 22.1 million (18.8), EBITDA EUR 7.2
million (5.6) and EBIT EUR 4.9 million (3.2). The number of
subscriptions increased by approximately 22 per cent and reached
244 450 subscriptions (200 270) at the end of June.
Elisa signed an agreement on new mobile interconnection fees with
TeliaSonera Finland and Finnet Networks. Elisas mobile
interconnection fee is 8.4 cents per minute as of 1 June 2005.
Previously the fee was 10 cents per minute.
Elisa introduced a Vodafone Push Email service which makes sending
and receiving email with a mobile phone easier. The service allows
the user to automatically and securely transfer email to a mobile
phone. It also supports all email functions, such as the opening
of attachment files.
In collaboration with Nokia, Elisa introduced a new mobile handset
concept in which the handset and the services are in the same
package. Thanks to the Elisa Mobi menu, utility and entertainment
services and the most important features of the handset are easily
accessible.
Elisa launched the distribution of a SIM card embedded with a
citizen certificate. The service, produced in collaboration with
the Population Register Centre, facilitates an affordable, secure
and user-friendly way to log into electronic services.
Fixed network business
Number of subscriptions Q2/2005 Q2/2004 2004
Broadband subscriptions 308 183 160 502 222 307
ISDN channels 141 743 180 618 159 591
Cable TV subscriptions 204 528 189 534 198 447
Analogue and other 608 846 659 447 640 072
subscriptions
Subscriptions, total 1 263 300 1 190 101 1 220 417
Brisk demand for Elisa Broadband subscriptions continued in the
second quarter. During April-June, the number of broadband
subscriptions increased by 38 951. The growth over the last years
corresponding period was 92 per cent. The target of one million
broadband subscriptions pursuant to Finlands national broadband
strategy was exceeded in June. The number of traditional
subscriptions continued its steady decrease as voice is shifting
to the mobile network and data to broadband subscriptions.
Kolumbus launched a new international call service in early April.
The new 99559-prefixed international call functions in all fixed
and mobile subscriptions.
Elisa was awarded with Ciscos Silver Partner of the Year
acknowledgement as the best partner for Northern Europe in its
category.
Personnel
During April-June, the average number of people at Elisa was 5 059
(an average of 5 590 in 2004). During the review period, the
disposal of Comptel reduced the number of personnel by
approximately 420. The consolidation of Tikka Communications as
Elisas subsidiary increased the personnel by approximately 260.
Number of personnel at the
end of review period Q2/2005 Q2/2004 2004
Mobile communications 1 507 1 548 1 477
Fixed network 3 243 3 211 3 015
Other businesses 166 851 814
Corporate functions 72 79 70
Total 4 988 5 689 5 376
As part of extensive streamlining measures, Elisa initiated
personnel negotiations on 9 May 2005 regarding the reorganisation
of operations in Finland. The aim is the simplifying and balancing
of the organisation. The personnel negotiations were completed on
20 June 2005, and as a result, Elisas number of personnel will
decrease by 73.
Investments
EUR million Q2/2005 Q2/2004 2004
Capital expenditures, of which 46 33 182
- mobile business 22 16 68
- GSM leasing liability buy- 0 1 20
backs 23 15 88
- fixed network business 1 1 6
- others 31 8 61
Shares 77 41 243
Total
Financial position
Elisas financial position and liquidity strengthened during the
second quarter. This was particularly affected by the good
performance, the divestment of non-core businesses and non-current
assets and the compensations for damages received. The groups
April-June cash flow after investments amounted to EUR 136 million
(88).
On 17 June 2005, Elisa signed a seven-year EUR 170 million
syndicated credit facility. The facility replaces a comparable
arrangement signed in June 2003.
Before shifting Elisas TEL pension liabilities to Varma Mutual
Pension Insurance Company, Elisa repaid EUR 64 million in pension
loans ahead of schedule to the Elisa groups Pension Fund.
