RETELIT S.P.A.
The Group closes the first nine months of 2014 with the following economic and financial results: with a turnover of € 26.9 million (-6.2% compared to the same period of the previous year), EBITDA is positive at €
5.9 million (-22.1% compared to the first nine months of 2013), EBIT is negative at € -2.9 million (€-2.4 million at 30 September 2013), and the net result presents a loss of € 1.8 million (against a loss of€ 1.3 million at 30 September 2013).
Approval of the Consolidated Interim Report on Operations at 30/09/2014
Retelit S.p.A.'s Board of Directors met today and approved the consolidated interim report on operations for the first nine months of 2014.
Below is a summary of the key consolidated financial data for the period, compared with data from the same period of 2013:
Consolidated operating revenues and income at 30 September 2014, of € 26.9 million, represent a decrease of 6.2% (€ 28.7 million in the first nine months of 2013), largely attributable to the unexpected termination - taking effect as of June 2013 - of a contract for international connectivity services, due to the specific operating requirements of the client. There was improvement, instead, in income relating to the granting of usage rights and network maintenance activities, due to the sale, for example, of IRUs for fibre-optic infrastructure for the backhauling requirements of a leading international operator.
EBITDA of € 5.9 million at 30/09/2014, shows a reduction of 22.1% compared to the same period of the previous year, when it stood at € 7.6 million. In addition to a reduction in profit margins connected to lower income and an increase in network costs related to the development of new platforms, there was also an increase in personnel costs following the strengthening of technical and commercial structures, targeted at supporting the activities set out in the 2013-2017 Industrial Plan. These include marketing of the new e-via brand for the provision of services to corporate clients, which was launched in the second half of the year. Finally, there were consulting expenses associated with the implementation of special projects defined in recent months, which the Board of Directors hold to be crucial to the national and International growth of the Company.
Consolidated EBIT was recorded at € -2.9 million at 30/09/2014 (€ -2.4 million in the first nine months of 2013);
The consolidated net result was € -1.8 million at30/09/2014, (€ -1.3 million for the same period last year).
Consolidated investments in the first nine months of 2014 were recorded at € 9.5 million and correspond primarily to development of infrastructure owned by the Group, and payment of the first instalment of USD
4.5 million for participation in the consortium for the next-generation undersea cable system AEE-1, which will connect Europe, Africa, the Middle East and Asia, stretching to Hong Kong.
The network was expanded by 59 km in the quarter, reaching 7,781 km - 2,023 km of which in urban areas. The Net financial position at 30/09/2014 was € 16.6million, down on 31 December 2013 (€ 20.0 million)due
to outgoing cash-flow related to investment activities. At 30/09/2014 the Group had no existing financial liabilities.
During the period in question, Retelit (as detailed in the press releases published online at www.retelit.it) has joined the consortium for the realisation of the AEE-1 undersea cable.
The Group's total investment for the completion of the undersea cable is estimated at a total € 58 mlilion. US$ 45 million of this for participation in the consortium itself and the remainder for related infrastructural investments. In the ten years following completion of the cable infrastructure, i.e. from 2017-2026, the Company plans further investment for the development of associated business, estimated at around € 12 million.
The Company plans to source the necessary funding through:
a. Group liquidity, including the amount of the financial receivable deriving from the transfer of the Wi-Max business unit
b. resources in the form of debt securities, totalling € 20 million, through the execution of the investment agreement signed on 01/10/2014 with KBC Telco Infrastructure Pty Ltd, a company fully held by Keybridge Capital Limited (Australian company listed on the AMX).
c. possible use of the warrants by KBC Telco Infrastructure Pty Ltd in execution of the investment agreement, up to a maximum of € 20 million.
For details of the investment agreement please consult the press releases published online at www.retelit.it. The issue of the financial instruments envisaged in the agreement (convertible and cum- warrant bonds) falls within the purview of the Shareholders' Meeting, which will be called to make a decision in this regard within 120 days of the agreement being signed.
The Company specified that, with reference to the possible issue of a bridge loan by KBC Telco Infrastructure Pty Ltd - in relation to the first issue of convertible bonds, for a total of € 10 miillon, to be reimbursed at the same time as the issue of the first series of convertible bonds - at the date of approval of the Interim Report on Operations at 30/09/2014, said bridge loan had not been used.
