OSLO, Norway -- Telio again reports strongest profits ever with an EBIT of NOK 20.2 million in Q2 08. Revenues were NOK 96.7 million, an increase of 7% compared to Q2 07. EBITDA margin was 31%.

Profits were the strongest ever for the company with an EBIT of NOK 20.2 million compared to NOK 3 million in Q2 07 and NOK 12 million in Q1 08. Profit before tax was NOK 20.6 million.

The Telio Group added net 2,972 VoIP customers in the second quarter including 1,600 lines in the SMB market.

Sale to the business market is picking up and currently Telio has above 3,000 lines in this segment in Norway. The product offers a competitive value proposition with a monthly subscription fee of NOK 159 with a start up fee of NOK 0.39. Call charges are similar to the consumer product with zero costs to Western Europe, Poland, North America (incl. mobile), and China.

Financials

Total gross profit in Q2 08 was NOK 59 million (61% margin) compared to NOK 52.1 million (57.6% margin) in Q2 07.

Average monthly revenue per customer (VoIP Norway) during Q2 08 was NOK 261, the same as in the previous quarter. Average monthly gross profit per customer for Norwegian VoIP customers was NOK 171 during the quarter compared to NOK 168 in the previous quarter.

Salaries and personnel costs were NOK 9.3 million in Q2 08 (10% of revenues) including NOK 0.5 million related to the stock option plans. Salaries and personnel costs for the quarter are positively affected by the vacation payment regime in Norway. In addition, the company capitalized NOK 0.8 million in development costs during the quarter. Selling and marketing costs were NOK 8.6 million in Q2 08 (9% of revenues). The company capitalized customer acquisition costs of NOK 1.0 million during the quarter.

Operating profit was NOK 20.2 million in Q2 08 and profit before tax was NOK 20.6 million. Cash flow from operations was NOK 29.6 million in the quarter.

Cash and cash equivalents were NOK 97.4 million at 30 June.

Consolidated equity was NOK 81.8 million (equity ratio of 36%) compared to NOK 65.9 million (31%) at the end of Q1 08. Deferred revenues (current liabilities) decreased by NOK 2.9 million during the quarter. Deferred income at the end of Q2 08 was NOK 42.6 million of which NOK 25 million has been collected and is non-refundable. Total financial lease debt was NOK 15.6 million at the end of the quarter which is NOK 2.4 million below the end of the previous quarter (NOK 18 million). Of the total financial lease debt, NOK 13.5 million was classified as current liabilities (payable within one year from the balance sheet date).

Telio Holding ASA