Canbras Releases Third Quarter Results.Business Editors MONTREAL--(BUSINESS WIRE)--Oct. 29, 2002 Canbras Communications Corp. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CBC (1) (Cell Broadcast Center) See cell broadcast. (2) (Cipher Block Chaining) In cryptography, a mode of operation that combines the ciphertext of one block with the plaintext of the next block. ) -- Revenue increases 8.7% from third quarter of 2001 to reach $14.8 million -- EBITDA grows to $3.7 million from $0.5 million a year ago -- Cable subscribers exceed 188,000, up 16.5% from September 2001 -- Internet access subscribers exceed 12,400, up 59.8% from September 2001 -- Completion of a strategic, sales and marketing agreement with UOL Canbras Communications Corp. (TSX:CBC) ("Canbras" or the "Corporation") today released results for the third quarter ended September September: see month. 30, 2002. Renato Renato may refer to:
loonie dollar - the basic monetary unit in many countries; equal to 100 cents . Canbras has been successful in growing its revenues and 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 compared to the third quarter of 2001 by concentrating on subscriber growth and by implementing cost reduction measures. Although Canbras currently anticipates 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. results will reach the low-end low-end adj. 1. Cheapest in a line of merchandise: low-end subcompact cars. 2. Informal Of, relating to, or intended for low-income consumers; downscale: of the range set in our updated guidance given last quarter, the Corporation faces a significant challenge in the current environment in implementing appropriate refinancing Refinancing An extension and/or increase in amount of existing debt. plans to meet cash requirements for 2003 and 2004." Mr. Ferreira added: "During the quarter, Canbras completed a significant partnership agreement with Universo OnLine UOL (Bovespa UOLL4), once known as Universo Online, is a Brazilian online service provider and internet service provider. It is the leader in Latin America and the homepage portal is the biggest in the Portuguese speaking world. ("UOL UOL Universo Online (Brazilian internet provider) UoL University of London UOL Ultima on Line (multiplayer role-playing game) UOL Unit of Learning UOL Upper Operating Limit UOL Underwater Object Locator "), the largest fee-based ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. in Brazil. Under the agreement, the approximately 10,000 residential ISP customer contracts currently at Canbras Net will be transferred to UOL while Canbras will retain these customers as cable television and internet access See how to access the Internet. subscribers. In exchange, Canbras will share in the revenues generated by these customers over the next three years. Canbras Net will retain its corporate ISP customers. Also under the agreement, the Canbras Group and UOL will jointly market Canbras' high-speed access and UOL's ISP products to new residential customers. This agreement represents a significant strengthening of our residential Access/ISP package mix and fits into Canbras' strategy of concentrating on its core businesses." Results review Third Quarter 2002 versus Third Quarter 2001 Revenue for the quarter reached $ 14.8 million, anincrease of 8.7% over the third quarter of 2001. The increase was primarily as a result of cable and access subscriber growth and price increases, partially offset by an unfavourable variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality in the translation rate of the Brazilian real into Canadian dollars. In Brazilian reais, revenue for the third quarter of 2002 increased by more than 31% over the third quarter of 2001. EBITDA (earnings before interest, taxes, depreciation, amortization and foreign exchange) increased substantially to $3.7 million in the third quarter, compared to $0.5 million in the third quarter of 2001. This increase was mainly due to a reduction in 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. driven by a devaluation in the Brazilian real, higher revenues and a reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of $0.8 million, from 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 to foreign exchange, related to the foreign exchange on accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. and unpaid programming costs incurred prior to June 30, 2002. The Corporation recorded a net loss of $1.7 million in the quarter, compared to a net loss of $5.7 million in the third quarter of 2001, primarily due to higher EBITDA and increased interest income partially offset by foreign exchange losses. Year-to Date 2002 versus Year-to Date 2001 Revenue for the nine months ended September 30, 2002 was $48.5 million, up 19% over the same period of the previous year. This increase was primarily driven by growth in cable subscribers, data services and average revenue per subscriber, partially offset by a 14% unfavourable variance in the translation rate of Brazilian reais into Canadian dollars. In Brazilian reais, revenue for the nine months ended September 30, 2002 increased by more than 34% over the corresponding period of 2001. EBITDA for the nine months ended September 30, 2002 reached $8.5 million up from negative $0.1 million in the same period of 2001, primarily due to increased revenue and reduced operating expenses resulting from the devaluation of the Brazilian real and the closing of the Montreal office in the second half of 2001. The Net Loss for the nine months ended September 30, 2002 was $6.5 million, compared to a Net Loss of $17.3 million