2011-07-20 07:00:10 CEST
2011-07-20 07:01:11 CEST
REGULATED INFORMATION
Comptel - Interim report (Q1 and Q3)
INTERIM REPORT OF COMPTEL CORPORATION 1 JAN - 30 JUN 2011
Stock exchange release, 20 July 2011 at 8.00 am
INTERIM REPORT OF COMPTEL CORPORATION
1 JANUARY - 30 JUNE 2011
In April - June, net sales and operating profit declined from the previous year
partly due to the restructuring of operations executed during the review
period.
Key figures for the second quarter:
-- Net sales EUR 20.0 million (Q2 2010: 21.0)
-- Operating profit EUR 1.2 million (3.8), 6.0% of net sales
-- Earnings per share EUR 0.00 (0.03)
-- Order backlog EUR 37.7 million (38.8)
Key figures for the first half:
-- Net sales EUR 36.8 million (H1 2010: 39.0)
-- Operating profit EUR 1.0 million (4.0), 2.8% of net sales
-- Earnings per share EUR -0,01 (0,02)
As earlier stated, Comptel net sales are estimated to grow moderately in 2011.
During this year, the company is investing in the development of its sales and
service channels, and as a result the operating profit is estimated to remain
at the previous year's level.
Juhani Hintikka, President and CEO
”Comptel's order intake improved compared to the previous year. During the
second quarter, our business developed favourably in the Middle East and Africa
where the measures initiated late last year, such as investments in customer
service and consulting resources, have yielded results. In our largest market,
Europe, the net sales remained low, which was the main reason for decreased
Group net sales.
The implementation of our new organisational structure has proceeded as
planned. As of July, we have divided our European business into two regions,
Europe East and Europe West, in order to increase our presence in the emerging
markets of Russia and Eurasia, while allowing us to focus on our large customer
accounts in Western Europe. In addition, Global Services has started its
operations as a new unit. During the spring and early summer, we have
strengthened the composition of our Executive Board with some key appointments.
During the first half of this year, we have invested in sales and service
resources close to customers, as well as in the growth markets. These
initiatives, in line with our stated strategy, impaired the profitability
compared to last year.
Comptel's financial position remained strong in the period under review.”
Business Review for the Second Quarter and the First Half of 2011
In the second quarter, Comptel's net sales decreased by 4.5 per cent from the
previous year and were EUR 20.0 million (21.0). Low revenue in Europe impaired
the Group's net sales. In the first half, net sales decreased 5.6 per cent
compared to the previous year and were EUR 36.8 million (39.0).
In the second quarter, operating profit was EUR 1.2 million (3.8) and the
operating profit margin was 6.0 (18.1). The profitability was decreased partly
by the investments in sales and service organisation. In the first half of the
year, operating profit was EUR 1.0 million (4.0) and the operating profit
margin 2.8 (10.2). Due to restructuring of the European and MEA business units,
Comptel was engaged in statutory cooperation negotiations in Finland during
January - February. As a result of these negotiations, the company made 22
persons redundant. Due to the parallel investments in sales and service
resources close to customers, the total Group headcount is not expected to
decrease. The execution of this process to change the resources involved
subcontracting, which increased the costs during the review period.
Profit before taxes was EUR 0.8 million (3.6). Net loss was EUR 1.5 million
(+2.5). Earnings per share for the period under review were EUR -0.01 negative
(+0.02).
Tax expense for the review period was EUR 2.3 million (1.1), of which EUR 1.0
million were withholding taxes. The cumulative amount of outstanding double
withholding taxes payment is EUR 7.5 million since 2004.
The Group's order backlog was EUR 37.7 million (38.8) at the end of the period.
Maintenance agreements represent EUR 20.4 million (19.8) and other order
backlog EUR 17.3 million (19.0) of the total. Order flow for the new deliveries
increased from the first quarter of the year.
