1996 Financial Statements for the Tele Danmark Group.COPENHAGEN Copenhagen (kō`pənhā'gən, –hä'gən), Dan. København (kö'bənhoun`), city (1992 pop. 464,566; metropolitan area 1,339,395), capital of Denmark and of Copenhagen co. , Denmark--(BUSINESS WIRE)--March 18, 1997-- Tele Danmark's 1996 Financial Statements
Key Figures 1994 1995 1996 Change
(DKKm) 1995-96
Net revenues 17,975 19,000 23,304 22.7%
Income before financial items 4,175 4,293 4,547 5.9%
Financial items, net (249) 1,165 520
Income before income tax 3,926 5,458 5,067 (7.2)%
Net income 2,570 3,494 3,104 (11.2)%
Earnings per share (DKK) 19.62 26.67 23.69
Dividends per B share (DKK) 12.00 16.00 17.00
Profit ratio (%) 23.2 22.6 19.5
Return on equity (%) 15.9 14.1 11.5
Number of employees
(end of year) 16,678 16,476 16,768
Earnings per share has been calculated as net income divided by 131
million shares.
Consolidated net revenues aggregated DKK 23,304m in 1996, an
increase of just under 23% compared to 1995. Exclusive of Belgacom,
the increase was almost 6%.
In spite of substantially increased marketing expenses within mobile
telephone services, income before financial items and income tax rose
by almost 6% to DKK 4,547m.
Net financial income decreased by DKK 645m to DKK 520m. This
development is primarily attributable to a reduction in gains on
marketable securities and to the decreasing interest level.
Net income amounted to DKK 3,104m, a decrease of 11% compared to
1995. Earnings per share of nominal value DKK 10 were DKK 23.69
against DKK 26.67 in 1995.
The Board of Directors proposes payment of dividends of DKK 17.00
per B share of nominal value DKK 10 (1995: DKK 16.00). This
corresponds to a dividend payment of USD 1.43 per ADS, based on the
1996 year-end exchange rate of USD/DKK 5.94. (The exact amount of
dividends per ADS translated into US dollars will depend on the
exchange rate at the date of payment.)
1997 income before financial items is expected to exceed that of
1996, whereas financial items are expected to be lower than in 1996.
As an overall assessment, based on these forecasts, net income in
1997 is expected to be higher than in 1996, cf. the section on 1997
Outlook. The forecasts do not take into consideration additional
costs in connection with the announced reduction in the number of
employees of 2,000 in the period until mid-1998.
1996 Financial Statements
Net revenues for the Tele Danmark Group amounted to DKK 23,304m in
1996 against DKK 19,000m in 1995, corresponding to an increase of DKK
4,304m or 22.7%. The increase primarily reflects Belgacom's
inclusion in Tele Danmark's Consolidated Accounts from 1 April 1996.
Revenues generated by domestic activities rose by DKK 771m or 4.1%,
DKK 400m of which is mainly due to the development in mobile
telephone services.
The most important changes from 1995 to 1996 are as follows (DKKm):
Lowering of mobile telephone service rates (140)
Rate reductions due to the price cap regulation (133)
Reduction in the accounting rates on incoming
international traffic (210)
Acquisition of activities within television
programme production 100
Belgacom (with effect from 1 April 1996) 3,260
Other international activities 273
Other changes 1,154
Total 4,304
Adjusted for the above-mentioned changes, revenues increased by DKK
1,154m or 6.1%, reflecting the increase in business activities.
Operating expenses aggregated DKK 17,371m in 1996 against DKK
13,485m in 1995, corresponding to an increase of DKK 3,886m, of which
DKK 1,957m is attributable to Belgacom.
Raw materials and consumables totalled DKK 4,096m in 1996 against
DKK 3,514m in 1995, corresponding to an increase of DKK 582m. The
most important changes are as follows (DKKm):
Increased purchase of terminal equipment,
i.a. as a result of the extensive sale of cellular
phones in 1996 (226)
Increase in costs relating to work performed for
own purposes and capitalized (138)
General increases in price levels (31)
Increase in costs due to the acquisition of
Danish subsidiaries (43)
Belgacom (218)
Other changes 74
Changes, total (582)
Other external charges totalled DKK 6,969m in 1996 against DKK
4,941m in 1995, corresponding to an increase of DKK 2,028m. The most
important changes are as follows (DKKm):
Increased payments to foreign operators and
mobile companies due to increased traffic (173)
Reduction in the accounting rates on outgoing
International traffic 226
Increased marketing expenses relating to mobile
telephone services, including incentive payments to
retailers of cellular phones (570)
These expenses totalled DKK 913m in 1996.
