OTE Group Reports Group First Quarter 2004 Results Under US G.A.A.P. -Unaudited-.Business Editors/High-Tech Writers ATHENS Athens, city, Greece Athens (ăth`ĭnz), Gr. Athínai, city (1991 pop. 2,907,179; 1991 urban agglomeration pop. 3,072,922), capital of Greece, E central Greece, on the plain of Attica, between the Kifisós and , Greece--(BUSINESS WIRE)--May 27, 2004 OTE OTE Chiefly Brit (esp. in job adverts) on target earnings: the minimum amount of money a salesman is expected to make OTE abbr (Comm) (= on-target earnings) → Einkommensziel nt (ASE (Adaptive Server Enterprise) A relational DBMS from Sybase that runs on Windows NT/2000, Linux and a variety of Unix platforms. ASE is a comprehensive and robust data management product with a long history dating back to the late 1980s. :HTO HTO Tritiated Water HTO High Tibial Osteotomy HTO High Temperature Oxidation HTO Hostile Take Over HTO Happy to Oblige HTO Horizontal Take-Off HTO Hydrogen Tritium Oxygen HTO Hospital Transfer Order , NYSE NYSE See: New York Stock Exchange :OTE) -- Operating Profitability Affected by Deteriorating de·te·ri·o·rate v. de·te·ri·o·rat·ed, de·te·ri·o·rat·ing, de·te·ri·o·rates v.tr. To diminish or impair in quality, character, or value: Greek In desktop publishing, to display text in a representative form in which the actual letters are not discernible, because the screen resolution isn't high enough to display them properly. The software lets you set which font sizes should be greeked. Fixed-Line Refers to wired devices. For example, a fixed-line phone is a standard phone with the handset wired to the base unit in contrast to a portable phone or cellphone. Performance: Continuing OPEX See CAPEX. Growth, Higher-Than-Expected Revenue Drop Due to Regulator regulator, n the mechanical part of a gas delivery system that controls gas pressure that allows a manageable flow of drug vapor to escape. regulator see reducing valve. Decision -- Continued Strong Performance of Mobile Operations; RomTelecom Romtelecom is the largest telecommunications company in Romania; the majority of shares are held by the Greek telecommunications company OTE (54.01% of shares). The Romanian state also has a minority stake of 45.99% in the company. Transformation Plan on Track -- New Management in Place; Stringent Turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. Plan under Development Hellenic Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. Organization SA (ASE:HTO, NYSE:OTE), the Greek full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. telecommunications provider, today announced consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: unaudited results (prepared under US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) for the quarter ended March 31, 2004.
CONSOLIDATED FINANCIAL HIGHLIGHTS FOR THE THREE MONTHS
ENDED MARCH 31, 2004 AND 2003 IN ACCORDANCE WITH U.S. GAAP
----------------------------------------------------------------------
%
EUR million except per share data Q1 04 Q1 03 Change
----------------------------------------------------------------------
Operating Revenues 1,228.8 1,100.2 11.7%
----------------------------------------------------------------------
Operating Income 164.1 236.7 -30.7%
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Pre-tax Income 145.6 221.5 -34.3%
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Net Income 49.1 113.1 -56.6%
----------------------------------------------------------------------
Operating income before depreciation and
amortization* 414.0 438.0 -5.5%
----------------------------------------------------------------------
Operating income before depreciation and
amortization as % of Operating revenues* 33.7% 39.8% -6.1 pp
----------------------------------------------------------------------
Basic EPS (EUR) 0.1002 0.2306 -56.5%
----------------------------------------------------------------------
Cashflow from Operations 291.6 186.3 56.5%
----------------------------------------------------------------------
CAPEX as % of Revenues 14.5% 15.3% -0.8 pp
----------------------------------------------------------------------
*See note on p. 14
Commenting on the quarter, Mr. Panagis Vourloumis, Chairman and 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. , noted: "OTE's first quarter results reflect the continuing deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. of the Group's domestic fixed-line operations, while Cosmote turned in another strong set of results, and RomTelecom remains on track. Though it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have only been a few days since I joined, I am confident that OTE has the skills, strengths and resources we need to reverse this slide - but I do not entertain any illusion Illusion See also Appearances, Deceiving. Barmecide feast imaginary feast served t0 beggar by prince. [Arab. Lit.: Arabian Nights, “The Barmecide’s Feast”] Emperor’s New Clothes that this will be an easy task. My immediate priorities are to aggressively attack our cost base, to resolve the issues arising from under-performing operations, internationally but also in Greece Greece, Gr. Hellas or Ellas, republic (2005 est. pop. 10,668,000), 50,944 sq mi (131,945 sq km), SE Europe. It occupies the southernmost part of the Balkan Peninsula and borders on the Ionian Sea in the west, on the Mediterranean Sea in the south, on , to simplify an overly complex organization, and to establish a new relationship with the Regulator - and I have already started working on all these fronts. To succeed in turning OTE around, I need the cooperation of all our people, the support of the authorities and the understanding of our shareholders." FINANCIAL HIGHLIGHTS Operating Revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. OTE's Operating Revenues increased by 11.7% in the three months ended March 31, 2004. This is largely due to the continued strong performance in 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. , both in Greece and abroad. In addition, RomTelecom was fully consolidated in the first three months of 2004; in 2003, RomTelecom entered the OTE Group scope of consolidation on March 1, and was therefore consolidated for only one month in the first quarter. Excluding RomTelecom, operating revenues would have remained stable in the first quarter of 2004, as higher revenues from Cosmote and, to a lesser extent, Globul GLOBUL (network code 284-05) is the second-largest Bulgarian GSM/UMTS operator. The company was founded in 2001 and is 100% owned by Greek telecommunications corporation Cosmote, which is active in five Balkan countries: Greece, Bulgaria, Romania, Macedonia and Albania. offset the decline in revenues from Greek fixed-line operations. The higher-than-anticipated drop in Greek fixed-line telephony revenues is due to the combined effect of reduced traffic and prices as well as the decision by the telecommunications regulator (NTPC NTPC National Thermal Power Corporation (India) NTPC Northwest Territories Power Corporation NTPC Northwest Territories Power Corporation (Canada) NTPC Navy Training Plan Conference ) to impose reductions on the 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 and interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. tariffs This is a list of tariffs and trade legislation:
In currencies, this is the abbreviation for the Euro. 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. 25.0 million reduction in operating revenues in the first quarter of 2004.
----------------------------------------------------------------------
%
EUR million Q1 04 Q1 03 Change
----------------------------------------------------------------------
Domestic Telephony 572.4 538.5 6.3%
----------------------------------------------------------------------
International Telephony 92.8 84.0 10.5%
----------------------------------------------------------------------
Mobile telephony services 344.5 260.6 32.2%
----------------------------------------------------------------------
Other 219.1 217.1 0.9%
----------------------------------------------------------------------
Total 1,228.8 1,100.2 11.7%
----------------------------------------------------------------------
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. Payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. and Employee Benefits increased by 30.7% to EUR 321.1 million in the first quarter of 2004. Of the total EUR 75.4 million increase compared to the first quarter of 2003, approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. EUR 53.8 million is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the consolidation of RomTelecom. In Greek fixed-line operations, payroll and employee benefits increased by 6.4% to EUR 209.2 million. Voluntary Retirement Costs totaled EUR 27.7 million for the first quarter of 2004, representing the cost for approximately 750 employees leaving the company under the Voluntary Retirement program; compared to EUR 9.2 million in the first quarter of 2003; severely impacting quarterly results. Payments to International Operators decreased by 20.0% to EUR 36.1 million, reflecting the continuing drop in international traffic. Payments to Mobile Operators increased by 13.2% to EUR 151.0 million. These payments do not include payments to Cosmote, but include payments from Cosmote to other mobile operators. Depreciation and Amortization increased by 24.1%, to EUR 249.9 million in the first quarter of 2004. This increase reflects the consolidation of RomTelecom, as well as significant infrastructure investments completed in 2003 at Globul, Cosmofon Founded in 2003, Cosmofon was the second GSM mobile phone operator in Macedonia. The first call through the network of Cosmofon took place on May 16, 2003, and now it's network codes are 075 and 076. Cosmofon commenced its commercial operation on June 12, 2003. and HellasSat. Other Operating Expenses increased by 21.9% to EUR 278.9 million, partly reflecting the consolidation of RomTelecom. An analysis of Group Other Operating expenses follows:
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%
EUR million Q1 04 Q1 03 Change
----------------------------------------------------------------------
Commission to dealers 27.3 31.5 -13.3%
----------------------------------------------------------------------
Cost of equipment 26.3 30.9 -14.9%
----------------------------------------------------------------------
Repairs, maintenance, Cost of telecom materials 53.7 32.9 63.2%
----------------------------------------------------------------------
Provision for doubtful accounts 26.0 23.3 11.6%
----------------------------------------------------------------------
Advertising 18.6 11.0 69.1%
----------------------------------------------------------------------
Taxes other than income taxes 6.8 6.2 9.7%
----------------------------------------------------------------------
Other 120.2 93.0 29.2%
----------------------------------------------------------------------
-Third party fees 32.0 30.8 3.9%
----------------------------------------------------------------------
-Travel costs 2.1 2.4 -12.5%
----------------------------------------------------------------------
-Audiotex 21.4 13.1 63.4%
----------------------------------------------------------------------
-Telecards 6.4 6.1 4.9%
----------------------------------------------------------------------
-Misc. 58.3 40.6 43.6%
----------------------------------------------------------------------
TOTAL 278.9 228.8 21.9%
----------------------------------------------------------------------
Excluding RomTelecom, other operating expenses would have grown by 13.3% in the quarter to EUR 239.8 million. The analysis of Group Other Operating expenses excluding RomTelecom follows:
----------------------------------------------------------------------
%
EUR million Q1 04 Q1 03 Change
----------------------------------------------------------------------
Commission to dealers 27.3 31.5 -13.3%
----------------------------------------------------------------------
Cost of equipment 26.3 30.1 -12.6%
----------------------------------------------------------------------
Repairs, maintenance, Cost of telecom materials 40.8 28.2 44.7%
----------------------------------------------------------------------
Provision for doubtful accounts 25.6 23.0 11.3%
----------------------------------------------------------------------
Advertising 18.2 10.7 70.1%
----------------------------------------------------------------------
Taxes other than income taxes 5.0 4.6 8.7%
----------------------------------------------------------------------
Other 96.6 83.6 15.6%
----------------------------------------------------------------------
-Third party fees 24.7 28.1 -12.1%
----------------------------------------------------------------------
-Travel costs 1.7 2.3 -26.1%
----------------------------------------------------------------------
-Audiotex 19.8 12.8 54.7%
----------------------------------------------------------------------
-Telecards 3.8 6.1 -37.7%
----------------------------------------------------------------------
-Misc. 46.6 34.3 35.9%
----------------------------------------------------------------------
TOTAL 239.8 211.7 13.3%
----------------------------------------------------------------------
Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. before depreciation and amortization For the first quarter of 2004, OTE Group Operating income before depreciation and amortization, including RomTelecom, amounted to EUR 414.0 million, or 33.7% of operating revenues. The drop in margin, from 39.8% in the comparable quarter last year, primary reflects the deterioration of operating performance in Greek fixed-line operations. Net Income Net Income for the three months ended March 31, 2004 reached EUR 49.1 million, down 56.6% from net income of EUR 113.1 million in last year's first quarter. This fall is mainly attributed to the drop in fixed-line revenues in Greece, significantly higher voluntary retirement costs and the slow progress in the area of operating cost reduction. Cash Flow Cash provided by operating activities amounted to EUR 291.6 million for the three months ended March 31, 2004.
