SOL Announces Further Loss Reduction, Revenues Stabilized.Business Editors STOCKHOLM, Sweden--(BUSINESS WIRE)--Nov. 15, 2001 Scandinavia Online's ("SOL" or "the Group") 3Q2001 revenues were SEK SEK In currencies, this is the abbreviation for the Swedish Krona. 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. 32.6 million, a decrease of 11% compared to SEK 36.8 million in 2Q2001. Despite a contracting market for online advertising, SOL reduced its operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , excluding restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , from SEK 64.4 million in 2Q2001 to SEK 57.1 million in 3Q2001. Including restructuring charges of SEK 18.5 million, the Group's net loss in 3Q2001 was SEK 61.9 million. "We have cut our ongoing 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. from a peak of SEK 178.1 million in 4Q2000 to SEK 89.7 million in 3Q2001. Cost reduction efforts in our operations will continue in 4Q2001, but, more importantly, in 4Q2001 we see growth in revenues for the first time in 12 months," says Birger Steen, 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. . "This has lead us to revise our planned path to profitability: We now aim to deliver a positive EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become result in 4Q2002, one year earlier than originally planned." The share of the Group's revenues originating from brick-and-mortar advertisers increased from 60% in 2Q2001 to 62% in 3Q2001. Also, the Group's share of revenues from other sources than display advertising grew from 23% of revenues in 2Q2001 to 36% in 3Q2001. The average number of monthly unique users visiting SOL's sites was 7.2 million in 3Q2001, 54% up from 3Q2000. The average number of daily page impressions served in 3Q2001 was 7.4 million, 56% up from 3Q2000. Cost reduction efforts in the Group will continue in 4Q2001, in order to secure profitable operations by 4Q2002. SOL Denmark will reduce its number of employees from 40 to 21, and the reduction will entail a restructuring cost of SEK 8 million to be charged against 4Q2001 results. As a result of the reductions Danish operations are expected to generate a positive contribution margin towards covering the Group's central operations Central Operations (CO) is a major command of the London Metropolitan Police that provides operational support to the rest of the service. It is commanded by Assistant Commissioner Tarique Ghaffur. and product development costs as of 2Q2002. "By reducing costs by more than 50% in the last three quarters, we have demonstrated the flexibility of our cost base. Going forward, we will continue focusing on growing our share of the Nordic advertising market and developing new revenues sources, but also, if need be, continue to cut costs," says Mr. Steen. "We are determined to reach a positive EBITDA result in 4Q2002. At the end of 3Q2001 SOL had SEK 412,7 million in cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has , corresponding to SEK 9.07 per share. Hence, we remain confident that we will reach profitability without further funding," concludes Mr. Steen. |
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