Tecnotree Corporation Financial Review 1 January – 31 December 2012 (unaudited)

Tecnotree Corporation
Financial Review
6^th February, 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.

Strong cash flow in fourth quarter

Fourth quarter

• Cash flow after investments was EUR 5.5 (-3.5) million. The company’s cash and cash equivalents were EUR 11.3 million at year end (EUR 6.7 million on 31 December 2011).
• Net sales were EUR 22.4 (16.1) million. The adjusted operating result for the quarter was  -0.3 (-2.0) million. This includes impairment of EUR 3.9 million on receivables from customers and changes s for previous periods totalling EUR 0.3 million that weakened the result. Without these the adjusted operating result would have been EUR 3.9 million positive.

Full year 2012

• Cash flow after investments was EUR -0.8 (-18.1) million.
• The company’s financial situation was difficult at times. In June the company carried out a share issue through which it obtained EUR 5.4 million in equity after costs. In October the company obtained a credit facility for financing working capital of EUR 5.0 million.
• The order book at the end of the period stood at EUR 54.2 (31 December 2011: 40.4) million. Order intake totalled EUR 87.2 (88.5) million.
• Net sales in the year totalled EUR 73.4 (62.3) million and the adjusted operating result was EUR -4.9 (-1.7) million. Without the EUR 3.9 million impairment on receivables from customers, the adjusted operating result would have been EUR -1.0 million. The operating result was EUR -12.4 (-11.1) million and the result for the period EUR -17.0 (-15.6) million.

2013

• The 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.
   

  * 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 fourth quarter and 18 per cent for the whole year from the previous year. The order book also continued to grow and was 34 per cent higher at the end of the year than at the end of the previous year. Orders received during the year and the order book at the end of the year were higher in 2011 and in 2012 than ever before.  We consider these signs of strong demand and of the gradual implementation of our change in strategy. The large orders we have received for new systems require major investments in R & D, which has raised costs more than was planned. For this reason, and because of the impairment on receivables from customers, the whole year was loss-making. Without this impairment the adjusted operating profit for the fourth quarter would have been EUR 3.9 million.
Results will improve in the future as the company achieves repeat sales of the new systems under development. In addition, through projects to optimise project management, quality, process development and working capital, we are aiming at continuous improvement of the cash flow, profitability and customer satisfaction. The company’s financial position has improved in consequence of these measures. Cash flow after investments improved EUR 17.3 million from last year. Customer activity indicates that growth will continue during 2013.”

Events after the end of period

No significant events have occurred after the end of the period.

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.

Proposal concerning the result

The Board of Directors propose to the Annual General Meeting, that no dividend be paid for the financial year ended 31 December 2012, and that the parent company’s loss for the financial year, EUR 15,445,987.34, be covered by non-restricted equity reserves.

Financial information

Tecnotree is holding a conference for analysts and the media to announce its nine month results at 10.00 am on 6^th February 2013 in the Tapiola conference room at the Scandic Hotel Simonkenttä, Simonkatu 9, Helsinki. The financial statements 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