CONDENSED CASHFLOW IN ACCORDANCE WITH U.S. GAAP
----------------------------------------------------------------------
EUR million Q1 04
Cash and Cash equivalents at beginning of period 601.3
----------------------------------------------------------------------
Net Cash provided by Operating Activities 291.6
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Net Cash used in Investing Activities (177.9)
----------------------------------------------------------------------
Net Cash provided by (used in) Financing Activities (34.7)
----------------------------------------------------------------------
Net Increase/(Decrease) in Cash and Cash Equivalents 79.0
----------------------------------------------------------------------
Cash and Cash Equivalents at end of period 680.3
----------------------------------------------------------------------
Capital Expenditure Capital expenditure in the first quarter of 2004 totaled EUR 177.9 million. Debt At March 31, 2004, OTE Group gross debt amounted to EUR 3,246.2 million, down 1.0% compared to December December: see month. 31, 2003. The total amount of OTE debt outstanding breaks down as follows: ---------------------------------------------------------------------- EUR million Mar 31, 2004 Dec 31, 2003 % Change ---------------------------------------------------------------------- Short-Term: ---------------------------------------------------------------------- -Bank loans 22.8 51.6 -55.8% ---------------------------------------------------------------------- Medium & Long-term: ---------------------------------------------------------------------- -Bonds 2,591.1 2,590.9 0.0% ---------------------------------------------------------------------- -Bank loans 594.6 597.5 -0.5% ---------------------------------------------------------------------- -Other loans 37.7 40.3 -6.5% ---------------------------------------------------------------------- Total Indebtedness 3,246.2 3,280.3 -1.0% ---------------------------------------------------------------------- SUBSEQUENT EVENTS On May 5, OTE announced the appointment of Panagis Vourloumis as its new Chairman and CEO, in replacement of Lefteris Antonacopoulos. This appointment is subject to ratification The confirmation or adoption of an act that has already been performed. A principal can, for example, ratify something that has been done on his or her behalf by another individual who assumed the authority to act in the capacity of an agent. by the June June: see month. 17, 2004 Annual General Meeting. One week later, the Board of Directors appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. Iacovos Georganas as Vice Chairman, in replacement of George George, river, c.345 mi (560 km) long, rising in a lake on the Quebec-Labrador boundary, E Canada. It flows N through Indian Lake (125 sq mi/324 sq km) to Ungava Bay (an arm of Hudson Strait). Skarpelis, and approved the appointment of Nicolas Stefanou as a new member. On May 24, the Board of Directors approved the 2003 statutory financial statements to be presented to the June 17 AGM AGM annual general meeting AGM n abbr (= annual general meeting) → AG f AGM n abbr (= annual general meeting) → JHV f , and proposed the payment of a dividend of EUR 0.35 per share. In May, OTE has filed an application for interim measures for provisional Temporary; not permanent. Tentative, contingent, preliminary. A provisional civil service appointment is a temporary position that fills a vacancy until a test can be properly administered and statutory requirements can be fulfilled to make a permanent appointment. non-application of the ruling of the Greek telecommunications regulator, NTPC, related to price cuts on wholesale leased-line and interconnection rates. A hearing is expected in June. 4. BUSINESS OVERVIEW OTE's segment reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four is based on its legal structure. A reconciliation of intersegment revenues to total revenues is provided, as below:
SEGMENT FINANCIALS FOR THE THREE MONTHS ENDED MARCH 31, 2004
----------------------------------------------------------------------
EUR All Adjustments & Consolid-
million OTE* COSMOTE RomTelecom Other Total Eliminations ated
----------------------------------------------------------------------
Revenues
from
external
customers 641.9 310.3 200.1 76.5 1,228.8 - 1,228.8
----------------------------------------------------------------------
Inter-
segment
revenues 54.1 48.2 1.1 38.1 141.5 (141.5)
----------------------------------------------------------------------
Total
revenues 696.0 358.5 201.2 114.6 1,370.3 (141.5) 1,228.8
----------------------------------------------------------------------
*For comparison purposes, OTE comprises the OTE parent company and OTE
Estate.
4.1. OTE FIXED-LINE
TRAFFIC STATISTICS FOR THE FIRST QUARTER OF 2004
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Call Service Category Calls, Average Call Minutes, Split of
millions Duration millions minutes
(minutes)
----------------------------------------------------------------------
Local 1,354.3 2.5 3,452.0 42.2%
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National Long-Distance 157.2 3.0 476.3 5.8%
----------------------------------------------------------------------
International Long-
Distance 25.4 3.7 92.8 1.1%
----------------------------------------------------------------------
Internet 167.7 22.0 3,697.3 45.1%
----------------------------------------------------------------------
Fixed-to-Mobile 326.6 1.3 416.3 5.1%
----------------------------------------------------------------------
Special Calls 89.6 0.7 58.3 0.7%
----------------------------------------------------------------------
Total 2,120.8 3.9 8,193.0 100.0%
----------------------------------------------------------------------
OTE estimates that its share of the Greek fixed-line market, as measured in call minutes, stood at approximately 87% in March 2004, unchanged from December 2003.
FIRST QUARTER ENDED MARCH 31, 2004 AND 2003
IN ACCORDANCE WITH U.S. GAAP (UNAUDITED)
----------------------------------------------------------------------
%
EUR million Q1 04 Q1 03 Change
----------------------------------------------------------------------
Operating Revenues 696.0 791.2 -12.0%
----------------------------------------------------------------------
Adjusted Operating Revenues* 696.0 781.5 -10.9%
----------------------------------------------------------------------
- Basic Monthly Rentals 158.5 157.0 1.0%
----------------------------------------------------------------------
- Fixed to fixed calls 150.3 183.7 -18.2%
----------------------------------------------------------------------
- Fixed to mobile calls 95.2 129.0 -26.2%
----------------------------------------------------------------------
- International 54.9 67.0 -18.1%
----------------------------------------------------------------------
- Other 237.1 254.5 -6.8%
----------------------------------------------------------------------
Operating Profit 29.0 138.7 -79.1%
----------------------------------------------------------------------
Operating income before depreciation and
amortization 182.3 276.0 -33.9%
----------------------------------------------------------------------
Operating income before depreciation and
amortization as % of Operating revenues 26.2% 34.9% -8.7 pp
----------------------------------------------------------------------
Depreciation & Amortization 153.3 137.3 11.7%
----------------------------------------------------------------------
*Up to January 31, 2003, OTE was billed by the mobile operators for
substantially all its revenue from calls placed from its network to
customers of the mobile operators. These charges were included in
"Payments to mobile telephony operators" in Operating Expenses.
