Completel Reports Q2

Completel Europe posts 20% year-on-year increase in revenues to €46.8M in Q2 and announces expansion plan

July 28, 2005

3 Min Read

PARIS -- Completel Europe NV, a national infrastructure-based operator providing telecom services to the French business market, announced today its results for the quarter ended June 30, 2005. Completel reported quarterly revenue of EUR46.8 million compared to EUR39.1 million in Q2'04, an increase of 20%, and a positive Adjusted EBITDA of EUR8.1 million compared to EUR5.4 million in Q2'04.

Jerome de Vitry, President and CEO of Completel Europe N.V., commented: "Q2'05 is another quarter of continuing positive development with continuing revenue growth, supported by successes in data, leading to a third quarter of positive free cash flow.

I am extremely pleased to announce the launch our expansion plan which will allow us to build on our current fibre access positioning to expand our addressable market meaningfully with an unmatched powerful combination of fibre and unbundled DSL. The success of our business model and the strong development of the French broadband market, combined with a favourable competitive environment, represent a unique growth opportunity for Completel.

Increasing our regional footprint from 9 metropolitan areas to a national coverage across 80 metropolitan areas will significantly strengthen our competitive position in the corporate market and is a direct response to the increasing customer demand for integrated data and voice services and their need to serve all their sites on a national basis.

This network extension is an opportunity to capture a higher share of our customers' total telecom spend, to target the untapped potential of the SME market. We will also be able to address the entire wholesale market through our national coverage, which we will serve where it proves profitable. This strategic move is a natural evolution to serve our customers, both the corporate and the wholesale markets, with the best suite of turn-key voice and data telecommunications solutions.

We are convinced there is now a great market opportunity to grow the Company and to strengthen our position as a key telecom provider to the French corporate market. We have the possibility to become the only alternative operator with a large metropolitan fibre network and a comprehensive DSL coverage of French businesses."

Alexandre Westphalen, Chief Financial Officer, added: "In Q2' 05, we achieved our third consecutive quarter of positive free cash flow. We ended the quarter Q2'05 with EUR1.7 million of free cash and with a significant cash balance of EUR44.9 million on our balance sheet. The continuous growth of revenue along with costs control reduced our net losses to EUR0.5 million in Q2'05 from EUR3.1 million in Q2'04.

In anticipation of ARCEP's decision for call termination expected later this year, we continue to estimate our call termination revenue for 2005 on the basis of the tariff on which Completel and France Telecom settled their 2004 call termination dispute. However, the comments of the Conseil de la Concurrence, published on May 11, 2005, now lead us to estimate that there is a higher probability to obtain final 2005 tariffs close to, or above, our current call termination estimate than below.

Finally, I'm pleased with the successful financing of our expansion plan. This EUR120 million financing fully funds our business plan and gives us the proper financial flexibility to execute our Expansion Plan. This balanced equity and debt placement optimises our balance sheet and financing structure for future years. Our stock issuance close to market price is a tribute of investors' confidence in the company's ability to create shareholders' value through the implementation of this strategic expansion."

Completel S.A.S.

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