- Revenue decreased by 0.6% to €453.7m. After excluding reductions in fixed to mobile prices, revenue increased by 1.1%
- Non-switched revenues grew by 8.9% to €196.5m
- Gross margin before depreciation increased by 0.3 percentage points to 34.9%
- EBITDA(1) decreased by €0.9m to €66.2m
- Profit before taxation of €1.3m compared to a loss before taxation of €27.6m in Q3 2005
- Free cash flow(2) decreased from an inflow of €37.0m to an inflow of €18.5m
Compared to Q2 2006
- Revenue increased by 0.9% to €453.7m. After excluding reductions in fixed to mobile prices, revenue increased by 1.0%
- Non-switched revenue grew by 5.6% to €196.5m
- Gross margin before depreciation increased by 0.4 percentage points to 34.9%
- EBITDA(1) increased by €1.8m to €66.2m
- Profit before taxation of €1.3m compared to a loss before taxation of €9.0m(3) in Q2 2006
- Free cash flow(2) increased by €10.3m to an inflow of €18.5m
Jean–Yves Charlier, Chief Executive Officer, said:
“Market conditions have changed little in the last few months and continue to be tough.
“Excluding the reduction in mobile termination rates, total revenues were up by 1% over both the prior quarter and the equivalent period in 2005, but with faster growth in our key data revenues – up 5.6% on Q2 and 8.9% on last year. Market pressure on COLT’s voice revenues continued, especially in the corporate voice markets in both the UK and Germany.
“Data revenues continue to grow in all regions, led by our Strategic Markets and our Data Centre Solutions and Ethernet products. Lead indicators for data revenues also continue to improve steadily: COLT signed 10 major new deals in the last quarter with total contract value of over €100m and data bookings were up 8% on Q2. Orders for IP Voice and COLT Total continue to grow, but not at the rate that we would expect, and their revenues are not yet material.
“Overall margins improved slightly reflecting an improved revenue mix, but there is continuing market pressure on voice margins. Fixed costs for the quarter were up slightly, with increased severance costs being only partly offset by lower marketing expenditure. Progress continued in our major change programmes, with Germany transitioning to our Barcelona Customer Service Centre and five more countries transferring onto our new India based ERP platform.
“EBITDA grew to €66.2m and the business continues to be free cash flow positive. I am also pleased to report COLT's first ever quarterly profit.
“Our programme of corporate activity was completed in the quarter resulting in an improvement in COLT’s credit rating. Reflecting our continued confidence in the business, we also redeemed the 2008 Notes early.
“We expect to make continued progress this year. Although our revenues are broadly in line with last year, we have an improved revenue mix and earnings growth. Having made continued progress on significantly reducing our losses, we expect to be free cash flow positive for the second year running.”
Colt Technology Services Group Ltd