Simultaneously, OTE charged the mobile operators an interconnection
fee relating to such calls, which was included in "Interconnection
charges" in Other Operating Revenues. Effective February 1, 2003,
OTE, based on new arrangements made with the mobile operators, no
longer charges an interconnection fee for such calls but pays a
charge per minute at rates determined in the new agreements. Adjusted
Operating Revenues eliminate the effect of that change.
On an adjusted basis, fixed-line operating revenues declined by 10.9% in the first quarter of 2004 to EUR 696.0 million. This decline is due to the new tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic structure introduced in late December 2003 to face heightened competition. In addition, revenue erosion erosion (ĭrō`zhən), general term for the processes by which the surface of the earth is constantly being worn away. The principal agents are gravity, running water, near-shore waves, ice (mostly glaciers), and wind. was exacerbated by regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. actions. The Regulator imposed new tariffs for interconnection and leased lines in late December 2003. Revenue affected by this decision amounted to approximately EUR 300 million in 2003 (EUR 220 million for leased lines and EUR 80 million for interconnection). The prices imposed by the regulator are significantly lower than those proposed by OTE to the regulator. OTE's proposed tariffs, which were based on detailed cost-based analysis, were already significantly below European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. averages for similar services, despite Greece's higher line installation and maintenance costs as a result of the country's natural environment. The new prices imposed by the regulator are clearly out of line with OTE's costs for providing these services. OTE is contesting vigorously vig·or·ous adj. 1. Strong, energetic, and active in mind or body; robust. See Synonyms at healthy. 2. Marked by or done with force and energy. See Synonyms at active. this decision before all relevant authorities in Greece and abroad. OTE has filed a court injunction injunction, in law, order of a court directing a party to perform a certain act or to refrain from an act or acts. The injunction, which developed as the main remedy in equity, is used especially where money damages would not satisfy a plaintiff's claim, or to before the Council of State (Greece's highest administrative courts), and intends to defend its case before European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community authorities. The slight increase in Basic Monthly Rentals reflects the introduction of new tariffs in late 2003, partly offset by a decline in the number of PSTN (Public Switched Telephone Network) The worldwide voice telephone network. Once only an analog system, the heart of most telephone networks today is all digital. In the U.S. lines, primarily resulting from customer switches to ISDN ISDN in full Integrated Services Digital Network Digital telecommunications network that operates over standard copper telephone wires or other media. . The drop in revenues from fixed-to-fixed and fixed-to-mobile calls reflects lower volume, as new competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. make inroads inroads Noun, pl make inroads into to start affecting or reducing: my gambling has made great inroads into my savings inroads npl to make inroads into [+ in the Greek telephony market, as well as lower pricing. OTE pursued an aggressive marketing and advertising strategy in the first quarter to support the visibility of the new tariffs introduced late 2003 and the take-up of its pricing packages targeting residential and business customers. Growth of Greece's first ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line service, launched in the fall of 2003, was slowed down by temporary product availability issues. The launch of a self-install product, initially planned for the second quarter, has been postponed until the third quarter. OTE has about 20,000 current users of its ADSL service, and now expects to pass the 50,000 mark by the end of the year. Fixed-line payroll and benefits rose by 6.4% in the first quarter of 2004 to EUR 209.2 million. An analysis of the OTE segment Other Operating Expenses follows:
----------------------------------------------------------------------
%
EUR million Q1 04 Q1 03 Change
----------------------------------------------------------------------
Cost of equipment 19.0 24.0 -20.8%
----------------------------------------------------------------------
Repairs, maintenance, Cost of telecom materials 21.3 17.7 20.3%
----------------------------------------------------------------------
Provision for doubtful accounts 20.5 16.8 22.0%
----------------------------------------------------------------------
Advertising 2.9 1.4 107.1%
----------------------------------------------------------------------
Taxes other than income taxes 3.6 3.6 0.0%
----------------------------------------------------------------------
Other 85.9 80.1 7.2%
----------------------------------------------------------------------
-Third party fees 16.1 20.3 -20.7%
----------------------------------------------------------------------
-Travel costs 0.9 1.5 -40.0%
----------------------------------------------------------------------
-Audiotex 19.2 12.8 50.0%
----------------------------------------------------------------------
-Telecards 1.6 3.2 -50.0%
----------------------------------------------------------------------
-Other 48.1 42.3 13.7%
----------------------------------------------------------------------
TOTAL 153.2 143.6 6.7%
----------------------------------------------------------------------
In the first quarter of 2004, Other Operating Expenses showed an increase of 6.7% in comparison to the corresponding quarter of 2003. This was mainly due to additional advertising costs supporting a number of new products and services, increased provision for doubtful accounts and maintenance and repair costs, as well as higher commissions to Audiotex A voice response application that allows users to enter and retrieve information over the telephone. See IVR. providers. Initiatives aimed at reducing operating expenses in Greek fixed-line activities are starting to yield results, notably in the areas of third party fees and travel expenses. However stringent action needs to be taken to bring OTE's operating cost base in line with its revenue performance. In the three months ended March 31, 2004, Net Working Capital for the Domestic Fixed-line activities (including bad debt, excluding intra-group transactions and cash) stayed largely stable as a percentage of revenue compared to the same period of 2003, at around 29% (Greek GAAP). This is mainly due to 24% increase in inventories, attributed to the roll-out of the Olympic O·lym·pic adj. Of or relating to the Olympic Games. Olympic Adjective of the Olympic Games Adj. 1. Olympic - of or relating to the Olympic Games; "Olympic winners" 2. projects; 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. , Days Payables Payables Related: Accounts payable Outstanding increased substantially from 118 to 130, following OTE's extension of its standard payment terms to suppliers, and Days Sales Outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). have stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. at 118 as the billing process is gradually grad·u·al adj. Advancing or progressing by regular or continuous degrees: gradual erosion; a gradual slope. n. Roman Catholic Church 1. becoming more efficient. Reduction of Net Working Capital is expected throughout 2004 as the one-off (1) One at a time. CD-ROM recorders (CD-R drives) are commonly called one-off machines because they write one CD-ROM at a time. (2) Only once. Software that is written to solve a specific problem only one time is sometimes called a one-off. and seasonal effects subside sub·side intr.v. sub·sid·ed, sub·sid·ing, sub·sides 1. To sink to a lower or normal level. 2. To sink or settle down, as into a sofa. 3. To sink to the bottom, as a sediment. 4. and the improved credit and collections management begin to have an effect on the receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed management. ---------------------------------------------------------------------- EUR Million Q1 04 Q1 03 ---------------------------------------------------------------------- Net Accounts Receivable 1,066.0 1,196.0 ---------------------------------------------------------------------- Net Working Capital 819.0 896.0 ---------------------------------------------------------------------- NWC/Sales (%) 29.0 29.0 ---------------------------------------------------------------------- DSO (incl. VAT) 118 118 ---------------------------------------------------------------------- DPO (incl. VAT) 130 118 ---------------------------------------------------------------------- 4.2. COSMOTE
FIRST QUARTER ENDED MARCH 31, 2004 AND 2003
IN ACCORDANCE WITH U.S. GAAP (UNAUDITED)
----------------------------------------------------------------------
EUR millions Q1 04 Q1 03 % Change
----------------------------------------------------------------------
Operating Revenues 358.5 297.0 20.7%
----------------------------------------------------------------------
Monthly service fees 55.5 39.5 40.5%
----------------------------------------------------------------------
Airtime revenues 151.1 125.1 20.8%
----------------------------------------------------------------------
Interconnection Revenues 102.7 87.6 17.2%
----------------------------------------------------------------------
Roaming revenues 4.0 2.6 53.8%
----------------------------------------------------------------------
SMS revenues 34.7 35.7 -2.8%
----------------------------------------------------------------------
Sales of handsets and accessories 6.4 6.5 -1.5%
