TIM Hellas 9-Months 2004 Summary Financial and Customer Results.ATHENS, Greece -- TIM TIM Timothy TIM Technical Interchange Meeting TIM Transient Intermodulation Distortion TIM Time Is Money TIM The Invisible Man (movie) TIM Telecom Italia Mobile (Italian cellular provider) Hellas Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. SA (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : TIMHY; Amsterdam: STHLS(1)), formerly known as STET Hellas Telecommunications SA, today announced financial and customer results for the nine-months of 2004. Financial Performance Total 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. increased by 6.2% to EUR EUR 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. 644.7 million in the nine-months of 2004, up from EUR 607.3 million in the corresponding period of 2003. Service revenues grew by 5.3% year-on-year to EUR 605.4 million, growing from EUR 574.7 in the nine-months of last year. The increase seen in the company's total operating revenues was primarily sustained by: --Higher monthly fee revenues that increased 28.9% year on year, as a result of the greater contribution of customers on bundled-minutes based packages that are innately in·nate adj. 1. Possessed at birth; inborn. 2. Possessed as an essential characteristic; inherent. 3. Of or produced by the mind rather than learned through experience: more profitable; --Increasing mobile-to-mobile 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. revenues (up 40.3% year-on-year) resulting mainly from increased traffic, as well as a higher interconnection 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 ; --Higher handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. sales (up 20.6% year-on-year) that reached EUR 39.3 million. Specifically regarding the third-quarter revenue growth (up 1.8% year-on-year) the main factors that affected it, were: --The decrease in fixed-to-mobile interconnection revenues (down 28.1% year-on-year) due to a 26.8% year-on-year decrease in the fixed-to-mobile interconnection tariff; --Decreasing prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. outgoing traffic as a result of a lower
prepaid customer base;--Less foreign roamers revenues (down 4.3% year on year) as a result of the overall decline in Greek tourism for the period; 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 (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 & amortization) for the nine-months of the year stood at EUR 196.4 million, compared with EUR 209.7 million in the corresponding period of last year, negatively affected by the: --Lower contribution from fixed-to-mobile interconnection, resulting from the substantial drop in the fixed-to-mobile interconnection tariff; --A significant increase in advertising expenses stemming from the company's widespread re-branding campaign totaling EUR 17.5 million, the majority of which occurred in the first half of the year; --Increased provision for litigations and claims, due to the extra one-off EUR 5.4 million Mobitel case-related amount recorded in the third quarter of 2004. Consequently, the EBITDA margin on total revenues came in at 30.5% in the period, versus 34.5% in the first nine-months of 2003, or 32.4% of service revenues versus 36.5% in the corresponding period of last year. Excluding the re-branding effect as well as the extra provision related to the Mobitel case, "Adjusted" EBITDA would have increased by 4.6% year-on-year to reach EUR 219.3 million, bringing the "Adjusted" EBITDA margin on total revenues to 34.0%, or 36.2% on service revenues.(2) Accordingly, the company's third-quarter EBITDA came in at EUR 77.9 million, down 4.3% if compared to the third quarter of 2003, translating into an EBITDA margin of 33.7% on total revenues versus 35.9% in the third quarter of last year. If clean of the rebranding and the extra Mobitel provision, third-quarter "Adjusted" EBITDA would have increased by 4.1% year-on-year to reach EUR 84.7 million, bringing the "Adjusted" EBITDA margin on total revenues to 36.7%.(3) Operating income for the nine-months of 2004 reached EUR 104.5 million or 17.3% of service revenues, versus EUR 128.6 million in the nine-months of 2003, also affected by higher depreciation and amortization expenses stemming from the continuous increase in the company's fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → , as well as the commencement of UMTS (Universal Mobile Telecommunications System) The GSM implementation of the 3G wireless phone system. Part of IMT-2000, UMTS provides service in the 2 GHz band and offers global roaming and personalized features. license amortization in the beginning of 2004 that accounted for EUR 5.9 million in the period. The company's nine-months 2004 earnings before taxes came in at EUR 97.0 million, compared to EUR 120.2 million in the corresponding period of last year, while net income reached EUR 58.2 million, versus EUR 71.9 million in the nine-months of 2003. At the end of September 2004, net financial debt decreased to EUR 151.7 million, from EUR 167.3 at the end of 2003.(4) The nine-months 2004 results clearly demonstrate that TIM Hellas is undergoing a transformative period, whereby initiatives like the company's rebranding and UMTS launch, together with increasing competitive pressure and a more stringent regulatory environment-- further demonstrated by the second cut within the year in fixed-to-mobile interconnection rates which occurred on October 1, 2004, further dropping to EUR 0.15 per minute with 30 seconds minimum call duration, as already announced this fall, are hurting the company's short term profitability. In order to address these challenges the company will tailor its strategy to continue TIM Hellas' 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. , to meet its consistent commitment towards long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. profitability improvement. The results are un-audited and based on US Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Customer Results TIM Hellas' total customer base reached 2,414,043 at the end of the September 2004, with prepaid customers numbering 1,599,880 and accounting for 66.3% of the total customer base, while contract subscribers amounted to 814,163, or 33.7% of the total customer base. The consistent improvement of the company's contract customer base quality supported a rise in contract monthly traffic per customer (contract AMOU) that grew to 237.4 minutes, up 20.6% year-on-year, which in combination with the 13.2% year-on-year increase in prepaid AMOU, boosted average monthly traffic per customer (blended AMOU) to 106.0 minutes, up 26.2% year-on-year. Accordingly, contract 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. grew by 7.9% to EUR 50.7 in the period, which, coupled with an 8.3% rise in prepaid ARPU that reached EUR 13.7, drove blended ARPU to EUR 27.6, up 13.7% year-on-year.(5) (1) TIM Hellas Telecommunications S.A.'s ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors on the Euronext Amsterdam Stock Exchange
