Primus Telecom Reports Record First Quarter 2003 Profit of A$10.7 Million.
MELBOURNE, Australia--(BUSINESS WIRE)--May 5, 2003
Primus Telecommunications Pty Ltd (Primus Australia), a wholly-owned subsidiary of McLean, Virginia-based PRIMUS Telecommunications Group, Incorporated (NASDAQ:PRTL), today announced financial results for the first quarter ended March 31, 2003.
First quarter net profit from operations was a record A$10.7 million, up 100% from A$5.4 million in the first quarter 2002, and up 24% from A$8.7 million in the fourth quarter 2002.
Greg Wilson, Managing Director and Chief Operating Officer of Primus Australia, said, "We reported impressive first quarter results which reflect the success of our aggressive growth strategy built on a renewed push into the Internet and data markets. We have successfully gained market share in these segments on the back of a strong marketing campaign and the launch of new value-added services which are attracting a significant number of new customers. New customers for our Internet and data products as well as existing customers trading up to our fast-selling high speed DSL access service have contributed to the increase in our top line and profitability."
Net revenue increased by 5.3% in the year to the March 2003 to A$122.3 million from A$116.2 million in the first quarter of 2002.
"We added nearly 50,000 new customers during the March quarter, of which more than 60% signed up for Internet services," Mr. Wilson said. "This facet of our business provides diversification during a time of depressed demand across most of Australia for basic telecommunications services.
"Almost half of our new customers have taken up a bundled service offering, highlighting Primus Australia's continuing ability to deliver an attractively priced product in an extremely competitive market".
During the March quarter, broadband DSL customers grew by 85% to a total of over 8,000 subscribers, making Primus the leading competitor to Telstra in the residential DSL market. This market position has been driven by a combination of competitive pricing, reliable and flexible service offerings, and innovative partnerships with a range of software and hardware partners.
Consumer Internet and data services grew by 9% during the March quarter, while business Internet and data services rose by 4%.
"Primus Australia's first quarter results for 2003 follow its first full year of positive earnings in Australia for the year ended December 31, 2002, with a net profit from operations of A$25.3 million.
"Following the financial results for the year 2002 in which Primus Australia reported its first full year of positive earnings, 2003 is off to an impressive start. We are determined to build on this progress with a range of new products and services offered at great value, seeking new business acquisitions, and with a continued focus on internal business improvements," Mr. Wilson concluded.
Primus Australia generated A$20 million of cash from operating activities during the first quarter of 2003 compared with A$15 million in the fourth quarter of 2002. Cash and investments at March 31, 2003 totaled A$30 million, compared with A$25 million at December 31, 2002. During the March quarter, Primus Australia spent A$3 million on capital expenditures and reduced inter-company debt by A$12 million. In the past year, Primus Australia has remitted A$60 million to its US parent company.
Primus Australia's parent company reported first quarter 2003 net revenue of US$300 million, record gross margin of 36.8%, record income from operations of US$12 million, and net income of US$13 million. It also announced that as part of its continuing program to further strengthen its balance sheet, it had reduced long-term debt by US$39 million during the quarter, plus a further US$25 million during the month of April.
The company was also named a winner in the Best Business Turnaround category for the first-ever American Business Awards.
Primus Telecom is Australia's fourth largest fixed-line telecommunications carrier with approximately 750,000 retail customers including over 400,000 Internet customers. The Company offers a comprehensive range of voice, data, Internet and web hosting products, servicing both residential and business sectors. The Primus network offers nationwide coverage through its own backbone network with facilities in 73 cities across Australia. The network enables the Company to provide nationwide long distance competition and local call Internet access to 97% of the population. Primus operates its own fibre network in the five major capital cities, delivering a range of business direct-connect services including ISDN, ATM and Broadband DSL. Global connectivity is provided through an extensive voice, IP and ATM network operated by the parent company, Virginia-based Primus Telecommunications Group, Incorporated (NASDAQ:PRTL). Primus Australia news and information are available at the Company's Web site at www.primustel.com.au
For PRIMUS Telecommunications Group, Incorporated: Statements in this press release constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are based on current expectations, and are not strictly historical statements. Forward-looking statements include without limitation statements set forth in this document and elsewhere regarding, among other things: the Company's expectations of future revenue and net income, as well as liquidity, earnings before interest, taxes, depreciation and amortization ("EBITDA"), sales, net revenue, gross profit, operating profit, income from operations, earnings per share, cash flow, network development, Internet services development, traffic development, capital expenditures, selling, general and administrative expenses, goodwill impairment charges, service introductions and cash requirements; the Company's financing, refinancing and/or debt repurchase, restructuring or exchange plans or initiatives; liquidity and debt service forecasts; assumptions regarding stable currency exchange rates; management's plans, goals, expectations, guidance, objectives, strategy, and timing for future operations, the revenue impact of the Cable and Wireless customer acquisition, product plans and performance, predictions or expectations of future growth, results or cash flow; and management's assessment of market factors and future financial performance. Factors and risks, including certain of those described in greater detail herein, that could cause actual results or circumstances to differ materially from those set forth or contemplated in forward-looking statements include: changes in business conditions, fluctuations in the exchange rates of currencies, prevailing trade credit terms or revenues arising from, among other reasons, further telecommunications carrier bankruptcies or adverse bankruptcy related developments affecting the Company's large carrier customers; the failure of certain vendors to make adequate concessions concerning the deferral of principal payments and the reduction of interest rates; the possible inability to raise additional capital when needed, or at all; the inability to reduce, exchange or restructure debt significantly, or in amounts sufficient to conduct regular ongoing operations; changes in the telecommunications or Internet industry or the general economy or capital markets; adverse tax rulings from applicable taxing authorities; DSL, Internet and telecommunication competition; changes in financial, capital market and economic conditions; changes in service offerings or business strategies; inability to lease space for data centers at commercially reasonable rates; difficulty in migrating or retaining customers, including former Cable and Wireless customers, associated with our recent business acquisition of this customer base or integrating other assets; difficulty in provisioning VoIP services; changes in the regulatory schemes and regulatory enforcement in the markets in which the Company operates; restrictions on the Company's ability to follow certain strategies or complete certain transactions as a result of its capital structure or debt covenants; the inability to reduce debt significantly; risks associated with the Company's limited DSL, Internet and Web hosting experience and expertise; entry into developing markets; the possible inability to hire and/or retain qualified sales, technical and other personnel, particularly as we continue to attempt to grow our data-centric services, and manage growth; risks associated with international operations (including foreign currency translation risks); dependence on effective information systems; dependence on third parties to enable us to expand and manage our global network and operations; dependence on the implementation and performance of the Company's global ATM+IP communications network; and the outbreak or escalation of hostilities or terroristic acts and adverse geopolitical developments. As such, actual results or circumstances may vary materially from such forward-looking statements or expectations. Readers are also cautioned not to place undue reliance on these forward-looking statements which speak only as of the date these statements were made. Primus is not necessarily obligated to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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|Date:||May 5, 2003|
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