CESKE RADIOKOMUNIKACE a.s. Announces First Half Year IAS Results; Net Income Up 28.7% Compared to 1st Half 1998 Contactel Gets the Go-Ahead.PRAGUE, Czech Republic--(BUSINESS WIRE)--Sept. 9, 1999-- The Board of CESKE RADIOKOMUNIKACE a.s. ("CRa"), a leading Czech telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. company listed on the Prague and London Stock Exchanges London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. , today approved the financial results for the first six months of 1999 to 30 June, prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with International Accounting Standards ("IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. ") and released the following announcement. The key results are as follows: - Total revenues up 5% to CZK CZK In currencies, this is the abbreviation for the Czech Koruna. 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. 1,098 million (US$31m) from first half 1998 - Income before tax rose 28.2% to CZK 516 million (US$14.6m) - Net Income rose 28.7% to CZK 523 million (US$ 14.8m) - Television broadcasting revenues rose slightly to CZK 287.5 million, an increase of 2.3% on the same period in 1998 - Radio broadcasting The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. revenues remained steady at CZK 176.9 million (US$5m) - Revenues from telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. down 2.5% to CZK 462.7 million (US$13.1m) - Revenues from satellite services increased by 12.4% to CZK 33.3 million (US$0.9m) - Contribution to net income from RadioMobil (CRa's 51%-owned mobile telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. business) rose 122.6% to CZK 209 million (US$5.9m) - EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become margin at 49.9% - Contactel, CRa's 50/50 joint venture with Tele Danmark A/S, aimed to become the alternative provider of integrated telecommunications services in the Czech Republic Czech Republic, Czech Česká Republika (2005 est. pop. 10,241,000), republic, 29,677 sq mi (78,864 sq km), central Europe. It is bordered by Slovakia on the east, Austria on the south, Germany on the west, and Poland on the north. began operating in April this year - RadioMobil's revenues totalled CZK 4, 599 million (US$ 129.9) in first half 1999, up by 77% compared to the 1st half 1998 - RadioMobil's customer base reached 541,000 in first half 1999, and in August 1999 RadioMobil's customers base reached 600,000 - RadioMobil's GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. market share in the Czech Republic increased from 39% to 42% during the first half 1999. Revenues Total revenues of CRa for the first half of 1999 grew by 5% to CZK1,098 million (US$ 31m). Revenues from TV and radio broadcasting have remained stable throughout the first half of 1999 while the share of total revenues attributable to TV and radio broadcasting was slightly up on the same period of 1998. Revenues from telecommunications services provided over the Company's transmission network fell slightly by 2.5% to CZK 462.7 million (US$ 13.1m) in the first half of 1999. This was anticipated owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de the falling revenues received by SPT (Sectors Per Track) The number of sectors in one track. Telecom, who is transferring its traffic to its own network, which is still in the process of being built. SPT Telecom now contributes less than 1% of total revenues, down from 13% for the same period of 1998. This fall will be a one off. There was strong revenue growth in data services business, operating under RadioNet with a 30.7% increase in revenues from the first half of 1998 to the same period in 1999. Revenues from RadioMobil grew by 19.4%. RadioMobil currently accounts for 36% of telecoms revenues and RadioNET for 30% accordingly. 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. Operating expenses for the six months of 1999 to June 30, were up 34.3% to CZK 1,018 million (US$ 28.8 m). This increase is predominately attributable to financial results consolidation with acquired companies Softlink and Datalink, as well the recently established telecoms subsidiary, Contactel. There was a 19.4% increase in personnel costs to CZK 245 million (US$ 6.9m) on the same period of 1998. The other significant factor contributing to the increase in operating expenses arose from an increase of CZK 410 million (US$ 11.6m) in depreciation and amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. costs, arising from the higher value of CRa property and from the above mentioned financial consolidation. Contactel Contactel is a 50/50 joint venture with Tele Danmark and is considered by the Company to be one of the key business areas for future growth. The Company was established in April this year and is aiming to become the alternative provider of integrated telecommunications services in the Czech Republic, providing 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 and data services for both residential and business customers. Ahead of plans, Contactel has successfully launched leased line 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 Internet access See how to access the Internet. and plans to offer dial-up Internet services for mass market as of September 1999. The product portfolio will be further extended with data services and services for closed user groups. Contactel is continuing its preparations for entry into the voice telephony market at the beginning of 2001 and will be ready to provide its services on day one of the liberalisation n. 1. Same as liberalization. Noun 1. liberalisation - the