Expenses incurred in acquired Danish subsidiaries,
including increased activities within television
programme production (57)
Belgacom (655)
Other international activities (220)
Additional costs for organizational restructuring (51)
Increase in costs relating to work performed for own
purposes and capitalized (382)
General increases in price levels (60)
Other changes (86)
Changes, total (2,028)
Wages, salaries and pension costs aggregated DKK 6,169m in 1996
against DKK 4,719m in 1995, corresponding to an increase of DKK
1,450m, of which DKK 1,084m is attributable to Belgacom and
approximately DKK 320m to increased activities in relation to the
Business Customer, Mobile, Cable TV and International divisions.
General pay increases in Tele Danmark A/S due to collective
agreements were 2.1% in 1996.
At 31 December 1996, Tele Danmark had 16,768 employees (exclusive of
associated enterprises) against 16,476 at 31 December 1995, an
increase of 292 or 1.8%. The number of people employed in the
Group's core activities declined by 849 (6.1%), while staff in the
Business Customer, Mobile, Cable TV and International divisions
increased by 1,141 employees.
The concession fee amounted to DKK 137m in 1996 against DKK 311m in
1995. The payment of the concession fee was terminated in connection
with the full liberalization of the Danish telecommunications market
at 1 July 1996.
Income before depreciation and amortization was DKK 8,799m in 1996
against DKK 7,568m in the previous year, corresponding to an increase
of DKK 1,231m or 16.3%.
Depreciation and amortization amounted to DKK 4,252m in 1996 against
DKK 3,275m in 1995, an increase of DKK 977m. DKK 921m of this
increase is attributable to Belgacom (including Tele Danmark's
amortization of goodwill in the amount of DKK 166m in connection with
the acquisition).
Income before financial items and income tax aggregated DKK 4,547m
in 1996 compared to DKK 4,293m in the previous year, corresponding to
an increase of DKK 254m or 5.9%. The most important changes are as
follows (DKKm):
Marketing relating to mobile telephone services (570)
Lowering of mobile telephone service rates (140)
Effect of price cap regulation (133)
Belgacom (with effect from 1 April 1996) 555
Termination of payment of the concession fee
at 1 July 1996 174
Additional costs for organizational restructuring (51)
Other changes 419
Changes, total 254
The deficit relating to international activities (exclusive of
Belgacom) aggregated DKK 289m in 1996 against DKK 298m in 1995.
The profit ratio, calculated as income before financial items and
income tax as a percentage of net revenues, was 19.5% in 1996 against
22.6% in 1995.
Net interest income amounted to DKK 481m in 1996 against DKK 727m in
1995, a reduction of DKK 246m. The funding of investments has
reduced net interest income by DKK 208m. Interest expenses of DKK
109m are attributable to the net liabilities of Belgacom. Increased
cash flow from operating activities has added DKK 198m to interest
income, whereas the decreasing interest level from 1995 to 1996
reduced net interest income by DKK 106m. Other activities resulted
in net interest expenses of DKK 21m.
Gains on marketable securities and foreign exchange amounted to DKK
51m in 1996 against DKK 416m in 1995. The duration of the bond
portfolio was 2.6 years at year end 1996, roughly the same as the
previous year.
Income tax for the year amounted to DKK 1,963m in 1996 against DKK
1,964m in 1995. The effective tax rate was 38.7% in 1996 against
36.0% in 1995. The virtually unchanged tax charge compared with the
reduction in income before income tax is mainly due to non-tax
deductible amortization of goodwill and non-capitalized tax losses in
companies which are not subject to group taxation.
Net income amounted to DKK 3,104m in 1996 against DKK 3,494m in
1995, a decrease of 11.2%. Earnings per share were DKK 23.69 in 1996
against DKK 26.67 in 1995. Return on average shareholders' equity,
net of tax, was 11.5%.
Net income for 1996 meets the expectations stated by the Company in
the Annual Report 1995 and the Interim Report 1996.