----------------------------------------------------------------------
Other operating revenues 4.1 0.0 N/A
----------------------------------------------------------------------
Operating Income before depreciation and
amortization 152.7 127.0 20.2%
----------------------------------------------------------------------
Operating Income before depreciation and
amortization as % of Operating Revenues 42.6% 42.8% -0.2 pp
----------------------------------------------------------------------
Operating Profit (EBIT) 109.7 88.7 23.7%
----------------------------------------------------------------------
Net Income 68.3 53.7 27.2%
----------------------------------------------------------------------
Net Income Margin 19.1% 18.1% +1.0 pp
----------------------------------------------------------------------
Depreciation & Amortization 43.0 38.4 12.0%
----------------------------------------------------------------------
----------------------------------------------------------------------
Customers (Greece) 4,023,475 3,641,463 10.5%
----------------------------------------------------------------------
Contract 1,600,135 1,565,290 2.2%
----------------------------------------------------------------------
Pre-Paid 2,423,340 2,076,173 16.7%
----------------------------------------------------------------------
Customers (Albania) 615,934 537,783 14.5%
----------------------------------------------------------------------
Contract 14,510 12,851 12.9%
----------------------------------------------------------------------
Pre-Paid 601,424 524,932 14.6%
----------------------------------------------------------------------
Employees n/a n/a
----------------------------------------------------------------------
ARPU blended (Euro) 29.2 27.5 6.2%
----------------------------------------------------------------------
AMOU blended 121.0 96.0 26.0%
----------------------------------------------------------------------
Cosmote operates in four countries of Southeastern south·east n. 1. Abbr. SE The direction or point on the mariner's compass halfway between due south and due east, or 135° east of due north. 2. An area or region lying in the southeast. 3. Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). : through
direct ownership in Greece (Cosmote) and Albania Albania (ălbā`nyə), Albanian Shqipëria or Shqipnija, officially Republic of Albania, republic (2005 est. pop. 3,563,000), 11,101 sq mi (28,752 sq km), SE Europe. (AMC (Advanced Mezzanine Card) See AdvancedTCA. ) and since January January: see month. 2003, through management of companies owned by OTE in Bulgaria Bulgaria (bŭlgâr`ēə), Bulgarian Balgarija, officially Republic of Bulgaria, republic (2005 est. pop. 7,450,000), 42,823 sq mi (110,912 sq km), SE Europe, on the E Balkan Peninsula. (GLOBUL)
and F.Y.R. of Macedonia Macedonia, country, EuropeMacedonia (măs'ədō`nēə), Macedonian Makedonija, officially Republic of Macedonia, republic (2005 est. pop. 2,045,000), 9,930 sq mi (25,720 sq km), SE Europe. (CosmoFon). Cosmote group consolidated results incorporate the Greek and Albanian companies This is an initial and incomplete list of Albanian companies. This list is presently a business sector list. Banking Central Bank
Commercial Banks
Cosmote group operating revenues for the first quarter of 2004 increased by 20.7% to reach EUR 358.5 million. (This figure includes approximately EUR 3.6 million of fees related to the management of Globul and CosmoFon operations). The overall revenue increase reflects a 20.8% increase in airtime air·time n. 1. The time during which a radio or television station is broadcasting. Also called airspace. 2. The time at which a radio or television program is broadcast. revenues, a 40.5% increase in monthly service fees revenues and a 17.2% increase in interconnection revenues. In total, revenues from telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. increased by 19.8%, representing approximately 97% of total revenues. The key driver behind the healthy revenue growth was the considerable increase of traffic volumes in Cosmote's domestic operations (Greece), which during the quarter increased by approximately 42% compared to last year. The significant tariff cuts (on average 25%) effected in late 2002 and early 2003, with the introduction of the bundled bun·dle n. 1. A group of objects held together, as by tying or wrapping. 2. Something wrapped or tied up for carrying; a package. 3. Biology A cluster or strand of closely bound muscle or nerve fibers. packages, were offset by significant traffic increase, solid proof of ongoing positive usage elasticity. Data revenues, including SMS (1) (Storage Management System) Software used to routinely back up and archive files. See HSM. (2) (Systems Management Server) Systems management software from Microsoft that runs on Windows NT Server. , MMS (Multimedia Messaging Service) An enhanced transmission service that enables graphics, video clips and sound files to be transmitted via cellphones. Developed as part of the 3GPP project, MMS phones are generally backward compatible with SMS and EMS. , and other "soft data" revenues from Value Added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. Services make up approximately 12.5% of total 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. revenues and 12.8% of domestic operations revenue. Cosmote has recorded over 350,000 MMS users, who currently send on average around 26,000 MMS per day. 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. revenues for the first quarter of 2004 grew by 50%, accounting for 1.1% of total consolidated revenues, from 0.9% a year ago. During the quarter, Cosmote signed fourteen additional roaming agreements. These now amount to 321 in 155 countries, seven additional countries compared to 2003 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. . Consolidated profitability was sustained at high levels, with Operating income before depreciation and amortization reaching EUR 152.7 million and a margin of 42.6%. The 0.2 point decrease in Cosmote group Operating income before depreciation and amortization as a percentage of Operating Revenues margin (0.1 pp) compared to last year, is attributed to the dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. of AMC's margin by 1.4 pp (57.6% from 59.0% the first quarter of 2003, due to increased interconnection charges in Albania). In Greece, Operating income before depreciation and amortization reached EUR 137.4 million, up 22.1% over last year, growing faster than revenue. As a result the margin of Operating income before depreciation and amortization to Operating Revenues in Greece improved to 41.4% from 41.0% compared to last year. Cosmote group Net Income for the first quarter of 2004 reached EUR 68.3 million. Free cash flow for the first quarter of year 2004 reached EUR 108.6 million, reflecting Cosmote's enhanced cash flow generating capacity and efficient working capital management. Blended blend v. blend·ed or blent , blend·ing, blends v.tr. 1. To combine or mix so that the constituent parts are indistinguishable from one another: AMOU for the first quarter of 2004 increased by 26% compared to the first quarter of 2003; reaching 121 minutes, driven by strong growth in contract AMOU, which was 65 minutes higher compared to last year. Blended ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. for the first quarter of 2004 at EUR 29.2 was 6.2% higher compared to the year before, positively affected by the increase in contract ARPU, which at the end of the first quarter of 2004 reached the highest level ever recorded, at EUR 51.7. During the first quarter of 2004 Cosmote (Greek operations) added 106,465 net new customers of which 102,182 were prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. customers and
4,283 were contract customers. Contract customers at the end of the
quarter totaled 1,600,135 (39.8% of total customer base) while prepaid
customers during the same period reached 2,423,340 (60.2% of total
customer base).Cosmote's annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. churn rate (1) The percentage of customers who cancel their online, cellphone or other subscription service during a certain time period. (2) The percentage of employees who leave the company during a certain time period. See churning. , for the first quarter of 2004 stood at 18.7%, slightly lower compared to the year before. Most of the churn churn: see butter. is due to internal contract churn. During the first quarter of 2004, AMC added 23,130 net new customers, reaching a total of 615,934 customers. 4.3. ROMTELECOM OTE, through its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. OTE International Investments Ltd, holds a 54.01% interest in RomTelecom S.A., the incumbent Refers to an entity that is currently in power. For example, in politics, the "incumbent senator" is the person who holds that office today. An "incumbent company" is an organization that has been providing goods and services for some time. See ILEC. telecommunications operator in Romania Romania (rōmān`ēə, –yə) or Rumania (r  –), republic (v), 91,699 sq mi (237,500 sq km), SE Europe. . RomTelecom's key
financial figures are stated below:
ROMTELECOM CONSOLIDATED STATEMENTS OF OPERATIONS
FIRST QUARTER ENDED MARCH 31, 2004 AND 2003
IN ACCORDANCE WITH U.S. GAAP (UNAUDITED)
----------------------------------------------------------------------
EUR Millions 1Q 04 1Q 03 % Change
----------------------------------------------------------------------
Operating Revenues 201.2 198.4 1.4%
----------------------------------------------------------------------
Operating income before depreciation and
amortization 58.3 56.5 3.2%
----------------------------------------------------------------------
Operating income before depreciation and
amortization as % of Operating revenues 29.0% 28.5% 0.5 pp
----------------------------------------------------------------------
Operating Income 21.7 14.9 45.6%