Today, the Company's Board of Directors also resolved to proceed with the negotiations for a US institutional investor, with the objective of defining agreements aimed at sourcing further funding. The terms of the transaction will be disclosed to the market upon completion of the related contractual documentation between the parties.
Update of the 2013-2017 Industrial Plan
As a result of continuing political instability in Libya, this year it will not be possible to execute certain international projects planned for the current period, in partnership with the shareholder Libyan Post Telecommunication and IT Company (LPTIC). Consequently, as already communicated in half-yearly report and on the basis of the most recent assessments, the Board of Directors asserts that the targets in the 2013-
2017 Industrial Plan, which state a return to profit this year, cannot be achieved.
By the end of the last quarter of the year, the Board of Directors will approve the update to the Business Plan which will reflect the effects of the project relative to the creation of the AAE-1 undersea cable system.
As previously indicated, on 1 October 2014 Retelit S.p.A. signed an investment agreement with KBC Telco Infrastructure Ltd. to obtain financial resources - through the issue of convertible bonds and warrants for ordinary Retelit shares reserved for this investor - which the Company may use to support its plan for national and international expansion.
Withdrawal of a Director and Co-opting of a New Independent Director
The Board of Directors acknowledged the withdrawal for professional reasons of Mr Alberto Della Porta from the role of Company Independent Director, as of 08 November 2014.
"With thanks to my fellow Directors and the Board of Auditors", declared Alberto Della Porta, "I announce my withdrawal from the Board of Directors due to the incompatibility of the role with a new position which I have recently taken in a foreign multinational. I would like to take this opportunity to wish the Directors, Board of Auditors and Retelit S.p.A. Management every success for the future."
The Chairman of the Board of Directors, Gabriele Pinosa, thanked Alberto Della Porta for his reliable, active contribution on the board.
On the basis of the information currently available to the Company, Alberto Della Porta directly holds 10,500 ordinary shares in Retelit S.p.A.
The Board of Directors also co-opted Daniela Travella as Company Independent Director, with effect from 8
November 2014. Daniela Travella will hold the office of Director until the next Shareholders' Meeting. Daniela
Travella does not hold ordinary shares in Retelit.
Daniela Travella, who graduated with distinction from the Bocconi University in Milan, boasts twenty years of excellent professional experience. Since 1993, she has been an Italian Chartered Accountant, since 1995 a Statutory Auditor, and since 2000, founder of P R O & C O S T U D I O A S S O C I A T O, offering consulting services in business-economics, financial, corporate and fiscal areas. Daniela Travella has gained professional experience with various roles in some of the major industrial and financial players. She is, in fact, an expert in various consulting sectors ranging from tax and business administration to corporate auditing, and accounting and administrative due diligence; preparing corporate auditing materials in support of decision-making; drafting and/or analysing business and economic/financial plans; company valuations; extraordinary financing operations; court-expert consulting, and expert opinions regarding national and international accounting standards. Daniela Travella holds the position of auditor and accountant, and is a member of the Oversight Committee of several companies. She is also a Professor in the Department of Accounting at the Bocconi University in Milan.
The curriculum vitae of the newly appointed Independent Director is available on the Company's website, www.retelit.it.
Following the co-opting of Daniela Travella, the new Board of Directors of Retelit S.p.A. is composed as follows:
Chairman
Majdi AshibaniDeputy Chairman
Stefano BorghiDirector
Abdelmola ElghaliDirector
Johan Anders LeidemanDirector
Mauro Tosi
Director
Independent Director
Paola PillonIndependent Director
Daniela Travella
Independent Director
***
In compliance with the second paragraph of Article 154-bis of the Consolidated Act on Finance, the Company's corporate financial reporting officer, Antonio Maconi, declares that the accounting information in this press release corresponds to the accounting records.
***
The Consolidated Report on Operations at 30 September 2014 is held at the company headquarters in Milan and by Borsa Italiana S.p.A., available for reference on request, as well as being published on the company website at www.retelit.it, pursuant to law.