Belgacom was included in Tele Danmark's Consolidated Accounts as at
1 April 1996. The effects hereof can be summarized as follows
(DKKm):
Net revenues 3,260
Total revenues 3,433
Total operating expenses (1,957)
Income before depreciation and amortization 1,476
Depreciation and amortization
(including amortization of goodwill) (921)
Income before financial items and income tax 555
Financial items, net (94)
Income before income tax 461
Income tax (231)
Net income 230
Capital expenditures amounted to DKK 10,329m in 1996 compared to DKK
3,065m in the previous year. The payment for the ownership share in
Belgacom amounted to DKK 4,427m (exclusive of cash in the company,
etc.). Other international investments totalled DKK 457m and Tele
Danmark's share of the continued investments in the foreign companies
and projects aggregated DKK 1,732m.
Investments in the fixed-line network in Denmark totalled DKK
1,871m, an increase of 21% compared to 1995. Investments in
exchanges increased by 24% to DKK 1,020m as a consequence of
continued digitization, which is expected to be completed by year end
1998, and a significant increase in the number of ISDN customers.
Capital expenditures relating to the mobile network increased by
approximately 30% to DKK 478m due to the expansion of the network
capacity and coverage area as well as the improvement of the network
quality. Capital expenditures relating to other business activities
amounted to DKK 871m against DKK 321m in the previous year. The
increase is primarily attributable to the acquisition of a number of
companies within cable television, directory services and Internet
activities. Investments in support functions (mainly IT) amounted to
DKK 493m.
Net cash (computed as cash and marketable securities, net of
short-term bank loans, total long-term debt and repayments of
long-term debt in the coming year) totalled DKK 2.6bn at the end of
1996 (DKK 5.4bn exclusive of Belgacom) compared to DKK 8.9bn at year
end 1995.
Shareholders' equity aggregated DKK 27.9bn at 31 December 1996
compared to DKK 25.9bn at year end 1995. The solvency ratio,
calculated as shareholders' equity as a percentage of total
liabilities and shareholders' equity, was 59% (approximately 70%
exclusive of Belgacom) at year end 1996 against 69% in the previous
year.
Business Activities
Tele Danmark's consolidated net revenues are specified as follows:
Net revenues
(DKKm) 1994 1995 1996 Distribution
(%)
Domestic telephone services 7,305 7,488 7,735 33
International telephone services 3,006 2,989 2,828 12
Mobile telephone services 1,605 1,933 2,333 10
Supply and service of terminal
equipment, etc. 2,491 2,798 2,840 12
Leased lines 843 953 1,091 5
Operator services 514 553 546 2
Telephone directories 602 646 647 3
Data communications services 352 342 366 2
Cable television 344 409 576 2
Other Danish business activities 642 665 585 3
Danish business activities, total 17,704 18,776 19,547 84
Belgacom - - 3,260 14
Other international activities 271 224 497 2
International activities, total 271 224 3,757 16
Total 17,975 19,000 23,304 100
Net revenues from domestic telephone services amounted to DKK 7,735m
in 1996 against DKK 7,488m in 1995, corresponding to an increase of
3.3% in 1996. The increase in net revenues reflects a 1.8% increase
in the number of subscriber lines and a 3.0% increase in traffic,
which amounts to around thirteen billion minutes per year. Almost
2.0% of the increase is attributable to an increase in Internet
traffic. The traffic increase could be seen in the context of a
slower growth in the Danish economy, as the real growth in demand is
estimated to have been 1.1% in 1996 against 4.9% in 1995.
Domestic telephone services 1994 1995 1996
Telephone subscriber lines,
end of year (`000) 3,123 3,193 3,251
Growth (% per annum) 2.1 2.3 1.8
Growth in traffic volume
(% per annum) 4.5 2.5 3.0
Net revenues from international telephone services aggregated DKK
2,828m in 1996 against DKK 2,989m in 1995. The decrease of DKK 161m
or 5.4% is partly attributable to reductions in the rates on outgoing
international traffic corresponding to DKK 108m and partly to
reductions in the international accounting rates on incoming
international traffic corresponding to DKK 210m. These rate
reductions are partially offset by an increase of approximately 8% in
outgoing as well as incoming international traffic.
At 1 July 1996, full liberalization of the Danish telecommunications
sector was implemented - eighteen months earlier than the general
date laid down by the European Union. As a consequence of keener
competition, Tele Danmark has lost market shares in 1996 especially
within international telephone services of around two per cent on
average.