----------------------------------------------------------------------
Net Income/(Loss) 10.1 9.3 8.6%
----------------------------------------------------------------------
Net Income/(Loss) Margin 5.0% 4.7% 0.3 pp
----------------------------------------------------------------------
Increase/(Decrease) in Gross PP&E 9.2 17.5 -47.4%
----------------------------------------------------------------------
----------------------------------------------------------------------
Fixed Telephony, Lines 4,328,174 4,220,617 2.5%
----------------------------------------------------------------------
Mobile Telephony, Contract customers 32,146 40,544 -20.7%
----------------------------------------------------------------------
Mobile Telephony, Prepaid customers 53,023 51,683 2.6%
----------------------------------------------------------------------
Mobile Telephony, Total customers 85,169 92,227 -7.7%
----------------------------------------------------------------------
31.03.04 31.12.03
----------------------------------------------------------------------
Cash and cash equivalents 82.6 90.6 -8.8%
----------------------------------------------------------------------
Short-term borrowings 30.2 40.7 -25.8%
----------------------------------------------------------------------
Long-term debt 213.6 223.7 -4.5%
----------------------------------------------------------------------
Net Financial Debt 161.2 173.8 -7.2%
----------------------------------------------------------------------
In the first quarter of 2004, RomTelecom posted revenues of EUR 201.2 million, up 1.4% from revenues of EUR 198.4 million in the first quarter of 2003. This revenue increase is due to the growth of rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. and traffic revenues, and to a 46% raise in interconnection traffic, more than offsetting a negative currency impact. -- Interconnection Revenues increased significantly compared to the same period in 2003 (+36%). During Q1 2004, RomTelecom regained a significant share of inbound in·bound 1 adj. Bound inward; incoming: inbound commuter traffic. Adj. 1. inbound and outbound out·bound adj. Outward bound; headed away: outbound trains. Adj. 1. outbound - that is going out or leaving; "the departing train"; "an outward journey"; "outward-bound ships" international traffic of Mobile Operators. In addition, inbound traffic Traffic originating in an area outside the continental United States destined for or moving in the general direction of the continental United States. to RomTelecom's own network increased significantly as a result of a sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz a·ble·ness n. drop of the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of VOIP (Voice Over IP) A digital telephone service that uses the public Internet as well as private backbones instead of the traditional telephone network. Many companies, including Vonage, 8x8 and AT&T (CallVantage), typically offer calling within the country for a international traffic. -- Though tariffs have been denominated in euros since October October: see month. 2, 2003, revenues were affected by the devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of the Romanian currency (estimated EUR 17.7 million of revenues lost), as tariffs in euro terms continued to decrease from March 31, 2003 until October 2, 2003. -- Revenues from 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 , Fixed-to-Mobile and Long Distance Calls decreased in comparison to the first quarter of 2003 because of mobile substitution Substitution Arsinoë put her own son in place of Orestes; her son was killed and Orestes was saved. [Gk. Myth.: Zimmerman, 32] Barabbas robber freed in Christ’s stead. [N.T.: Matthew 27:15–18; Swed. Lit. and competition from alternative carriers. RomTelecom recorded a slight increase in the margin of Operating income before depreciation and amortization to total revenues, amounting to 29% in the first quarter of 2004, as compared to 28.5% in 2003, as higher revenues, covered the slight growth in operating expenses (+0.6%). The increase in operating expenses is due to a EUR 19.2 million one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. provision for personnel redundancy payments redundancy payment n → indemnización f por desempleo redundancy payment n (Brit) → indemnité f de licenciement . Most other operating expenses were down. Payroll and benefits decreased due to a 23% reduction in headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. , while the drop in interconnection costs reflects tariff reduction, despite of a 6% increase in outgoing traffic. Net income margin for the first three months of 2004 increased to 5%, from 4.7% in the respective period of 2003. Recently, RomTelecom has received regulatory approval for a new round of tariff rebalancing Rebalancing The process of realigning the weightings of one's portfolio of assets. Notes: For example, if your portfolio's proportion of stock has grown too large for your intended assets weightings and risk tolerance, you might rebalance by selling some stock and putting , effective from June 1, 2004. ANRC ANRC Autoritatea Nationala de Reglementare in Comunicatii (Romania) ANRC American National Red Cross ANRC Alaska Native Regional Corporation ANRC Arkansas Natural Resources Commission (Little Rock, AR) approved an average increase in monthly rental of 8% for residential users and 22% for business users, as well as local and Internet call tariff increases. International and Long Distance Call charges will be reduced between 10% and 21% and Fixed-to-Mobile call charges by 3%. RomTelecom's management pursues the implementation of its "Transformation Plan": -- Efficiency improved from 181 Lines per Employee at the end of the fourth quarter of 2003, to 193 Lines per Employee at the end of the first quarter of 2004, an increase of 6.6%. -- The implementation of certain projects was initiated: -- A new central Billing System replacing 20 existing systems -- The Oracle Financial e-Business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. System -- Directory Assistance Call Center decreasing the cost per call by 25% COSMOROM CosmoRom's operating revenues for the three months ended March 31, 2004 amounted to EUR 1.6 million, while net loss amounted to EUR 7.4 million. As previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). CosmoRom is experiencing financial difficulties and has overdue OVERDUE. A bill, note, bond or other contract, for the payment of money at a particular day, when not paid upon the day, is overdue. 2. The indorsement of a note or bill overdue, is equivalent to drawing a new bill payable at sight. 2 Conn. 419; 18 Pick. payments to its principal equipment supplier. In addition, CosmoRom's shareholder, RomTelecom, has recently appointed an investment bank to review its strategic options regarding CosmoRom. It is expected that the bank will provide its report by June 2004. The contents of this report and RomTelecom's decisions following its receipt may have an impact on OTE's final 2003 consolidated U.S. GAAP financial statements scheduled to be published by June 30, 2004. 4.4. OTENET OTEnet is a major internet service provider of Greece. OTEnet S.A. is an S.A. (corporation) providing Internet products and services. The major shareholder of OTEnet is OTE (94.58%). OTEnet is an 80.2%-owned OTE subsidiary offering Internet access See how to access the Internet. , IP telecom solutions and IT application development and hosting services using Internet technologies. OTEnet's operating revenues for the three months ended March 31, 2004, increased by 60.6% to EUR 22.8 million while quarterly Operating income before depreciation and amortization reached EUR 2.7 million for a margin of 11.8%. OTEnet S.A., boosted its customer base significantly. On March 31, 2004, OTEnet had over 241,100 active residential customers (including all dial up, OnDSL HOME and prepaid card customers). In addition, on March, 31, 2004, OTEnet had over 7,200 active business customers (including all Leased Line, OnDSL OFFICE, VPN (Virtual Private Network) A private network that is configured within a public network (a carrier's network or the Internet) in order to take advantage of the economies of scale and management facilities of large networks. and Data Center customers). OTEnet continues to introduce and actively promote a series of new products and value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. , while implementing efficient cost and investment control. The company's goals for 2004 are to promote the expansion of Internet penetration The successful unauthorized breach of a security perimeter. See penetration test. in Greece and to evolve Evolve may refer to several terms:
adj. Having several levels: a multilevel parking garage. Adj. 1. multilevel - of a building having more than one level IP Telecom Solutions and Internet Service Applications Provider. In addition, OTEnet's strategy is to expand its offering to cover the full Internet value chain and to strengthen its brand name focusing on the two main market segments (corporate-consumer). Voice@net, the OTEnet's subsidiary operating in the corporate VoIP market, achieved a significant increase of 242% in revenues for the three months ended 31, March 2004, in relation with the one of 2003 and reached EUR 3.4 million, attributed to the successful broadening broad·en tr. & intr.v. broad·ened, broad·en·ing, broad·ens To make or become broad or broader. broad of its customer base in the context of a highly competitive market.
OTENET
CONSOLIDATED STATEMENTS OF OPERATIONS
FIRST QUARTER ENDED MARCH 31, 2004 AND 2003
IN ACCORDANCE WITH U.S. GAAP (UNAUDITED)
----------------------------------------------------------------------
EUR Millions 1Q 04 1Q 03 % Change
----------------------------------------------------------------------
Operating Revenues 22.8 14.2 60.6%
----------------------------------------------------------------------