Retelit S.p.A
With the availability of over 7,700 kilometres of fibre optics, 9 metropolitan networks and 18 data centres, Retelit is one of the leading Italian providers of data transmission services and infrastructure for the telecommunications and ICT markets. Since 2013, thanks to significant investment in new technologies, Retelit's product range has widened with new-generation ultra-broadband VPN services, as well as cloud storage and data- centre services providing added value. Retelit has been listed on the electronic share market (MTA) of the Milan Stock Exchange since 2000.
Investor Relations Institutional Media Relations
Gabriele Pinosa
Tel. +39 022020451 inv.relations@retelit.it
UTOPIA LAB Valentina Burlando Tel. +39 335 6182360
media.relations@retelit.it
***
The reclassified consolidated income statement, cash-flow statement and balance sheet of Retelit S.p.A. at
30 September 2014, are attached.
STATEMENT OF CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2014
(€ thousand) | 30/09/2014 | 31/12/2013 |
Non-current assets: Property, plant and equipment Network i nfras tructure Other property, pl ant and equi pment | 101.284 4.149 | 101.139 449 |
Total property, pl ant and equi pment | 105.433 | 101.588 |
Intangible assets Conces s i ons , l i cences , trademarks and si mi l ar ri ghts Other i ntangi bl e as s ets | 20.320 73 | 22.647 60 |
Total i ntangi bl e ass ets | 20.392 | 22.708 |
Non-current fi nanci al as s ets Prepai d tax as s ets Other non-current as s ets | 14.549 7.200 321 | 14.549 7.200 260 |
Total other non-current as s ets | 22.070 | 22.009 |
TOTAL NON-CURRENT ASSETS | 147.896 | 146.304 |
Current assets: Current fi nanci al ass ets Trade and mi s cel l aneous recei vabl es , and other current as s ets Tax and VAT recei vabl es and current di rect taxati on Cash and cash equi val ents | 5.275 15.282 60 15.611 | 4.261 15.308 30 19.862 |
TOTAL CURRENT ASSETS | 36.227 | 39.461 |
TOTAL ASSETS | 184.124 | 185.765 |
Equity: Is s ued s hare capi tal Res erves and net i ncome for the year Equity and net income for the year | 144.209 (9.029) 135.180 | 144.209 (7.208) 137.000 |
TOTAL EQUITY | 135.180 | 137.000 |
Non-current liabilities: | ||
Empl oyee benefi ts Provi si ons for conti ngenci es and charges Non-current deferred revenue | 981 3.416 20.417 | 963 2.880 20.575 |
TOTAL NON-CURRENT LIABILITIES | 24.814 | 24.418 |
Current liabilities: Trade and mi s cel l aneous payabl es, and other current l i abi l i ti es Tax and VAT payabl es and current di rect taxati on Current deferred revenue | 21.905 242 1.983 | 21.918 387 2.041 |
TOTAL CURRENT LIABILITIES | 24.130 | 24.347 |
TOTAL LIABILITIES | 184.124 | 185.765 |
CONSOLIDATED INCOME STATEMENT AS OF SEPTEMBER 30, 2014
(€ thous and) | 30/09/2014 | 30/09/2013 | III Q 2014 | III Q 2013 |
Revenue Other i ncome | 26.607 317 | 28.072 635 | 8.821 29 | 8.975 33 |
Total revenues and operating income | 26.924 | 28.707 | 8.851 | 9.007 |
Raw materi a l s and outs i de s ervi ces Personnel cos ts Other operati ng expens es | (13.645) (3.770) (3.570) | (14.038) (3.426) (3.616) | (4.783) (1.285) (1.195) | (4.552) (1.139) (1.205) |
OPERATING INCOME BEFORE AMORTIZATION, DEPRECIATION AND IMPAIRMENT | 5.939 | 7.627 | 1.588 | 2.110 |