International telephone services 1994 1995 1996
Outgoing traffic (million minutes) 497 543 584
Growth (% per annum) 7.8 9.3 7.5
Incoming traffic (million minutes) 511 555 597
Growth (% per annum) 11.1 8.6 7.6
Transit traffic (million minutes) 70 89 134
Growth (% per annum) 37.3 27.1 50.6
Net revenues from mobile telephone services totalled DKK 2,333m in
1996 against DKK 1,933m in 1995, corresponding to an increase of
almost 21%. The increase is due to growth in the number of
subscribers and traffic volume. The number of subscribers was
806,000 at year end 1996, of which the GSM service had 524,000 and
the NMT service 282,000 subscribers. The increase in 1996 totalled
256,000 subscribers or 46.5%. The number of call minutes totalled
approximately 958 million in 1996, an increase of 30.5% compared to
1995. The reduction in the base rate at 1 April 1996 from DKK 2.50
to DKK 2.35 per minute reduced net revenues by approximately DKK
140m.
Mobile telephone services 1994 1995 1996
Subscribers, end of year (`000) 410 550 806
Growth (% per annum) 26.9 34.1 46.5
Traffic volume (million minutes) 555 734 958
Growth (% per annum) 25.3 32.3 30.5
Net revenues from international activities amounted to DKK DKK In currencies, this is the abbreviation for the Danish Krone. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 3,757m in 1996 against DKK 224m in 1995. The increase in net revenues, which is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to Belgacom The Belgacom Group, composed of Belgacom NV/SA and its subsidiaries, is the leading telecommunications company in Belgium. Group structure The Group is divided into three main fields of activity:
Of the remaining business activities, supply and service of terminal equipment, etc. was the largest contributor to revenues in 1996 with 12%. The increase in 1996 net revenues is largely due to strong growth in Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the activities. Net revenues generated by other business activities rose by almost 7% from DKK 3,568m in 1995 to DKK 3,811m in 1996. The increase is mainly attributable to cable television and leased lines A private communications channel leased from a common carrier. Most digital lines require four wires (two pairs) for full-duplex transmission. (communications, networking) leased line . 1997 Outlook Revenues generated by domestic activities are expected to show continued growth in 1997. The Company's marketing and development of services will be intensified in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: . In addition, higher economic growth is expected in 1997 than in 1996, which will strengthen the development in revenues. On the other hand, keener competition is expected due to the liberalization lib·er·al·ize v. lib·er·al·ized, lib·er·al·iz·ing, lib·er·al·iz·es v.tr. To make liberal or more liberal: "Our standards of private conduct have been greatly liberalized . . . at 1 July July: see month. 1996, which will lead to an additional loss of market shares within telephone services. The telephone rates are also expected to come under pressure, which may lead to price reductions exceeding those resulting from the price cap regulation. Forthcoming changes in the regulation of interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. traffic may lead to reductions in Tele Danmark's interconnect prices payable by other telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. operators, which will further intensify in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: competition within telephone services. The development in costs will reflect continued reductions in the number of people employed in Tele Danmark's core activities. The recent organizational restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). is expected to open up for structural rationalization rationalization, in psychology: see defense mechanism. and, consequently, reductions in the number of employees. Conversely con·verse 1 intr.v. con·versed, con·vers·ing, con·vers·es 1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak. 2. , the number of employees is expected to increase within the Business Customer, Internet, Mobile, Cable TV and International divisions. Other operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. are expected to increase, among other things due to the increased cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold in connection with the increase in revenues. An increase of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 2.5% in wages and prices is foreseen fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. for 1997. As a consequence of Tele Danmark's growth strategy, revenues from international activities will increase in the coming years. The aim is to enhance long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth opportunities, while investments, depreciation and costs, in particular, are going to rise in the short term. Based on the scenario A scenario (from Italian, that which is pinned to the scenery) is a synthetic description of an event or series of actions and events. In the Commedia dell'arte described above, the Company's income before financial items in 1997 is expected to exceed that of 1996. Interest expenses in associated enterprises are expected to increase, while a reduction is expected in the yield on the bond portfolio. As a consequence, financial items, net are expected to be lower in 1997 than in 1996. As an overall assessment, based on these forecast, net income in 1997 is expected to be higher than in 1996. The announced reduction in the number of employees of 2,000 in the period until mid- mid- pref. Middle: midbrain. 