act of making less strict liberalization, relaxation alleviation, easement, easing, relief - the act of reducing something unpleasant (as pain or annoyance); "he asked the nurse of the market in the Czech Republic. In August 1999, CRa's Extraordinary General Meeting took place to approve the increase in equity for Contactel, for up to CZK 900 million (US$ 25.4m). CRa anticipates Contactel will be making a significant contribution to the Company's revenues. Innovations / Investments CRa's overall capital expenditure budget for 1999 is approximately CZK 1, 813 million (US$ 51.2m). This compares to capital expenditure for 1998, which totalled approximately CZK 981 million (US$ 32.9m). The largest proportion of investments are focused on the development of the Company's transmission network, which consists of backbone radio relay network, access network, GSM connections, Point-to-Multipoint radio facilities and data radio relay network providing access for RadioNET. CRa has started to build its own optical network and intends to continue negotiating with providers of long-distance (backbone) optical networks. Apart from the standard data access network provided by radio relay links, CRa improved individual customers' access by finalising and starting-up of the data satellite VSAT (Very Small Aperture satellite Terminal) A small earth station for satellite transmission that handles up to 56 Kbits/sec of digital transmission. VSATs that handle the T1 data rate (up to 1.544 Mbits/sec) are called "TSATs. systems. The aim of these innovations is to enable the Company to provide customers with future technologies such as ATM technology. CRa became one of the first providers of nation-wide broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). ATM services in the Czech Republic. Furthermore, CRa has the strategic intention to develop a digital network for radio and TV broadcasting. The experimental T-DAB T-DAB Terrestrial Digital Audio Broadcasting project has been operating successfully in Prague since March of this year. Further investments were focused on the development of the information systems, on the construction activities of CRa, on control and measurement of its equipment and operations, and on an integrated electronic security solutions project. RadioMobil a.s, a joint-stock company joint-stock company A rare type of business organization characterized by some features of a partnership and some features of a corporation. Shares are transferrable and the company is assessed taxes according to corporate tax rates. , operates the GSM network called Paegas In the first half of 1999, RadioMobil, one of the two GSM mobile operators in the Czech Republic, achieved a net profit of CZK 420 million (US$ 12.2 m). This is an increase of 127% from the same period of 1998. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. increased by 190% to CZK 850 million (US$ 24.6m). Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for half year 1999 increased by 77%, to CZK 4.6 (US$ 133m) from the same period of 1998. The EBITDA margin reached 31.1% and the operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: reached 18.5%. In terms of new customers, Radiomobil continues to be the leading mobile communications operator and the fastest growing operator in the Czech Republic. During the first six months of 1999, RadioMobil`s share of the Czech GSM market increased from 39% to 42%. Since the beginning of the year, the number of customers using Paegas services has increased by more than 60%. The number of RadioMobil's subscribers increased by 45% in the first half of 1999, with 600,000 customers as at August 1999. The number of roaming The ability to use a communications device such as a cellphone or PDA and be able to move from one cell or access point to another without losing the connection. partners continues to grow. Currently, RadioMobil has 143 partners in 72 countries world-wide. Total investments in the first half of 1999 were CZK 2.2 billion (US$ 64m). RadioMobil has a leading position world-wide in implementing new GSM network services on the mobile telephony market. In June 1999, RadioMobil was one of the first companies internationally to sign a contract with Motorola for the implementation of the GPRS (General Packet Radio Service) The first high-speed digital data service provided by cellular carriers that used the GSM technology. GPRS added a packet-switched channel to GSM, which uses dedicated, circuit-switched channels for voice conversations. technology. RadioMobil intends to issue bonds to raise around CZK 3 billion (US$ 87m) with a five-year term in order to increase funding for the ongoing investment programme. Chairman's Comment Commenting on the first year half 1999 results, Miroslav Curin, 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. and Chairman of the Board of CESKE RADIOKOMUNIKACE a.s. said: "Total revenues of the company increased 5% to CZK 1,098 million (US$ 31.4 million) compared to the same period last year. The overall operational results, however, reflected continuing economic recession and higher competition in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. market. "We consider the most important event of the first half-year 1999 to be the signing of the framework agreement between CRa and Tele Danmark in January, 1999 to establish the 50/50 joint-venture, Contactel. Furthermore, on August 19, the Extraordinary General Meeting approved the increase in Contactel's equity up to CZK 900 million (US$ 25.4 million). The basic conditions for the further development of Contactel were created