The Amsterdam Stock Exchange is the former name for the stock exchange based in Amsterdam. will shortly become "TIMHY." (2) EBITDA Breakdown In EUR million 9M03 9M04 % Change ---------------------------------------------------------------------- Total Operating Revenues 607.3 644.7 +6.2% ---------------------------------------------------------------------- Total Operating Costs 478.7 540.2 +12.8% ---------------------------------------------------------------------- Operating Income 128.6 104.5 -18.8% ---------------------------------------------------------------------- Depreciation and Amortization 81.1 91.9 +13.3% ---------------------------------------------------------------------- EBITDA 209.7 196.4 -6.3% ---------------------------------------------------------------------- EBITDA margin on total revenues 34.5% 30.5% ---------------------------------------------------------------------- "Adjusted" EBITDA Breakdown Adjusted to exclude the effect of the re-branding related advertising expenses and the Mobitel case related extra provision In EUR million 9M04 ---------------------------------------------------------------------- Total Operating Revenues 644.7 ---------------------------------------------------------------------- Total Operating Costs 540.2 ---------------------------------------------------------------------- Re-branding Costs 17.5 ---------------------------------------------------------------------- Mobitel Case related extra provision 5.4 ---------------------------------------------------------------------- "Adjusted" total Operating costs 517.3 ---------------------------------------------------------------------- "Adjusted" Operating Income 127.4 ---------------------------------------------------------------------- Depreciation and Amortization 91.9 ---------------------------------------------------------------------- "Adjusted" EBITDA 219.3 ---------------------------------------------------------------------- "Adjusted" EBITDA margin on total revenues 34.0% ---------------------------------------------------------------------- (3) EBITDA Breakdown In EUR million 3Q03 3Q04 % Change ---------------------------------------------------------------------- Total Operating Revenues 226.7 230.9 +1.8% ---------------------------------------------------------------------- Total Operating Costs 173.1 181.5 +4.8% ---------------------------------------------------------------------- Operating Income 53.6 49.4 -7.8% ---------------------------------------------------------------------- Depreciation and Amortization 27.8 28.6 +2.8% ---------------------------------------------------------------------- EBITDA 81.4 77.9 -4.3% ---------------------------------------------------------------------- EBITDA margin on total revenues 35.9% 33.7% ---------------------------------------------------------------------- "Adjusted" EBITDA Breakdown Adjusted to exclude the effect of the re-branding related advertising expenses and the Mobitel case related extra provision In EUR million 3Q04 ---------------------------------------------------------------------- Total Operating Revenues 230.9 ---------------------------------------------------------------------- Total Operating Costs 181.5 ---------------------------------------------------------------------- Re-branding Costs 1.4 ---------------------------------------------------------------------- Mobitel Case related extra provision 5.4 ---------------------------------------------------------------------- "Adjusted" total Operating costs 174.7 ---------------------------------------------------------------------- "Adjusted" Operating Income 56.2 ---------------------------------------------------------------------- Depreciation and Amortization 28.6 ---------------------------------------------------------------------- "Adjusted" EBITDA 84.7 ---------------------------------------------------------------------- "Adjusted" EBITDA margin on total revenues 36.7% ---------------------------------------------------------------------- (4) Net financial debt is defined as short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. borrowings plus current maturities of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. plus long-term debt, net of current maturities plus long-term debt due to related companies minus cash and cash equivalents (5) Contract ARPU is defined as total contract customers service revenues divided by nine, over the period's average contract customers. Prepaid ARPU is defined as total prepaid customers service revenues divided by nine, over the period's average prepaid customers. Blended ARPU is defined as total service revenues divided by nine, over the period's average customers TIM Hellas Telecommunications SA (Nasdaq: TIMHY; Amsterdam: STHLS) is at the forefront of mobile communications in Europe
• • [ and its TIM brand stands for innovative products and services. The company's majority shareholder is TIM International NV of the 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. Group (NYSE NYSE See: New York Stock Exchange : TI), and its stock is publicly traded on the Nasdaq and Amsterdam exchanges Amsterdam Exchange (AEX) Exchange that comprises the AEX-Effectenbeurs, the AEX-Optiebeurs (formerly the European Options Exchange or EOE) and the AEX-Agrarische Termijnmarkt. . |
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