TECNOTREE CORPORATION SHORT REPORT 1 JAN – 31 MAR 2017 (UNAUDITED)
Tecnotree Corporation
Stock Exchange Release
28 April 2017 at 08:30am
TECNOTREE CORPORATION SHORT REPORT 1 JAN – 31 MAR 2017 (UNAUDITED)
Tecnotree is a global provider of IT solutions for the management of services, products, customers and revenue for Communications Service Providers. Tecnotree helps customers to monetise and transform their business towards a marketplace of digital services. Together with its customers, Tecnotree empowers people to self-serve, engage and take control of their own digital life.
FIRST QUARTER – RESULT IMPROVED
| AVAINLUVUT | 1-3/ 2017 | 1-3/ 2016 | 1-12/ 2016 |
| Liikevaihto, Me | 12.1 | 13.0 | 60.1 |
| Oikaistu liiketulos, Me 1 | 0.1 | -2.4 | 1.2 |
| Liiketulos, Me | -0.2 | -2.4 | -10.1 |
| Tulos ennen veroja, Me | -1.3 | -3.7 | -5.6 |
| Oikaistu kauden tulos, Me 2 | -1.9 | -4.6 | -4.2 |
| Kauden tulos, Me | -2.2 | -4.6 | -6.3 |
| Osakekohtainen tulos, euroa | -0.02 | -0.04 | -0.05 |
| Tilauskanta, Me | 28.3 | 28.2 | 24.9 |
| Rahavirta investointien jälkeen, Me | 2.6 | -1.9 | 0.4 |
| Rahavarojen muutos, Me | -2.1 | -2.9 | -1.7 |
| Rahavarat, Me | 1.4 | 3.3 | 3.5 |
| Omavaraisuusaste % | 16.3 | 24.5 | 23.9 |
| Nettovelkaantumisaste % | 255.7 | 149.0 | 145.2 |
| Henkilöstö kauden lopussa | 771 | 922 | 818 |
1 Adjusted operating result = operating result without one-time costs. Details of these are given in the section “Result analysis”.
2 Adjusted result for the period = result for the period without one-time costs in the operating costs and Q4/16 restructuring income in financial financial items.
CEO Padma Ravichander:
In many ways Q1-2017, can be defining quarter for Tecnotree.
This quarter substantiated our belief in the company and the path undertaken in the last few months.
At the top level, the quarter had a revenue of EUR 12.1 million, which is about 7% less than the same quarter last year (13.0).
As explained in our earlier quarter results announcement, the company has been facing significant reduction in LATAM sales region and challenges in the delivery of new products. In the last few months, the focus has been to consolidate existing business opportunities and has been successful in consolidating the revenue.
The bigger success in the quarter has been on the cost optimisation. Many initiatives were undertaken from Q3 -2016, which have resulted in significant reduction in operating costs.
The total operating costs for the quarter is EUR 10.8 million, which is the lowest in last many quarters. This is lower by 20% compared to same quarter in previous year (13.5).
The operative EBIT, without one-time costs for the quarter is EUR 0.1 million against (-2.4) in the same quarter of 2016.
While the result for the quarter is moderate, the turnaround of adjusted ebit is significant and reaffirms that the company is moving in the right direction.
The cash flow after the investments for the quarter was EUR 2.6 million. During this quarter substantial amounts were received from a LATAM customer with whom the company had initiated a settlement agreement in Q4-2016. Similarly good inflows were recorded in the other business regions as well. In the first quarter of 2017, Tecnotree repatriated remarkable amount of receivables from its customer in Latin America, which was used for repaying long-term debts.
Tecnotree won a few major new orders during the quarter. We won a Customer Life Cycle Management and Self Care product implementation for one of the largest operators in Western Africa and a Commerce engine upgrade for our Central American Customer.
Future scenario
We continue our efforts in cost minimisation and have initiated a plan for further reduction of costs by EUR 5 million, which will help the company financially in 2017 and 2018.
We are encouraged by the improved results of this quarter compared to last year and are equally committed to continuing our internal transformation journey to further reduce Opex, simplify our portfolio of products, and win in the marketplace with improved execution, quality
and agility and innovative business models.
PROSPECTS IN 2017
The liquidity of the company continues to be extremely tight, its financial situation and liquidity remain critical. The amount of overdue trade payables has continued to increase and, according to the estimated cash flow, will be negative in Q2 2017. At the time of publication of the financial statements, there is no certainty about the 12-month sufficiency of long-term, short-term and working capital financing. The company is engaged aggressively to collect its receivables from the key customers and is also negotiating with financiers on short term additional funding to secure liquidity. In addition, the company is also seeking long-term financing, which could be implemented through company or restructuring arrangements. The company’s ability as going concern is dependent on the successful completion of the financing transactions that are currently under negotiations and its ability to continue to execute the payment programs.
The company will continue the EUR 5 million saving program initiated last year. Given the current critical financial situation of the company, in addition Tecnotree announced in March about EUR 5 million further cost cuts in 2017. The company expects to achieve its targets by reducing rented premises, reducing travel expenses, focusing on locations, reducing external services and personnel costs. The company continues increased focus on further improvements of the quality and timeliness of deliveries.
However, Tecnotree does not provide an annual outlook for 2017 due to several uncertainty factors having impact on customer investments. These uncertainty factors relate to a fluctuation in dollar as well as the softening macroeconomic environment and political instability in some of its key markets in Latin America, the Middle East and Africa.
The company estimates that quarterly fluctuations are significant.
FINANCIAL INFORMATION
A press conference for analysts, investors and media will be held on Friday, 28 April 2017 at 10.00 am in Hotel Scandic Simonkenttä, conference room Tapiola, 1 floor, address Simonkatu 9, Helsinki. The conference will be held in English.
The Q1/2017 interim report will be presented by Padma Ravichander, CEO.
The material to be presented at the press conference will be available at www.tecnotree.com.
Tecnotree is listed on Nasdaq Helsinki (TEM1V).
For more information, please visit www.tecnotree.com.
TECNOTREE CORPORATION
Board of Directors
FURTHER INFORMATION
Further information, investors and media:
Padma Ravichander, CEO, tel +97 156 414 1420
Kirsti Parvi, CFO, tel +358 50 5174569
About Tecnotree
Tecnotree is a global provider of IT solutions for the management of services, products, customers and revenue for Communications Service Providers. Tecnotree helps customers to monetise and transform their business towards a marketplace of digital services. Together with its customers, Tecnotree empowers people to self-serve, engage and take control of their own digital life.
Tecnotree is listed on Nasdaq Helsinki (TEM1V). For more information, please visit www.tecnotree.com.