Financial key indicators
EUR million Q2/2005 Q2/2004 2004
Net debt 364 581 462
Gearing, % 36.2 72.3 50.6
Equity ratio, % 55.0 43.2 49.3
Q2/2005 Q2/2004 2004
Cash flow after investments 136 88 225
Valid finance arrangements
EUR million Maximum In use on 30 June
amount 2005
Committed credit line 170 0
Commercial paper programme 1) 150 0
EMTN programme 2) 1 000 452
1) The programme is not committed
2) European convertible bond programme, not committed. The
validity of the programme terminated on 30 June 2006.
The programme is being revised to conform to the directives that
took effect on 1 July 2005.
Ratings per long-term loans
Credit rating agency Rating Outlook
Moodys Investor Services Baa2 Stable
Standard & Poors BBB Stable
Share
At the end of June, the company's total number of shares was
141 989 109. The market capitalisation on 30 June 2005 stood at
EUR 1 834 million.
In April-June, a total of 46.8 million company shares were traded
on the Helsinki Stock Exchange for an aggregate of EUR 573.8
million. The exchange was 33.0 per cent of the number of shares in
the market.
The number of Elisas A warrants for the year 2000 was 3 600 000
and the number of B warrants 2000 was 3 600 000. At the end of
June, the market capitalisation of the warrants amounted to EUR
0.2 million.
Treasury shares
The Board of Directors has an authorisation issued by the Annual
General Meeting of 14 March 2005 to acquire and assign treasury
shares. The authorisation has not been used.
Shares Q2/2005 Q2/2004 2004
Treasury shares owned by
Elisa Corp. 0 0 0
Elisa shares owned by 232 351 766 870 210 672
subsidiaries
Treasury shares, total 232 351 766 870 210 672
% of share capital and votes 0.16 % 0.56 % 0.15 %
Shares owned by Elisa Pension
Fund*) 0 263 563 202 263
% of share capital and votes 0 % 0.19 % 0.14 %
*) The handling of Elisas pension issues was transferred to
insurance companies on 1 July 2005.
Major legal issues
The following changes have taken place in the legal processes
after the publication of Elisa's annual report for 2004 and
interim report for January-March 2005:
In the redemption proceeding regarding the merger of Yomi Plc,
pursuant to Chapter 14 Section 12 of the Finnish Companies Act,
the arbitration court set the redemption price at EUR 7.30 per
share on 7 April 2005. The redemption concerns 636 294 former
shares of Yomi Plc. The handling of the matter with regard to
428 600 shares is pending in the district court.
On 29 April 2005, Helsinki District Court issued a ruling in
favour of Elisa, and dismissed the action for annulment of the
decision made in Elisa Matkapuhelinpalvelut Oys (previously known
as Oy Radiolinja Ab) Annual General Meeting in spring 2000 to
increase the share capital. The plaintiffs have appealed the
decision.
On 22 June 2005, Helsinki District Court issued a ruling in favour
of Elisa confirming that Elisa had set sufficient security to some
of the plaintiffs in the action for annulment, as described in the
previous chapter, and to any claims by Oy Multiclearing Ltd
concerning the merger of Elisa Matkapuhelinpalvelut Oy into Elisa
Corporation. The said parties have appealed the decision.
Elisa and TeliaSonera agreed on dropping the legal proceedings,
which started in February 2005, regarding the claim on restitution
and compensation of mobile interconnection fees and the patent
action brought on by TeliaSonera in November 2004. As part of the
overall solution, the parties have agreed that TeliaSonera Finland
will pay EUR 30 million in compensation to Elisa. Elisa also
reached an agreement over mobile interconnection fees regarding
Finnet Networks, and agreed to pay EUR 2 million in compensation
to Finnet Networks. The Finnish Communications Regulatory
Authority has ended its investigation regarding mobile termination
fees.
Events after the financial period
On 1 July 2005, Elisas holding in Tikka Communications Oy
exceeded 90 per cent. Elisa will make a redemption claim on the
remaining Tikka shares. However, Elisas share exchange offer to
the shareholders of Tikka Communications Oy will be extended to 26
August 2005.
On 7 July 2005, Elisa announced a public share exchange offer,
which will be made by 31 August 2005, for all shares issued by
Saunalahti Group Oyj. The consideration of Elisas share exchange
offer is one Elisa share for each 5.6 Saunalahti shares.