in the prior year period. This improvement is attributable to the increased EBITDA and net foreign exchange gains on liabilities denominated in reais, partially offset by higher depreciation charges. Capital expenditures for the nine months ended September 30, 2002 was $8.2 million compared to $46.7 million for the first nine months of 2001. This decrease was mainly due to reduced investment in network expansion and lower net additions in homes passed and subscribers. During the first nine months of 2002, cash declined by $19.2 million primarily due to the repayment of $15 million of debt due to financial institutions, capital expenditures as well as cash used for discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . As existing cash and cash generated from operations are not expected to be sufficient to meet approximately $15 million due to financial institutions in May 2003 and certain other obligations over the next 12 months, Canbras is pursuing refinancing alternatives as well as new sources of financing. There can be no assurance that such refinancing or any new financing can be arranged on acceptable terms or at all. Quarterly Conference Call Canbras' third quarter 2002 conference call with analysts will be held on October 31, 2002 at 2h00 p.m. and will be made available via an audio webcast. To follow the audio presentation live via the Internet, please visit www.ir-live.com. The webcast will also be available live on www.vcall.com. We recommend that you visit www.ir-live.com prior to the meeting to ensure you have the proper software. The conference call will also be archived on www.ir-live.com, and www.vcall.com. General Canbras, through the Canbras Group of companies, is a leading 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). communications services provider in Brazil, offering cable television, Internet and data services in Greater Sao Paulo and surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. areas and the State of Parana. Canbras Communications Corp.'s common shares are listed on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the trading symbol Trading symbol See: Ticker symbol CBC. Visit our web site at www.canbras.ca. Forward looking statements This news release may contain certain 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. that reflect the current views and/or expectations of Canbras with respect to its performance, business and future events. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance, or achievements, and may contain words like "believe" "anticipate", "expect", "will likely result", or words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly.
CANBRAS COMMUNICATIONS CORP.
SELECTED CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
(in thousands of Canadian dollar)
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Three Months Nine Months
Ended Ended
September 30, September 30,
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2002 2001 2002 2001
(restated) (restated)
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$ $ $ $
Revenue
Broadband cable services
Cable television 12,862 12,563 42,302 38,412
Internet access 882 432 2,651 1,047
Data transmission 592 311 2,156 569
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14,336 13,306 47,109 40,028
ISP services 462 303 1,415 725
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14,798 13,609 48,524 40,753
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EBITDA
Broadband cable services 3,987 2,004 10,089 4,656
ISP services 125 (180) 326 (712)
Corporate (384) (1,367) (1,965) (4,080)
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3,728 457 8,450 (136)
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Net loss from Continuing ops. (1,692) (5,824) (6,459) (17,829)
Net income from
Discontinued ops. - 97 - 583
Net Loss (1,692) (5,727) (6,459) (17,246)
Capital expenditures
Broadband cable services 2,099 9,690 8,163 46,407
ISP services - 58 34 264
Corporate - 1 - 8
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2,099 9,749 8,197 46,679
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Foreign Exchange rates
Rs/C$- at period end 2.4539 1.6923 2.4539 1.6923
Rs/C$- average for the period 1.9881 1.6502 1.6713 1.4713
As at As at
September 30, December 31,
2002 2001
(restated)
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$ $
Cash and cash equivalents 15,853 35,072
Current assets 21,129 42,241
Fixed assets, net 113,861 122,909
Total assets 196,946 251,761
Total debt 34,664 55,796
Total liabilities 74,905 104,186
Shareholders' equity 122,041 147,575
CANBRAS COMMUNICATIONS CORP.
SELECTED OPERATING STATISTICS
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As at As at
September September
30, 2002 30, 2001 Variation
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Broadband cable services:
Homes passed 866,652 787,101 10.1%
Km of activated plant 4,158 4,047 2.7%
Cable television subscribers 188,245 161,608 16.5%
Internet access subscribers 12,433 7,780 59.8%
Premium subscribers 74,727 77,062 (3.0%)
% of activated plant bi-directional 80% 63% n/a
Penetration of homes passed 21.7% 20.5% n/a
Year-to-date average gross revenue
per subscriber (in Reais)
Cable television 49.74 48.26 3.1%
Internet access 53.61 48.70 10.1%
Year-to-date average net revenue
per subscriber (in Reais)
Cable television 43.72 42.95 1.8%
ISP services:
Residential subscribers(a) 9,805 5,591 75.4%
Commercial subscribers 572 274 108.8%
n/a - not applicable
(a) Being transferred to UOL
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. |
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