Forthnet S A : H1 2017 Financial Results

Forthnet S.A.

Registration Number S.A. 34461/06/Β/95/94 G.Ε.Μ.I. 77127927000

Scientific Technological Park of Crete Vassilika Vouton, Iraklion Crete 71003 http://www.forthnetgroup.gr

STATEMENTS OF THE MEMBERS OF THE BOARD OF DIRECTORS 3

BOARD OF DIRECTORS' REPORT ON ΤΗΕ INTERIM CONDENSED FINANCIAL STATEMENTS 4

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION 17

INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME 20

INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION 21

INTERIM CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY 22

INTERIM CONDENSED CASH FLOW STATEMENT 23

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 24

1. Corporate Information 24

2. Basis of Presentation of Financial Statements 25

3. Basis Of Consolidation 26

4. Significant Accounting Policies 26

5. Significant Accounting Judgements and estimates 29

6. Going Concern 29

7. Group Segment Information 31

8. Revenues 31

9. Other expenses 32

10. Income taxes 32

11. Property, plant and equipment 33

12. Intangible Assets 33

13. Goodwill 33

14. Investment in Subsidiaries 34

15. Programme and film rights 35

16. Trade Accounts Receivable 35

17. Share Capital 36

18. Long-term and Short-term borrowings 36

19. Programme and film rights obligations 38

20. Related Parties 38

21. Commitment and Contingencies 41

22. Financial Instruments and Financial Risk Management 42

23. Subsequent Events 45

The following statements, which are effected in accordance with article 5 par. 2 of the L. 3556/2007, as applicable, are given by the following Members of the Board of Directors of the Company:

1. Deepak Srinivas Padmanabhan of Velaidam, resident of Dubai, UAE, President of the Board of Directors

2. Panagiotis Papadopoulos of George, resident of Pallini Attica, Vice-President of the Board of Directors and CEO and

3. Mohsin Majid of Khawaja Abdul, resident of Dubai, UAE, Member of the Board of Directors

   The undersigned, in our above-mentioned capacity, and in particular as specifically appointed by the Board of Directors of the societe anonyme company under the name "Hellenic Company of Telecommunications and Telematic Applications Societe Anonyme" and trade title "Forthnet S.A." (hereinafter referred to as "Company" or as "Forthnet"), we state and we assert that to the best of our knowledge:

4. the interim condensed financial statements of the Company and the Group of the societe anonyme company under the name "Hellenic Company of Telecommunications and Telematic Applications Societe Anonyme" and trade title "Forthnet S.A." for the period from January 1, 2017 to June 30, 2017, which were compiled according to the applicable International Financial Reporting Standards, provide a true and fair view of the assets and the liabilities, the equity and the results of the period of the Company, as well as the companies' which are included in the consolidation, according to that stated in paragraphs 3 to 5 of article 5 of the L.3556/2007 and the relevant executive Decisions of the Board of Directors of the Capital Market Commission.

5. the six-month Report of the Board of Directors of the Company provide a true and fair view the evolution, the achievements and the financial position of the Company, as well as the companies' which are included in the consolidation, including the description of the main risks and uncertainties they face and relevant information that is required according to paragraph 6 of article 5 of the L. 3556/2007, and the relevant executive Decisions of the Board of Directors of the Capital Market Commission.

6. Iraklion, August 7, 2017

   Deepak Srinivas Padmanabhan	Panagiotis Papadopoulos	Mohsin Majid
   President	Vice-President	Member
   of the Board of Directors	of the Board of Directors and	Of the Board of Directors
   Chief Executive Officer

   BOARD OF DIRECTORS' REPORT ON ΤΗΕ INTERIM CONDENSED FINANCIAL STATEMENTS

   The report of the Board of Directors of the Hellenic Company for Telecommunications and Telematic Applications S.A. (hereafter refer to as "Forthnet" or the "Company") has been prepared in accordance with the article 5, law 3556/2007 and refers to the Interim Condensed Financial Statements (Consolidated and ) for the period January 1, 2017 to June 30, 2017.

   The Board of Directors report includes an analysis of the Company's financial performance for the period ended June 30, 2017, the significant events which took place in the first half of 2017, a presentation of the principal risks and uncertainties for the first half of 2017, and the Group's and the Company's significant transactions with related parties.
7. Performance and Key Financial Highlights

   • Τotal (normalized) revenues stood at 149,5 million euro and EBITDA at 16.1 million euro.

   • 3Play/bundled subscribers at 296k.

   • Broadband subscribers at 572k.

   • Pay TV subscribers at 423k.

   • The subscriber base declined as a result of the cautious commercial policy, the imposition of a 10% tax on Pay-TV and 5% tax on fixed telephony and because of the conservative commercial policy followed by the company as well.

   • The underperformance of the Super League has contributed decisively to the decline in financial figures - The company has exhausted all negotiation without result and has filed a lawsuit for price reduction of the collective management agreement.

   • Total Business revenue increased by 7,0% while Advertising revenue increased by 18.1%.

6M 2017	6M 2016	Variance
Total Subscriptions	995,585	1,073,067	-7,2%
Unique Households	699,435	744,606	-6,1%
Households with 3play/Bundled Services	296,150	328,461	-9,8%
Broadband subscribers	572,306	612,815	-6,6%
Pay TV Customers in Greece	423,279	460,252	-8,0%

(.000€)	6M 2017	6M 2016	Variance
Revenue (including other income)	149,353	165,294	-9.6%
Revenue (normalized)*	149,535	165,510	-9.7%
EBITDA	16,099	26,815	-40.0%

*Normalization relates to a reclassification in business revenues which presented in expenses, based on accounting policy.

According to CEO, Mr. Panos Papadopoulos:

«The continuing recession of the Greek Economy coupled with the 10% tax on pay-TV and 5% tax on fixed telephony had a negative impact on the purchasing power of households in the first half of 2017. At the same time, the continuing low performance of the Super League has a negative effect not only In our subscription base, but also in our basic financial figures. In this unfavorable macroeconomic environment, we continue to implement a conservative commercial policy and take actions to further improve our costing model.»