Elisa has signed an agreement with certain large Saunalahti Group
Oyj owners on 7 July 2005 whereby they have undertaken to
participate in Elisas share exchange offer. Novator Finland Oy is
a party to this agreement. According to a notice by Novator
International Holding Ltd, Novator Finland Oy and its affiliates
holdings in Elisa would increase to approximately 5.26 per cent of
share capital and of voting rights, or, including shares
controlled pursuant to agreements, to approximately 6.57 per cent.
Outlook
The fierce competition in the Finnish telecommunications market
continues. The use of mobile and fixed network products will
increase rather intensely. Elisa will continue to focus on
strengthening its market position.
Taking into account the changes in the group structure, the year
2005 comparable revenue is estimated to remain at last years
level. Thanks to the already implemented and planned
rationalization processes, the companys competitive edge will
continue to improve and profitability will remain at a good level.
The ongoing structural reorganization and the competition are
eroding the predictability of the result. No significant changes
are estimated to take place in the comparable EBITDA and EBIT
levels during the latter part of 2005 as compared to the first
half of the year, assuming that the traffic generated by MVNO
customers, especially Saunalahti, will increase substantially
during the autumn. The impact of the Saunalahti deal has not been
taken into account in these estimates. Should the Saunalahti deal
be realized, the result will be burdened by the amortizations
caused by the allocation of the purchase price.
The capital expenditure for the whole year will amount to 13 per
cent of revenue at most and the cash flow will continue to be
clearly positive.
BOARD OF DIRECTORS
Figures are not audited
CONSOLIDATED INCOME STATEMENT
EUR million
4-6 4-6 1-6 1-6 1-12
2005 2004 2005 2004 2004
Revenue 335,9 339,3 668,8 672,0 1356,0
Other operating income 87,1 3,4 98,3 10,0 27,0
Operating expenses -253,2 -241,2 -500,2 -460,7 -928,2
EBITDA 169,8 101,5 266,9 221,3 454,8
Depreciation and amortisation -52,1 -53,2 -104,5 -106,4 -213,2
EBIT 117,7 48,3 162,4 114,9 241,6
Share of associated companies'
profit 0,5 -0,3 1,2 -0,3 1,3
Financial income and expenses -5,6 -6,9 -12,1 -17,2 -30,4
Profit before tax 112,6 41,1 151,5 97,4 212,5
Income taxes -17,9 -11,8 -23,8 -28,5 -53,2
Profit for the period 94,7 29,3 127,7 68,9 159,3
Attributable to:
Equity holders of the parent 95,3 26,9 127,4 65,3 151,7
Minority interest -0,6 2,4 0,3 3,6 7,6
Profit for the period 94,7 29,3 127,7 68,9 159,3
Earnings per share (EUR)
Basic 0,66 0,20 0,90 0,48 1,10
Diluted 0,66 0,20 0,90 0,48 1,10
Average number of outstanding
shares (1000 shares)
Basic 141772 137321 141775 137321 137570
Diluted 141772 137321 141775 137321 137570
REVENUE BY BUSINESS SEGMENTS
EUR million
4-6 4-6 1-6 1-6 1-12
2005 2004 2005 2004 2004
Mobile 180,3 174,5 359,3 353,7 712,8
Fixed Network 170,4 166,5 331,9 330,8 653,6
Other Companies 10,4 28,5 31,3 51,1 108,4
Unallocated 2,4
Intra-segment sales elimination -25,2 -30,2 -53,7 -63,6 -121,2
Corporation total 335,9 339,3 668,8 672,0 1356,0
EBITDA BY BUSINESS SEGMENTS
EUR million
4-6 4-6 1-6 1-6 1-12
2005 2004 2005 2004 2004
Mobile 73,5 46,6 122,7 110,3 227,0
Fixed Network 43,0 47,4 82,6 102,8 200,7
Other Companies 39,4 6,2 49,8 9,2 20,3
Unallocated 13,9 1,3 11,8 -1,0 6,8
Corporation total 169,8 101,5 266,9 221,3 454,8
EBIT BY BUSINESS SEGMENTS
EUR million
4-6 4-6 1-6 1-6 1-12
2005 2004 2005 2004 2004
Mobile 52,1 25,4 78,8 67,6 138,1
Fixed Network 16,5 20,6 29,8 47,8 91,1
Other Companies 34,9 4,0 41,6 5,0 10,2
Unallocated 14,2 -1,7 12,2 -5,5 2,2
Corporation total 117,7 48,3 162,4 114,9 241,6
CONSOLIDATED BALANCE SHEET
EUR million
30.6. 30.6. 31.12.