Operating Profit 1.4 1.4 0.0%
----------------------------------------------------------------------
Operating income before depreciation and
amortization 2.7 2.6 3.8%
----------------------------------------------------------------------
Operating income before depreciation and
amortization as % of Operating revenues 11.8% 18.3% -6.5pp
----------------------------------------------------------------------
Depreciation & Amortization 1.3 1.2 8.3%
----------------------------------------------------------------------
4.5. OTHER INTERNATIONAL INVESTMENTS TELECOM SERBIA Serbia (sûr`bēə), Serbian Srbija (sŭr`bēä), officially Republic of Serbia, republic (1995 est. pop. For the first quarter of 2004, total operating revenues of Telecom Serbia amounted to EUR 135.1 million, up 10.1% from the first quarter of 2003. Net income amounted to EUR 31.2 million, 138.2% higher than in the first quarter of 2003. At March 31, 2004, Telecom Serbia had approximately 2.4 million fixed-line customers, up 3.9% from the first quarter of 2003, and nearly 1.9 million mobile customers, up 29.1% from last year's quarter. The number of pre-paid customers increased by 26.9%, accounting for over 96% of the total, while the number of contract customers increased by 166.7%. During 2003 Telecom Italia Telecom Italia is formerly a partially state-owned Italian telco. It was once known as SIP, and it has the largest user base in Italy. Telecom Italia also owns shares in Telecom Argentina and Telecom Personal, fixed and cellular networks in Argentina. International sold its 29% interest in Telecom Serbia back to the Serbian Ser·bi·an n. 1. A native or inhabitant of Serbia; a Serb. 2. Serbo-Croatian as spoken in Serbia and adjacent regions, written in a Cyrillic alphabet. adj. Government. As a result OTE lost its significant influence in Telecom Serbia, and therefore this investment is accounted for at cost. ARMENTEL ArmenTel's operating revenues for the first quarter of 2004 amounted to EUR 17.6 million, while net income amounted to EUR 2.4 million. Operating income before depreciation and amortization reached EUR 9.0 million for a margin of 51.1%, while Net income reached EUR 2.4 million for a margin of 13.6%. OTE will not fund any further capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. in ArmenTel and a program to reduce expenses has been developed. Negotiations towards an exit from the Armenian Armenian Armenian Hay plural Hayk or Hayq Member of an Indo-European people first recognized in the early 7th century BC when they moved into areas of Transcaucasia, Anatolia, and the Middle East that came to be known as Armenia. market are proceeding. GLOBUL Cosmo COSMO Consolidated Supercomputer Management Office (NASA) COSMO Coalition of Senior Membership Organizations COSMO Coalition of Self-Managed Operators COSMO Common Specifications for Mobile Bulgaria Mobile EAD EAD Ensino A Distancia (Brazil) EAD Encoded Archival Description (DTD for SGML) EAD Employment Authorization Document (US INS) EAD Exposure At Default is a 100% owned OTE subsidiary, managed by Cosmote, operating a 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. 900/1800 mobile telephony license in Bulgaria. Operating Revenues of Cosmo Bulgaria Mobile EAD, which operates under the Globul brand, amounted to EUR 32.9 million for the first quarter of 2004, compared to EUR 16.6 million for the comparable quarter of 2003, posting an increase of 98.2%. The overall revenue increase reflects a 194% increase in monthly service revenues (including airtime revenue incorporate in the bundle To sell hardware and software as a combined product or to combine several software packages for sale as a single unit. Contrast with unbundle. See bundled software and bundling. packages), 75% in airtime revenue, 306% increase in SMS revenues and 354% increase in roaming revenues. The key drivers behind the healthy revenue growth were: -- A customer base which grew by 104% y-o-y, reaching a total of 1,148,484 customers. Prepaid customers reached 734,000, while contract customers reached 415,000, providing a prepaid/contract mix of 64%/36%. This increase was driven both by improved market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" and market share gains. -- Stable pre-paid usage. -- Further increases in contract usage, driven by an increase in corporate customers and enhanced coverage. -- Territorial coverage increased to 80% vs. 49% at the end of Q1 2003. -- Population coverage increased to 97% vs. 80% at the end of Q1 2003. Roaming revenues posted an impressive growth as the company activated activated a state of being more than usually active. In biological systems this is usually brought about by chemical or electrical means. Commonly said of pharmaceutical and chemical products. more roaming agreements. The number of active roaming agreements at year-end reached 222 operators in 112 countries. Operating income before depreciation and amortization in the first quarter of 2004 was EUR 8 million, posting a 268% growth compared to the respective quarter of 2003. COSMOFON MOBILE TELECOMMUNICATIONS AD SKOPJE Skopje (skôp`yə) or Skoplje (skôp`əlyə), city (1994 pop. 444,760), capital of Macedonia, on the Vardar River. (MTS (1) See Microsoft Transaction Server. (2) (Modular TV System) The stereo channel added to the NTSC standard, which includes the SAP audio channel for special use. 1. MTS - Message Transport System. 2. ) Cosmofon AD, the new corporate name of MTS, is a wholly owned subsidiary of OTE managed by Cosmote, operating the second mobile telephony license in the Former Yugoslav Republic of Macedonia (FYROM FYROM Former Yugoslavian Republic Of Macedonia ). The company launched commercially under the brand name Cosmofon in June 2003. Since then, the company has acquired more than 110,000 customers, while Operating revenues for the first quarter of 2004 reached EUR 4.3 million. 5. OUTLOOK On the basis of its first quarter performance, OTE expects a significant decline in fixed-line revenues in Greece, particularly if the Regulator's tariff decisions are confirmed. Sharp revenue growth at Cosmote and in other mobile operations and stable revenues at RomTelecom should partly offset the revenue decline in OTE's fixed-line telephony. OTE's new management is working on the development of a stringent turnaround plan and is already taking action to reduce costs, streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. organizational structures  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. and preserve cash. The turnaround plan will be presented to the financial community in the fall, after the Olympic Games Olympic games, premier athletic meeting of ancient Greece, and, in modern times, series of international sports contests. The Olympics of Ancient Greece Although records cannot verify games earlier than 776 B.C. , and a detailed outlook for the current and future years will be presented at that time. About OTE OTE is a provider of public, fixed switch domestic and international telephony services in Greece. With local, long distance and international communications services in addition to mobile telephony, internet services, and high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. , OTE provides consumers and businesses the ability to communicate globally through its extensive network infrastructure. In addition, OTE has a number of International investments in the South East European region and addresses a potential customer base of 60 million people. Listed on the Athens Stock Exchange Athens Stock Exchange Greece's only major securities market. Greek language only. Athens Stock Exchange (ASE) Greece's principal stock exchange. , the company trades under the ticker ticker An automated quotation system on which security transactions are reported after they occur on an exchange floor. Even though the newer systems are electronic and no longer actually tick, the name of the old mechanical device has stuck. HTO as well as on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the ticker OTE. In the U.S., OTE's American Depository Receipts American Depository Receipt n. called in the banking trade an ADR, it is a receipt issued by American banks to Americans as a substitute for actual ownership of shares of foreign stocks. (ADR's) represents 1/2 ordinary share. Additional Information is also available on http://www.ote.gr. Forward-looking statement 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. Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the Company's future financial results are discussed more fully in the Company's filings with the U.S. Securities and Exchange Commission (the "SEC"), including the Company's Annual Report on Form 20-F for 2002 filed with the SEC on June 30, 2003. OTE assumes no obligation to update information in this release.
*NOTE: In line with SEC recommendations on the use of non-GAAP
financial measures, OTE has decided to replace the caption
"EBITDA" used in prior filings by "Operating income before
depreciation and amortization". This item is the sum of
"Operating income" and "Depreciation and amortization".
Similarly, the previously used "EBITDA margin" caption is
henceforth replaced by "Operating income before depreciation
and amortization as a percentage (%) of Operating Revenues".
Exhibits to follow:
-------------------
I. Condensed Consolidated Balance Sheets as of March 31, 2004 and
December 31, 2003 (Under US GAAP)
II. Condensed Consolidated Statements of Operations for the three
months ended March 31, 2004 and 2003 (Under US GAAP)
III. Condensed Consolidated Statement of Cash Flows for the three
months ended March 31, 2004
IV. Operating Revenues for the three months ended March 31, 2004 and
2003 (Under US GAAP)
V. Segment Reporting based on the Company's legal structure
VI. International Assets
VII. Operational Highlights
EXHIBIT I - BALANCE SHEETS
HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (OTE) AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
Prepared under U.S. GAAP
as of March 31, 2004 and December 31, 2003
(EUR million)
Mar 2004 Dec 2003
--------- ---------
Assets Unaudited Unaudited
------
Current Assets
Cash and cash equivalents 680.3 601.3
Accounts receivable 1,325.4 1,276.5
Materials and supplies 148.8 150.2
Deferred income taxes 12.9 8.0
Other current assets 235.7 255.0
--------- ---------
2,403.1 2,291.0
--------- ---------
Other assets
Investments 228.8 228.8
Prepayment to EDEKT-OTE 236.9 245.1
Deferred income taxes 108.6 117.9
Other long-term receivables 130.5 124.0
--------- ---------
704.8 715.8
--------- ---------
Telecommunication property,
Plant and equipment
Net of Accumulated depreciation 6,895.5 6,965.1
--------- ---------
Telecommunication licenses, net of amortization 400.1 402.5
--------- ---------
Goodwill resulting from consolidated subsidiaries,
net of amortization 70.7 70.7
--------- ---------
10,474.2 10,445.1
========= =========
Mar 2004 Dec 2003
--------- ---------
Liabilities and Shareholders' Equity Unaudited Unaudited
------------------------------------
Current Liabilities
Short-term borrowings 22.8 51.6
Current maturities of long-term debt 71.4 74.8
Accounts payable 823.8 924.1
Accrued and other liabilities 610.2 582.1
Income taxes payable 209.1 155.7
Dividends payable 8.0 8.6
--------- ---------
1,745.3 1,796.9
--------- ---------
Long-Term Liabilities
Long-term debt, net of current maturities 3,152.0 3,153.9
Reserve for staff retirement indemnities 272.4 269.9
Reserve for Youth Account 363.0 360.5
Other long-term liabilities 238.5 250.8
--------- ---------
4,025.9 4,035.1
--------- ---------
Minority interests 1,058.5 1,020.2
--------- ---------
Shareholders' Equity
Share capital 1,204.7 1,204.7
Paid-in surplus 506.9 506.9
Treasury stock (276.6) (276.6)
Legal reserve 256.7 256.7
Retained earnings 2,026.5 1,977.4
Unaccrued compensation 0.0 (0.1)
Accumulated other comprehensive income (73.7) (76.1)
3,644.5 3,592.9
--------- ---------
10,474.2 10,445.1
========= =========
Movement in Shareholders' equity
----------------------------------------------------------------------
2004
====
---------
Unaudited
Shareholders' equity, January 1 3,592.9
---------
Net Income for the period 49.1
Accumulated other comprehensive income 2.0
Unaccrued compensation 0.1
Unrealized gain from available for sale securities 0.4
---------
51.6
---------
Shareholders' equity, March 31 3,644.5
=========
EXHIBIT II - STATEMENTS OF OPERATIONS
HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (OTE) AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Prepared under U.S. GAAP
for the three months ended March 31, 2004 and 2003
(EUR million)
Q1 04 Q1 03 %
Unaudited Unaudited Change
Operating Revenues:
Domestic Telephony 572.4 538.5 6.3%
International Telephony 92.8 84.0 10.5%
Mobile telephony services 344.5 260.6 32.2%
Other 219.1 217.1 0.9%
------------------
Total Operating Revenues 1,228.8 1,100.2 11.7%
==================
Operating Expenses:
Payroll and employee benefits (321.1) (245.7) 30.7%
Voluntary retirement costs (27.7) (9.2) 201.1%
Payments to international operators (36.1) (45.1) -20.0%
Payments to mobile telephony operators (151.0) (133.4) 13.2%
Depreciation and amortization (249.9) (201.3) 24.1%
Other operating expenses (278.9) (228.8) 21.9%
------------------
Total Operating Expenses (1,064.7) (863.5) 23.3%
==================
Operating Income 164.1 236.7 -30.7%
Other income/(expense), net:
Interest income 11.3 10.7 5.6%
Interest expense (36.1) (32.1) 12.5%
FX gain 8.9 18.4 -51.6%
FX loss (9.4) (12.1) -22.3%
Investment writedown/(losses)/gains on
sale 4.0 3.2 25.0%
Other, net 2.8 (3.3) N/A
------------------
Total Other income/(expense), net (18.5) (15.2) 21.7%
==================
Income before provision for income taxes
and minority interests 145.6 221.5 -34.3%
==================
Provision for income taxes (62.4) (84.0) -25.7%
------------------
Income before minority interests 83.2 137.5 -39.5%
Minority Interests (34.1) (24.4) 39.8%
------------------
Net Income 49.1 113.1 -56.6%
==================
EXHIBIT III - STATEMENT OF CASH FLOWS
HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (OTE) AND SUBSIDIARIES
Consolidated Statement of Cash Flows
Prepared under U.S. GAAP
for the three months ended March 31, 2004 is as follows:
(EUR million)
Q1 04
Unaudited
Cash Flows from Operating Activities:
Net income 49.1
Adjustments to reconcile to net cash provided
by operating activities:
Depreciation and amortization 249.9
Provision for doubtful accounts 26.0
Provision for staff retirement
indemnities and youth account 20.0
Minority interests 34.1
Working capital movement and
other related movements (87.5)
=========
Net Cash provided by Operating Activities 291.6
---------
Cash Flows from Investing Activities:
Capital expenditures (177.9)
=========
Net Cash used in Investing Activities (177.9)
---------
Cash Flows from Financing Activities:
Net change in short-term and
long-term debt (34.1)
Dividends paid (0.6)
=========
Net Cash provided by Financing Activities (34.7)
---------
Net Increase/(Decrease) in Cash and Cash
Equivalents 79.0
Cash and Cash equivalents at beginning of
period 601.3
---------
Cash and Cash Equivalents at end of period 680.3
=========
EXHIBIT IV - OPERATING REVENUES
HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (OTE) AND SUBSIDIARIES
Consolidated Operating Revenues
Prepared under U.S. GAAP
for the three months ended March 31, 2004 and 2003
(EUR million)
Q1 04 Q1 03 %
Unaudited Unaudited Change
Domestic Telephony:
Basic monthly rentals 216.7 175.8 23.3%
Local and long distance calls
-Fixed to fixed 199.8 202.4 -1.3%
-Fixed to mobile 129.9 142.5 -8.8%
--------- ---------
329.7 344.9 -4.4%
========= =========
Other 26.0 17.8 46.1%
--------- ---------
Total Domestic Telephony 572.4 538.5 6.3%
========= =========
International Telephony:
International traffic 43.9 46.0 -4.6%
Payments from mobile operators 6.4 7.3 -12.3%
--------- ---------
50.3 53.3 -5.6%
========= =========
Payments from International operators 42.5 30.7 38.4%
Total International Telephony 92.8 84.0 10.5%
========= =========
Mobile Telephony Services: 344.5 260.6 32.2%
========= =========
Other Operating Revenues:
Traditional Services:
Telecards 37.7 36.2 4.1%
Directories 13.0 12.3 5.7%
Radio communications 4.7 5.8 -19.0%
Audiotex 29.2 17.1 70.8%
Telex and telegraphy 1.4 0.8 75.0%
--------- ---------
86.0 72.2 19.1%
========= =========
New Business:
Leased lines and data communications 16.6 55.5 -70.1%
ISDN, connection & monthly charges 26.4 21.4 23.4%
Sales of telecommunication equipment 24.6 18.9 30.2%
Internet services 12.6 11.6 8.6%
ATM 6.8 4.6 47.8%
--------- ---------
87.0 112.0 -22.3%
========= =========
Other:
Services rendered 14.6 12.9 13.2%
Interconnection charges 24.5 19.7 24.4%
Miscellaneous 7.0 0.3 2233.3%
--------- ---------
46.1 32.9 40.1%
========= =========
Total Other Operating Revenues 219.1 217.1 0.9%
========= =========
========= =========
Total Operating Revenues 1,228.8 1,100.2 11.7%
========= =========
EXHIBIT V - SEGMENT REPORTING
HELLENIC TELECOMMUNICATIONS ORGANIZATION S.A. (OTE)
AND SUBSIDIARIES
Segment Reporting
Prepared under U.S. GAAP
for the three months ended March 31, 2004
(In millions of Euro)
All
OTE Cosmote RomTelecom Other Total
Operating Revenues:
Domestic Telephony 421.1 144.6 7.0 572.7
International Telephony 54.9 32.4 6.7 94.0
Mobile telephony services 351.8 1.6 38.1 391.5
Other 220.0 6.7 22.6 62.8 312.1
Total Operating Revenues 696.0 358.5 201.2 114.6 1,370.3
----------------------------------------
Intersegment Revenues (54.1) (48.2) (1.1) (38.1) (141.5)
Revenue from External
Customers 641.9 310.3 200.1 76.5 1,228.8
----------------------------------------
Operating Expenses:
Payroll and employee
benefits (209.2) (18.2) (76.8) (17.9) (322.1)
Voluntary retirement costs (27.7) (27.7)
Total (236.9) (18.2) (76.8) (17.9) (349.8)
Payments to international
operators (24.5) (5.2) (5.1) (2.6) (37.4)
Payments to mobile
telephony operators (99.1) (65.7) (21.9) (9.0) (195.7)
Depreciation and
amortization (153.3) (43.0) (31.6) (22.5) (250.4)
Other operating expenses (153.2)(116.7) (39.1) (68.7) (377.7)
----------------------------------------
Total Operating Expenses (667.0)(248.8) (174.5) (120.7) (1,211.0)
----------------------------------------
----------------------------------------
Operating Income 29.0 109.7 26.7 (6.1) 159.3
----------------------------------------
Operating income before
depreciation and
amortization 182.3 152.7 58.3 16.4 409.7
--------------------------------------------------------------------
Operating income before
depreciation and
amortization as % of
Operating revenues 26.2% 42.6% 29.0% 14.3% 29.9%
Adjustments & Eliminations Consolidated
Operating Revenues:
Domestic Telephony
International Telephony
Mobile telephony services
Other
Total Operating Revenues (141.5) 1,228.8
-----------------------------------------
Intersegment Revenues
Revenue from External
Customers 1,228.8
-----------------------------------------
Operating Expenses:
Payroll and employee
benefits 1.0 (321.1)
Voluntary retirement
costs (27.7)
Total 1.0 (348.8)
Payments to international
operators 1.3 (36.1)
Payments to mobile
telephony operators 44.7 (151.0)
Depreciation and
amortization 0.5 (249.9)
Other operating expenses 98.8 (278.9)
-----------------------------------------
Total Operating Expenses 146.3 (1,064.7)
-----------------------------------------
-----------------------------------------
Operating Income 4.8 164.1
-----------------------------------------
Operating income before
depreciation and
amortization 4.3 414.0
--------------------------------------------------------------------
Operating income before
depreciation and
amortization as % of
Operating revenues -3.0% 33.7%
EXHIBIT VI - INTERNATIONAL ASSETS ROMTELECOM OTE has a 54.01% stake in RomTelecom, which has been fully consolidated since March 2003.