accordingly, as well as for the successful achievement of the new joint-venture's goal - to become the preferred telecommunications company See telecom company. in the Czech Republic and the main competitor for SPT Telecom, once the telecommunications market is liberalized in 2001. We believe Contactel's success will have a positive impact on CRa's results. "Another significant fact related to the future development of our company is the decision approved by the Czech government to privatize pri·va·tize tr.v. pri·va·tized, pri·va·tiz·ing, pri·va·tiz·es To change (an industry or business, for example) from governmental or public ownership or control to private enterprise: "The strike ... CRa by selling the State's stake of 51% through an international share offer." Managing Director of RadioMobil's Comment Commenting on the first half 1999 results, Mr. Klaus Tebbe, Managing Director of RadioMobil, a.s., said: "The first six months of this year were exceptionally successful for RadioMobil a.s. Revenues increased to CZK 4.6 billion (US$ 130m), compared with CZK 2.6 billion (US$ 77.8m) in the same period last year. Furthermore, during the first half of this year, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. international accounting standards, RadioMobil achieved net profits amounting to CZK 420 million (US$ 11.9m), an increase of 127% compared to the same period of 1998. Once again we will, of course, re-invest all of this year's profits. The money will go, above all else, towards further construction of the Paegas GSM network, towards the purchase and implementation of new technologies and the expansion of our coverage indoors. During the first six months of this year alone, our investment amounted to a total of CZK 2.2 billion (US$ 62m). Our Company has thus, in the three years of its existence in the Czech Republic, already invested a total sum of more than CZK 12 billion (US$ 370m)." Notes Copies of this press release are available from Citigate Dewe Rogerson at the following address: Emma Pickford Citigate Dewe Rogerson 3 London Wall London Wall was the defensive wall built by the Romans around Londinium, their strategically important port town on the River Thames in England. The name London Wall, as explained below, may also be used to refer to a road related to this wall. Buildings London Wall London EC2M 5SY Tel: +44 171 638 9571 1. Amounts and figures in the income statement and balance sheer have been translated into US$ at an exchange rate for 30 June 1999, of CZK 35.399 = US$1 and for 30 June 1998, of CZK 33.423 = US$1. 2. The attached income statement and balance sheet of CRa were reviewed by CRa`s auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together , Deloitte & Touche. 3. The Company's interest in RadioMobil has been reflected in these financial statements under the equity method of accounting in accordance with International Accounting Standards. -0-
CESKE RADIOKOMUNIKACE a.s.
INCOME STATEMENTS FOR THE PERIOD ENDING JUNE 30, 1999
AND JUNE 30, 1998 (Prepared In Accordance With
International Accounting Standards)
30 June `99 30 June `98
000 CZK 000 CZK
Revenues 1 098 444 1 047 067
Cost of Sales 258 189 228 471
--------------------------------
GROSS PROFIT 840 255 818 596
--------------------------------
Other Operating Income 2 736 4 360
Staff Costs (244 740) (204 892)
Depreciation & Amortisation (409 887) (259 196)
Other Operating Expenses (107 795) (69 083)
--------------------------------
OPERATING INCOME 80 569 289 785
Financial Income /(Expense) -435 688 -112 954
INCOME BEFORE TAX 516 257 402 739
Taxes (202 263) (90 229)
--------------------------------
INCOME AFTER TAX 313 994 312 510
Net Income from Associates 209 279 94 029
================================
NET PROFIT / (LOSS) 523 273 406 539
================================
CESKE RADIOKOMUNIKACE a.s.
BALANCE SHEET AS AT 30 JUNE 1999 AND 30 JUNE 1998
(Prepared In Accordance With International Accounting Standards)
30 June 99 30 June 98
000 CZK 000 CZK
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents 2 802 345 4 438 746
Accounts Receivable and
Prepayment 288 158 226 920
Inventories 215 528 106 889
Other Current Assets 12 118 10 753
-----------------------------------
Total Current Assets 3 318 149 4 783 308
-----------------------------------
NON-CURRENT ASSETS
Property, Plant & Equipment 4 338 563 3 710 529
Intangible Assets 40 648 35 667
Goodwill 406 430 -
Investments 3 198 735 2 771 771
Long Term Prepayments 27 014 35 750
-----------------------------------
Total Non-Current Assets 8 011 389 6 553 717
-----------------------------------
===================================
TOTAL ASSETS 11 329 538 11 337 025
===================================
EQUITY AND LIABILITIES
CURRENT LIABILITIES
Payables 464 744 369 195
Short Term Borrowings 56 429 839 419
-----------------------------------
Total Current Liabilities 521 173 1 208 614
-----------------------------------
NON-CURRENT LIABILITIES
Deferred Tax Liability 90 633 87 035
Long Term Borrowings 17 142 73 571
Other Long Term Payables 173 975 59 986
-----------------------------------
Total Non-Current
Liabilities 281 750 220 592
-----------------------------------
CAPITAL AND RESERVES
Share Capital 3 078 516 3 078 451
Share Premium 3 303 104 3 305 136
Retained Earnings and
Other Reserves 4 144 995 3 524 232
-----------------------------------
Total Equity 10 526 615 9 907 819
-----------------------------------
===================================
TOTAL EQUITY AND
LIABILITIES 11 329 538 11 337 025
===================================
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