2005 2004 2004
Non-current assets
Intangible assets 79,0 57,4 75,8
Consolidated goodwill 470,4 456,9 466,2
Tangible assets 702,4 750,3 724,2
Investments in associated companies 0,5 11,9 11,7
Other investments 41,8 7,3 10,4
Deferred tax receivable 37,4 104,5 42,5
Other receivables 51,5 46,4 46,5
1383,0 1434,7 1377,3
Current assets
Inventories 17,1 14,8 15,1
Trade and other receivables 270,9 265,4 308,5
Cash and cash equivalents 169,2 152,9 162,8
457,2 433,1 486,4
Total assets 1840,2 1867,8 1863,7
Equity attributable to equity holders
of the parent 989,6 740,8 883,5
Minority interest 16,1 61,1 31,0
Total equity 1005,7 801,9 914,5
Non-current liabilities
Deferred tax liabilities 34,0 40,5 29,8
Provisions 8,8 31,8 21,4
Interest-bearing debt 407,3 605,1 593,4
Other non-current liabilities 13,6 6,9 10,3
463,7 684,3 654,9
Current liabilities
Provisions 4,9 6,7 3,3
Interest-bearing debt 126,3 127,6 31,8
Current liabilities 239,6 247,3 259,2
370,8 381,6 294,3
Total equity and liabilities 1840,2 1867,8 1863,7
STATEMENT OF CHANGES IN EQUITY
EUR million
Share
Share issue Treasury Other Retained Minority Total
capital premium shares reserves earnings interest equity
Total equity
at 31.12.2003 69,0 516,7 -24,7 3,4 110,0 73,3 747,7
Cash flow
hedges 0,0
Other changes 0,1 1,0 -15,8 -14,7
Net profit for
the period 65,3 3,6 68,9
Total equity
at 30.6.2004 69,0 516,7 -24,7 3,5 176,3 61,1 801,9
Total equity
at 31.12.2004 71,0 561,9 -3,1 3,0 250,7 31,0 914,5
Cash flow
hedges 0,0
Available for
sale investments 31,9 31,9
Treasury shares 0,1 0,1
Dividend -56,8 -3,6 -60,4
Other changes 0,3 3,2 -11,6 -8,1
Net profit for
the period 127,4 0,3 127,7
Total equity
at 30.6.2005 71,0 562,2 -3,0 34,9 324,5 16,1 1005,7
RECONCILIATION OF NET PROFIT
FOR COMPARISON PERIODS 2004
EUR million
4-6 1-6 1-12
2004 2004 2004
Profit for the period before minority interest
according to FAS 17,0 49,9 113,9
Effects of adopting IFRS:
Reversal of goodwill amortisation 11,3 22,5 44,6
Employee benefits 1,2 2,4 10,7
Finance leases 1,0 -5,7 -9,6
Financial instruments 0,0 -0,6 0,5
Income tax -1,2 0,4 -0,8
IFRS adjustments, total 12,3 19,0 45,4
Profit for the period according to IFRS 29,3 68,9 159,3
Attributable to:
Equity holders of the parent 26,9 65,3 151,7
Minority interest 2,4 3,6 7,6
29,3 68,9 159,3
RECONCILIATION OF EQUITY
FOR COMPARISON PERIODS 2004
EUR million
1.1. 30.6. 31.12.
