Italtel Shows a Good Mix in '06

Softswitch maker Italtel SpA reported solid earnings for the 2006 fiscal year on significant market share improvement in international and emerging markets. (See Italtel Reports 2006.)

For the year, Italtel earned €14.1 million on revenues of €546.1 million, which represents a 2.9 percent increase in income on mostly flat revenue. When converted to dollars, earnings jumped over 13 percent due to the euro's increased strength against the dollar.

Table 1: Italtel's Earnings Growth
    2006   2005   y/y Growth 
Revenue (Thousands) $754,128 $659,818 14.29%
Earnings (Thousands) $18,736 $16,562 13.13%
Note that the USD fell against the EUR from 1.21 to 1.32 over the past year.

Thanks to more VOIP deployments worldwide, Italtel enjoyed a 26.8 percent increase in revenue from its international business due to an increased expansion into emerging markets like the Middle East and Eastern Europe. The company boasts a 21 percent market share in the EMEA softswitch market.

On top of a strong overseas performance, Italtel also further strengthened its domestic business with a better than 50 percent increase in revenues from large enterprises and the public sector.

While the financial numbers by themselves are not mind blowing, Italtel has positioned itself nicely in several potential highgrowth areas. This, combined with the company's financial debt decreasing from €322.2 million to €274.5 million, puts it in a strong position to go public, which it still hasn't done for some odd reason. (See Italtel Cleared for IPO and Italtel Confirms IPO Plan.)

— Raymond McConville, Reporter, Light Reading

jcrawshaw 12/5/2012 | 3:11:20 PM
re: Italtel Shows a Good Mix in '06 Raymond - these results are well below the expectations set when the company tried to IPO last May. 2006 revenues were flat vs 2005 while adjusted EBITDA declined YoY. Net income was also flat YoY at around 2.6% of sales. These numbers are mind blowing, but in a negative sense. This poor performance would make an IPO more difficult than this time last year when the softswitch story still had some promise. The best bet for Italtel's owners is to try and sell the business to Sitronics IMHO. They bought a controlling stake in Intracom Telecom to diversify out of CIS. Italtel has been trying to grow its business in Eastern Europe. Sitronics would probably want to buy a 51% stake initially but they would probably be willing to pay more for this than an IPO would raise for 100% of the company.
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