Amorti sa ti on, depreci a ti on a nd i mpai rment of ta ngi bl e and i nta ngi bl e a s sets Other provi s i ons and wri te-downs | (7.980) (829) | (9.555) (486) | (2.697) (608) | (3.208) (159) |
OPERATING INCOME | (2.871) | (2.414) | (1.717) | (1.256) |
Fi nanci al i ncome Fi nanci al expens e | 1.169 (118) | 1.241 (110) | 378 (93) | 404 (44) |
Profit/(Loss) for the period | (1.820) | (1.283) | (1.433) | (896) |
Net i ncome/(l os s ) recogni s ed under Equi ty not trans ferred from the I ncome Sta tement | - | (12) | ||
Total net income/(loss) for the year | (1.820) | (1.295) | (1.433) | (896) |
Ea rni ngs /(l os s) per s hare
- ba s i c, for the net i ncome/(l os s) for the year attri butabl e to equi ty
hol ders of the Pa rent Company (0,01108) (0,00793)
- di l uted, for the net i ncome/(l os s) for the yea r attri butabl e to equi ty
hol ders of the Pa rent Company (0,01108) (0,00793)
NET FINANCIAL POSITION AS OF SEPTEMBER 30, 2014
BREAKDOWN
Balance at
30.09.2014
Balance at
30.06.2014
Balance at
31.12.2013
A. Cas h | 15.611 | 18.970 | 19.862 |
D. Liquidity | 15.611 | 18.970 | 19.862 |
E. Current financial receivables | 1.014 | 789 | 113 |
I. Current financial debt | 0 | 0 | 0 |
J. Net short-term financial debt I-E-D | (16.625) | (19.759) | (19.975) |
N. Non-current financial debt | 0 | 0 | 0 |
O. Net financial debt J+N | (16.625) | (19.759) | (19.975) |
Total shareholders' equity (P) | 135.180 | 136.613 | 137.000 |
Total equity employed (Q) | 118.555 | 116.854 | 117.025 |
Geari ng O/P | -12,3% | -14,5% | -14,6% |
Net debt/total capi ta l empl oyed (O/Q) | -14,0% | -16,9% | -17,1% |
CONSOLIDATED CASH FLOW STATEMENT AS OF SEPTEMBER 30, 2014
(€ thous and) | 30/09/2014 | 30/09/2013 |
CASH FLOWS FROM OPERATING ACTIVITIES Net i ncome (l os s ) Adjustments: Amorti zati on Wri te-downs Change i n empl oyee benefi ts Change i n provi s i ons for future ri s ks and charges Interes t and fi nanci al cha rges unpai d | (1.820) 7.980 92 18 536 (1.014) | (1.283) 9.555 197 50 (1.424) (1.131) |
CASH FLOWS GENERATED BY (USED FOR) OPERATING ACTIVITIES | 5.793 | 5.965 |
(Increas e)/Decreas e i n tra de recei vabl es and other current as s ets (Increas e)/Decreas e i n tax and VAT recei vabl es and di rect taxati on Increas e/(Decreas e) i n tra de payabl es and deferred revenues Increas e/(Decreas e) i n tax and VAT payabl es and current di rect taxati on | (66) (31) (231) (145) | 2.167 74 (3.464) (60) |
NET CHANGE IN CURRENT ASSETS AND LIABILITIES AND OTHER CHANGES | (473) | (1.284) |
FINANCIAL FLOWS GENERATED BY (USED FOR) OPERATING ACTIVITIES | 5.321 | 4.682 |
CASH FLOWS FROM INVESTING ACTIVITIES Acqui s i ti on of property, pl ant and equi pment Acqui s i ti on of i ntangi bl e a s s ets Net acqui s i ti on of other non-current as s ets | (8.979) (531) (61) | (3.167) (264) - |
CASH FLOWS GENERATED BY (USED FOR) INVESTING ACTIVITIES | (9.572) | (3.431) |
CASH FLOWS FROM FINANCING ACTIVITIES Net (Incres e)/Decreas e of fi nanci al as s ets Change i n s hare capi tal a nd res erves | - - | 305 2.194 |
CASH FLOWS GENERATED BY (USED FOR) FINANCING ACTIVITIES | - | 2.499 |
TOTAL CASH FLOWS | (4.251) | 3.751 |
CASH AND CASH EQUIVALENTS AT YEAR-START | 19.862 | 11.148 |
CASH AND CASH EQUIVALENTS AT YEAR-END | 15.611 | 14.899 |
|
distributed by
|