2004 2004 2004
Total equity according to FAS 699,1 735,3 851,0
Effects of adopting IFRS:
Reversal of goodwill amortisation 22,5 44,6
Employee benefits -24,0 -21,6 -13,5
Finance leases 4,7 -1,0 -4,9
Reversal of revaluations -11,1 0,0
Financial instruments 0,9 0,3 1,1
Other adjustments 1,7 1,7 1,6
Income tax 3,2 3,6 3,6
IFRS adjustments, total -24,6 5,5 32,5
Equity holders of the parent 674,5 740,8 883,5
Minority interest according to FAS 77,4 65,3 33,6
IFRS adjustments -4,1 -4,2 -2,6
Minority interest 73,3 61,1 31,0
Total equity according to IFRS 747,8 801,9 914,5
CONSOLIDATED CASH FLOW STATEMENT
EUR million
1-6 1-6 1-12
2005 2004 2004
Cash flow from operating activities
Profit before tax 151,5 97,4 212,5
Adjustments to profit before tax 36,7 108,4 199,7
Change in working capital -18,6 2,9 4,9
Cash flow from operating activities 169,6 208,7 417,1
Received dividends and interests and
interest paid -10,7 -30,4 -45,8
Taxes paid -3,0 -10,8 -16,0
Net cash flow from operating activities 155,9 167,5 355,3
Cash flow in investments
Capital expenditure -79,1 -75,9 -171,4
Investments in shares and other investments -12,9 -8,3 -10,4
Proceeds from asset disposal 98,1 13,9 51,4
Net cash used in investment 6,1 -70,3 -130,4
Cash flow after investments 162,0 97,2 224,9
Cash flow in financing
Sales of treasury shares 6,4
Change in interest-bearing receivables 25,1 24,3
Repayment of long-term debt -85,5 -0,9 -110,7
Change in short-term debt -1,5 -15,3 -15,3
Repayment of financing leases -8,6 -10,9 -21,0
Dividends paid -60,0 -9,5 -13,0
Cash flow in financing -155,6 -11,5 -129,3
Change in cash and cash equivalents 6,4 85,7 95,6
Cash and cash equivalents at beginning of period 162,8 67,2 67,2
Cash and cash equivalents at end of period 169,2 152,9 162,8
LIABILITIES
EUR million
30.6. 30.6. 31.12.
2005 2004 2004
Mortgages, pledges and guarantees
Mortgages
For own and group companies 1,9 73,0 27,6
Pledges given
Pledges given as surety 0,9 1,0 0,2
Guarantees given
For others 11,0
Mortgages, pledges and guarantees total 2,8 85,0 27,8
Derivative contracts
Forward contracts and swap agreements
Nominal value of underlying instrument 0,0 17,0 13,5
Leasing contracts and
other commitments
Leasing commitments 19,1 22,8 18,3
Repurchase commitments 0,9 1,6 1,2
Real estate leases 59,4 69,6 77,2
Lease liabilities total 79,4 94,0 96,7
Other commitments
Lease-leaseback agreement (QTE facility)
Termination risk 22,9 25,4 22,8
Total value of the arrangement 167,9 167,0 149,8
Other commitments 0,8 5,0 9,1
KEY FIGURES
4-6 4-6 1-6 1-6 1-12
EUR million 2005 2004 2005 2004 2004
Shareholders' equity/share, EUR 6,98 5,40 6,23
Net debt 364,4 580,7 462,2
Gearing 36,2 % 72,3 % 50,6 %
Equity ratio 55,0 % 43,2 % 49,3 %
Gross investments in fixed assets 45,9 33,3 87,9 77,2 181,8
of which finance lease investments 7,4 0,1 8,8 1,3 10,4
Gross investments as % of revenue 13,7% 9,8% 13,1 % 11,5 % 13,4 %
Investments in shares 30,8 7,9 33,7 8,3 61,1
Average number of personnel 5242 5613 5590
Formulae for financial indicators
Gearing %
Interest-bearing debt - cash and cash equivalents
----------------------------------------------------x 100
Total equity
Equity ratio %
Total equity
---------------------------------------------- x 100
Balance sheet total - advances received
Net debt Interest-bearing debt - cash and cash equivalents
Shareholders' equity/share
Equity attributable to equity holders of the parent
-----------------------------------------------------
Number of shares outstanding at end of period
Earnings/share
Profit for the period attributable to equity holders of parent
---------------------------------------------------------------
Average number of outstanding shares
ACCOUNTING PRINCIPLES
This Interim Report has been prepared in accordance with IAS 34 Interim
Financial Reporting. Accounting principles are described by detail in
Elisas' comparative IFRS information for 2004 which was published in 8
April 2005. Press release is availabe on Elisa's website at elisa.com.