ROMTELECOM
CONSOLIDATED and STAND ALONE CONDENSED BALANCE SHEETS
As of March 31, 2004, in accordance with US GAAP
(EUR thousand)
Consolidated Stand-Alone
(Unaudited) (Unaudited)
Property, plant and equipment 1,733,398 1,645,539
Intangible assets 10,506 4,642
Investments and other long-term assets 61,190 61,190
Fixed assets investments 0 161,764
Long-term assets 1,805,094 1,873,135
Inventories 84,506 81,570
Trade and other receivables 128,612 121,242
Cash and cash equivalents 82,577 79,682
Current assets 295,695 282,494
Total assets 2,100,789 2,155,629
Shareholders' Equity 1,370,174 1,560,624
Borrowings 165,410 165,410
Other long-term liabilities 181,132 181,127
Long-term liabilities 346,542 346,537
Trade payables and other current liabilities 305,655 200,228
Borrowings 78,418 48,240
Current liabilities 384,073 248,468
Total liabilities 730,615 595,005
Total liabilities and shareholders' equity 2,100,789 2,155,629
ROMTELECOM
CONSOLIDATED and STAND ALONE INCOME STATEMENT
For the twelve months ended March 31, 2004, in accordance with US GAAP
(EUR thousand)
Consolidated Stand-Alone
(Unaudited) (Unaudited)
Basic monthly rentals 56,015 56,015
Domestic Telephony calls 88,561 88,898
-------------------------
Domestic Telephony 144,576 144,913
International Telephony 32,384 32,384
Mobile Telephony 1,579
Other Revenues 22,556 24,520
-------------------------
Total Operating Revenues 201,095 201,817
Personnel (inc. Voluntary Redundancy) (77,261) (75,912)
Other operating expenses (65,555) (65,183)
Depreciation and Amortization (36,570) (33,630)
Total Operating expenses (179,386) (174,725)
Operating income 21,709 27,092
Financial, net (5,327) (4,599)
Income before provision for income taxes 16,382 (22,493)
Provision for Income taxes (6,262) (6,262)
Net income 10,120 16,231
TELECOM SERBIA OTE has a 20% equity investment in Telecom Serbia that, since the third quarter of 2003 is accounted for at cost. Telecom Serbia's key financial figures are stated below:
TELECOM SERBIA
Statement of Operations
Prepared under U.S. GAAP
for the three months ended March 31, 2004 and 2003
(Unaudited)
----------------------------------------------------------------------
EUR Millions 1Q 04 1Q 03 % Change
----------------------------------------------------------------------
Operating Revenues 135.1 122.7 10.1%
----------------------------------------------------------------------
Operating income before depreciation
and amortization 71.6 58 23.4%
----------------------------------------------------------------------
Operating income before depreciation
and amortization as % of Operating
revenues 53.0% 47.3% 5.7 pp
----------------------------------------------------------------------
Operating Income 34.4 23.1 48.9%
----------------------------------------------------------------------
Net Income/(Loss) 31.2 13.1 138.2%
----------------------------------------------------------------------
Net Income/(Loss) Margin 23.1% 10.7% 12.4 pp
----------------------------------------------------------------------
Increase/(Decrease) in Gross PP&E 30.0 32.6 -8.0%
----------------------------------------------------------------------
----------------------------------------------------------------------
Fixed Telephony, Lines 2,415,926 2,325,210 3.9%
----------------------------------------------------------------------
Mobile Telephony, Contract customers 63,742 23,902 166.7%
----------------------------------------------------------------------
Mobile Telephony, Prepaid customers 1,822,979 1,437,044 26.9%
----------------------------------------------------------------------
Mobile Telephony, Total customers 1,886,721 1,460,946 29.1%
----------------------------------------------------------------------
31.03.04 31.12.03
----------------------------------------------------------------------
Cash and cash equivalents 101.8 95.4 6.7%
----------------------------------------------------------------------
Long-term debt 57.3 59.1 -3.0%
----------------------------------------------------------------------
Net Financial Debt (44.5) (36.3) N/A
----------------------------------------------------------------------
ARMENTEL OTE has a 90% stake in ArmenTel, which is fully consolidated. ArmenTel's key financial figures are stated below:
ARMENTEL
Statement of Operations
Prepared under U.S. GAAP
for the three months ended March 31, 2004 and 2003
(Unaudited)
----------------------------------------------------------------------
EUR Millions 1Q 04 1Q 03 % Change
----------------------------------------------------------------------
Operating Revenues 17.6 16.0 10.0%
----------------------------------------------------------------------
Operating income before depreciation and
amortization 9.0 8.4 7.1%
----------------------------------------------------------------------
Operating income before depreciation and
amortization as % of Operating revenues 51.1% 52.5% -1.4 pp
----------------------------------------------------------------------
Operating Income 3.1 2.8 10.7%
----------------------------------------------------------------------
Net Income/(Loss) 2.4 2.1 14.3%
----------------------------------------------------------------------
Net Income/(Loss) Margin 13.6% 13.1% 0.5 pp
----------------------------------------------------------------------
Increase/(Decrease) in Gross PP&E 5.8 5.1 13.7%
----------------------------------------------------------------------
----------------------------------------------------------------------
Fixed Telephony, Lines 566,974 546,003 3.8%
----------------------------------------------------------------------
Mobile Telephony, Contract customers 41,621 32,791 26.9%
----------------------------------------------------------------------
Mobile Telephony, Prepaid customers 89,616 49,894 79.6%
----------------------------------------------------------------------
Mobile Telephony, Total customers 131,237 82,685 58.7%
----------------------------------------------------------------------
31.03.04 31.12.03
----------------------------------------------------------------------
Cash and cash equivalents 2.6 2.3 13.0%
----------------------------------------------------------------------
Short-term borrowings 12.9 13.1 -1.5%
----------------------------------------------------------------------
Long-term debt 62.4 62.6 -0.3%
----------------------------------------------------------------------
Net Financial Debt 72.7 73.4 -1.0%
----------------------------------------------------------------------
COSMOBULGARIA OTE has a 100% stake in CosmoBulgaria, which is fully consolidated. CosmoBulgaria is a company offering mobile telephony services in Bulgaria under the brand name Globul. Globul's key financial figures are stated below:
COSMOBULGARIA
Statement of Operations
Prepared under U.S. GAAP
for the three months ended March 31, 2004 and 2003
(Unaudited)
----------------------------------------------------------------------
EUR Millions 1Q 04 1Q 03 % Change
----------------------------------------------------------------------
Operating Revenues 32.9 16.6 98.2%
----------------------------------------------------------------------
Operating income before depreciation and
amortization 8.0 2.2 263.6%
----------------------------------------------------------------------
Operating income before depreciation and
amortization as % of Operating revenues 24.3% 13.3% 11.0 pp
----------------------------------------------------------------------
Operating Income/(Loss) (0.8) (4.0) 80.0%
----------------------------------------------------------------------
Net Income/(Loss) (2.3) (5.1) 54.9%
----------------------------------------------------------------------
Net Income/(Loss) Margin -7.0% -30.7% 23.7 pp
----------------------------------------------------------------------
Increase/(Decrease) in Gross PP&E 15.5 13.1 18.3%
----------------------------------------------------------------------
----------------------------------------------------------------------
Mobile Telephony, Contract customers 414,511 252,345 64.3%
----------------------------------------------------------------------
Mobile Telephony, Prepaid customers 733,973 309,664 137.0%
----------------------------------------------------------------------
Mobile Telephony, Total customers 1,148,484 562,009 104.4%
----------------------------------------------------------------------
----------------------------------------------------------------------
31.03.04 31.12.03
----------------------------------------------------------------------
Cash and cash equivalents 14.5 10.1 43.6%
----------------------------------------------------------------------
Long-term debt 185.0 155.0 19.4%
----------------------------------------------------------------------
Net Financial Debt 170.5 144.9 17.7%
----------------------------------------------------------------------
CosmoFon Cosmofon, a company owned by OTE and managed by Cosmote, on June 11, 2003 launched the commercial operations of CosmoFon, in Skopje (FYROM), as the new mobile operator in the country. CosmoFon is fully consolidated. Its key financial figures are below:
COSMOFON
Statement of Operations
Prepared under U.S. GAAP
for the three months ended March 31, 2004
(EUR million)
(Unaudited)
----------------------------------------------------------------------
EUR Millions 1Q 04
----------------------------------------------------------------------
Operating Revenues 4.3
----------------------------------------------------------------------
Operating income (loss) before depreciation and amortization (2.0)
----------------------------------------------------------------------
Operating income (loss) before depreciation and amortization
as % of Operating revenues -46.5%
----------------------------------------------------------------------
Operating Income (4.6)
----------------------------------------------------------------------
Net Income/(Loss) (5.2)
----------------------------------------------------------------------
Net Income/(Loss) Margin -120.9%
----------------------------------------------------------------------
Increase/(Decrease) in Gross PP&E 5.0
----------------------------------------------------------------------
----------------------------------------------------------------------
Mobile Telephony, Contract customers 7,277
----------------------------------------------------------------------
Mobile Telephony, Prepaid customers 104,291
----------------------------------------------------------------------
Mobile Telephony, Total customers 111,568
----------------------------------------------------------------------
31.03.04
----------------------------------------------------------------------
Cash and cash equivalents 9.1
----------------------------------------------------------------------
Long-term debt 22.0
----------------------------------------------------------------------
Net Financial Debt 12.9
----------------------------------------------------------------------
EXHIBIT VII - OPERATIONAL HIGHLIGHTS
----------------------------------------------------------------------
Operational Highlights for the quarters
ended March 31, 2004 and 2003
----------------------------------------------------------------------
OTE Q1 04 Q1 03 % Change
PSTN lines 5,168,994 5,356,849 -3.5%
ISDN, 64kb equiv. lines 1,127,206 938,394 20.1%
COSMOTE (Greece)
Pre-paid sub. 2,423,340 2,076,173 16.7%
Contract sub. 1,600,135 1,565,290 2.2%
OTE net
Dial up clients 241,120 185,000 30.3%
Business customers 7,200 4,000 80.0%
Employees:
-OTE 17,127 17,674 -3.1%
-of which: at other subsidiaries 371 460 -19.3%
-Subsidiaries (Greece) 1,391 852 63.3%
-COSMOTE 1,937 1,688 14.8%
-RomTelecom 22,569 29,483 -23.5%
----------------------------------------------------------------------
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