1998 may, however, result in significant additional costs in 1997 when making provisions for severance pay Severance Pay Compensation that an employer gives to someone who is about to lose their job. Notes: Severance pay is not always paid to employees. It depends on the situation in which the employee is losing their job and whether legislation requires severance to be paid. , redundancy payments redundancy payment n → indemnización f por desempleo redundancy payment n (Brit) → indemnité f de licenciement and pension contributions. This has not been taken into consideration in the above forecasts. The forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. reflect management's current views with respect to certain future events and financial performance. Forward-looking statements naturally involve uncertainties and the actual results may consequently differ materially from those projected or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in the statements. Further, certain forward-looking statements are based upon assumptions of future events which may prove not to be accurate. Factors which may cause actual results to differ materially from those projected or implied in the forward-looking statements herein include the economic trends and the development in the financial markets; technological developments; changes in applicable Danish regulation and EU regulation, hereunder Adv. 1. hereunder - in a subsequent part of this document or statement or matter etc.; "the landlord demises unto the tenant the premises hereinafter called the demised premises"; "the terms specified hereunder" hereafter, hereinafter 2. especially the forthcoming amendment to the Danish Act on interconnect traffic, which is expected to take effect in mid-1997; developments in competition within domestic and international telephone services due to the liberalization; introduction of and demand for new services and products; developments in the demand, the product mix and the prices within mobile telephone services, including marketing expenses; the development in the market for multimedia services; the possibility of being awarded mobile telephone licences in Denmark Denmark (dĕn`märk), Dan. Danmark, officially Kingdom of Denmark, kingdom (2005 est. pop. 5,432,000), 16,629 sq mi (43,069 sq km), N Europe. (DCS (1) See also DSC. (2) Digital Cross-connect System) A network switching and grooming device used by telecom carriers. See digital cross-connect. 1800) and abroad; development in the international activities, which also involve certain political risks; investments in domestic and foreign companies; and determination of provisions for costs in connection with staff reductions. Resolutions Passed by the Board of Directors At its meeting today, the Board of Directors of Tele Danmark approved the Group's Financial Statements 1996. The Board proposes dividends of DKK 10.00 per A share of nominal value Nominal Value The stated value of an issued security that remains fixed, as opposed to its market value, which fluctuates. Notes: When referring to fixed-income securities, the nominal value is also the face value. DKK 100 (unchanged) and DKK 17.00 per B share of nominal value DKK 10 (1995: DKK 16.00), corresponding to USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1.43 per ADS (based on the 1996 year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. exchange rate of USD/DKK 5.94). (The exact amount of dividends per ADS translated into US dollars will depend on the exchange rate at the date of payment.) Tele Danmark's Annual Report is scheduled for publication on 7 April 1997. The Annual General Meeting will be held in Aarhus Aarhus: see Århus, Denmark. on 28 April 1997 at 2.00 p.m. Knud Heinesen Hans HANS Head and Neck Support/System (brace worn by motor sport drivers; trademark of Hubbard/Downing, Inc.) HANS Health Action Network Society HANS Heavy Aromatic Naphtha Solvent Wurtzen Chairman of the Board Managing Director, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. FOR TABULAR tab·u·lar adj. 1. Having a plane surface; flat. 2. Organized as a table or list. 3. Calculated by means of a table. tabular resembling a table. INFORMATION, PLEASE CONTACT TAYLOR Taylor, city (1990 pop. 70,811), Wayne co., SE Mich., a suburb of Detroit adjacent to Dearborn; founded 1847 as a township, inc. as a city 1968. A small rural village until World War II, it developed significantly in the second half of the 20th cent. RAFFERTY Rafferty or Rafferty's rules Noun, pl Austral & NZ slang no rules at all [origin unknown] ASSOCIATES AT 212-889-4350 CONTACT: Tele Danmark A/S, Tel. +45 33 43 77 77 Investor Relations Investor relations The process by which the corporation communicates with its investors. , Fax +45 33 43 76 78 or Arnaud Arnaud or Arnauld (formerly Arnoul) is the French version of the given name Arnold. It may refer to: Surname
Tel 212-889-4350 |
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