CORRECTION: Tecnotree Corporation Interim Review 1 January – 31 March 2013 (unaudited)

Tecnotree Corporation
Interim Review
29th April, 2013 at 16.15

CORRECTION: Table Net Sales by Market Area in PDF attachment Interim Review Q1/2013, page 4, has been corrected (only in English version).

Tecnotree Corporation
Interim Review
29^th April, 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.

Normal seasonal fluctuation in first quarter

• Net sales for the review period were EUR 13.9 million (EUR 10.0 million for the same period in the previous year) and the adjusted operating result was EUR -4.0 (-5.8) million. The operating result was EUR -4.6 (-7.2) million and the result for the period EUR -5.5 (-8.8) million.
• Cash flow after investments was EUR 1.6 (0.3) million and the company's cash and cash equivalents were EUR 10.5 (6.0) million.
• The order book at the end of the period stood at EUR 55.3 (36.2) million.
• Tecnotree reached agreement with LapGreenN, a company owned by the Libyan government, on outstanding receivables and on renewing their strategic partnership. Under the agreement Tecnotree will receive a total of USD 5.5 million in payments to be spread across 2013 and 2014. After the end of the review period, LapGreenN has paid Tecnotree USD 0.5 million after the reviewed period.

    
* Adjusted operating result = operating result before R & D capitalisation, amortisation of this and one-time costs. Details of these are given in the section “Result analysis”.
** The key figure is adjusted for all periods presented to reflect the share issue. Unless otherwise stated, all figures presented below are for the reviewed period 1-12/2012 and the figures for comparison are for the corresponding period 1-12/2011.

President and CEO Kaj Hagros:

”Net sales rose 39 per cent in the first quarter from the corresponding period in the previous year, even though no net sales were recorded during this quarter for the two largest projects in the order book because of the phasing of the projects. These projects will generate net sales later this year and will continue after this financial year. The order book also continued to grow and was 53 per cent higher at the end of the period than at the same time in the previous year. Cash flow after investments remained positive. Our customer relationships developed encouragingly. In February we announced that we were expanding our strategic partnership with MTN Group, the leading telecommunications provider in Africa. At the beginning of April we reported that we had reached agreement on historical receivables and renewing our partnership with LapGreenN, an Africa-wide group of operators. We also reported on changes to our organisational structure, aiming to boost the scalability of product development and the productivity of the delivery process. These measures lend support to our guidance of an increase in net sales and an improvement in profitability in the current year. ”

Events after the end of period

Tecnotree and LapGreenN, a company owned by the Libyan government, have decided to renew their strategic partnership and in connection with this have resolved their dispute over receivables mentioned previously in Tecnotree’s financial statements. The parties have agreed on the terms of their future collaboration, and the total value of the agreement is USD 5.5 million, with payment being spread over 2013 and 2014. As part of the agreement, Tecnotree will resume full maintenance services for the systems at the customer’s and will update the systems in use with the latest versions over the next 18 months. Tecnotree will book the income under the agreement after confirmation of each payment. With this new agreement the parties express their intention to expand their partnership into new areas. LapGreenN has paid USD 0.5 million under the new agreement, for which impairment booked previously has been reversed.

Prospects in 2013

Tecnotree’s order book at the end of 2012 stood at EUR 54.2 million, so the company moves into 2013 in a strong 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.

Financial information

Tecnotree is holding a conference for analysts, investors and the media to announce its first quarter results at 10.00 am on 29^th April 2013 in the Tapiola conference room at the Scandic Hotel Simonkenttä, Simonkatu 9, Helsinki. The interim review will be presented by CEO Kaj Hagros and the conference will be held in Finnish. The material to be presented at the press conference will be available at www.tecnotree.com.

TECNOTREE CORPORATION

Board of Directors

FURTHER INFORMATION
Kaj Hagros, President and CEO, tel. +358 40 849 1749
Tuomas Wegelius, CFO, tel. +358 400 433 228

DISTRIBUTION
NASDAQ OMX Helsinki Ltd.
Main media
www.tecnotree.com

About Tecnotree
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