Business Areas
Net sales, 4-6 4-6 Change 1-6 1-6 Change 2010
EUR million 2011 2010 % 2011 2010 %
-----------------------------------------------------------------------
Europe 8.3 10.4 -20.5 14.9 18.5 -19.4 37.1
-----------------------------------------------------------------------
Asia-Pacific 5.4 6.0 -10.1 11.7 11.3 3.6 23.1
-----------------------------------------------------------------------
Middle East and Africa 3.9 2.3 70.3 6.5 4.9 33.5 9.8
-----------------------------------------------------------------------
Americas 2.3 2.1 8.2 3.7 4.3 -14.5 7.8
-----------------------------------------------------------------------
Total 20.0 21.0 -4.5 36.8 39.0 -5.6 77.9
-----------------------------------------------------------------------
Operating profit,
EUR million
-----------------------------------------------------------------------
Europe 3.7 6.1 -38.7 6.2 9.7 -36.7 19.8
-----------------------------------------------------------------------
Asia-Pacific 3.1 3.2 -5.2 7.4 5.7 29.6 13.1
-----------------------------------------------------------------------
Middle East and Africa 1.9 0.5 283.1 2.7 0.9 210.4 2.5
-----------------------------------------------------------------------
Americas 1.3 1.6 -16.0 1.9 2.5 -23.9 4.2
-----------------------------------------------------------------------
Unallocated costs -8.8 -7.6 15.9 -17.2 -14.8 15.6 -30.6
-----------------------------------------------------------------------
Total 1.2 3.8 -68.3 1.0 4.0 -73.7 8.9
-----------------------------------------------------------------------
Operating profit,
% of net sales
-----------------------------------------------------------------------
Europe 44.9 58.3 - 41.2 52.5 - 53.4
-----------------------------------------------------------------------
Asia-Pacific 56.3 53.4 - 63.5 50.8 - 56.6
-----------------------------------------------------------------------
Middle East and Africa 47.9 21.3 - 41.9 18.0 - 25.3
-----------------------------------------------------------------------
Americas 56.9 73.4 - 51.0 57.3 - 53.5
-----------------------------------------------------------------------
Total 6.0 18.1 - 2.8 10.2 - 11.4
-----------------------------------------------------------------------
Net sales in Europe decreased partly as a result of the removal from Comptel of
the maintenance of Telenor Norway's old IT systems last year. Low net sales
impaired the profitability of the region. Net sales grew significantly in the
Middle East and Africa, which also improved the profitability of the region. In
Asia-Pacific the profitability strengthened during the first half of the year.
As of 1 July 2011, Comptel is dividing its European operations into two
business areas, Europe East and Europe West. The net sales and operating profit
figures of the new reporting segments for the period 1 January 2010 - 30 June
2011 are presented on a quarterly basis in this quarterly report's table part
note 2. Segment information.
In January - July, Comptel received 10 significant orders (H1 2010: 8): 2
fulfillment, 6 control & charge and 2 covering both of these main solution
areas. As of this year, Comptel is reporting sold projects and licenses with a
value of EUR 500,000 at the minimum, instead of new core licenses which value
exceed EUR 100,000. This reporting of significant orders reflects better the
nature of Comptel's business.
Net sales 4-6 2011 4-6 2010 Change 1-6 2011 1-6 2010 Change 2010
breakdown % %
by type, EUR
million
--------------------------------------------------------------------------------
Licenses 5.4 6.8 -19.6 11.1 11.3 -1.4 26.2
--------------------------------------------------------------------------------
Services 6.8 5.7 19.8 10.1 10.5 -4.2 18.3
--------------------------------------------------------------------------------
Maintenance 7.7 8.5 -8.8 15.6 17.2 -9.2 33.4
agreements
--------------------------------------------------------------------------------
Total 20.0 21.0 -4.5 36.8 39.0 -5.6 77.9
--------------------------------------------------------------------------------
License sales decreased in the second quarter, but remained at the previous
year's level during the review period. The share of the larger system
deliveries and services increased during the second quarter. Maintenance
revenue consists of the maintenance and support of the systems delivered. The
Telenor arrangement mentioned previously mainly explains the lower maintenance
revenue compared to the year 2010.
Net sales by sales channel, 4-6 4-6 Change 1-6 1-6 Change 2010
EUR million 2011 2010 % 2011 2010 %
-------------------------------------------------------------------------
Direct sales 14.6 14.1 3.7 28.5 26.2 9.0 48.7
-------------------------------------------------------------------------
Partner sales 5.4 6.9 -21.2 8.3 12.9 -35.2 29.2
-------------------------------------------------------------------------
Total 20.0 21.0 -4.5 36.8 39.0 -5.6 77.9
-------------------------------------------------------------------------
The share of direct sales increased. There were only a few partner projects
during the period. However, the role of partners was significant in several
deals booked in as direct sales.
Financial Position
EUR million 30 June 31 Dec Change 30 Jun Change
2011 2010 % 2010 %
--------------------------------------------------------------------------------
Statement of financial 71.0 76.4 -7.0 80.9 -12.1
position total
--------------------------------------------------------------------------------
Liquid assets 7.4 7.0 5.2 6.6 11.5
--------------------------------------------------------------------------------
Trade receivables, gross 21.0 25.1 -16.5 26.5 -20.8
--------------------------------------------------------------------------------
Bad debt provision -0.8 -0.8 -0.8 -0.8 3.1
--------------------------------------------------------------------------------
Trade receivables, net 20.2 24.3 -17.0 25.7 -21.6
--------------------------------------------------------------------------------
Accrued income 7.9 7.6 4.1 11.0 -28.6
--------------------------------------------------------------------------------
Deferred income related to 2.0 1.9 5.5 1.8 12.7
partial debiting
--------------------------------------------------------------------------------
Interest-bearing debt 0.1 0.1 -18.1 4.0 -97.9
--------------------------------------------------------------------------------
Equity ratio, per cent 72.3 71.6 0.9 65.4 10.5
--------------------------------------------------------------------------------
The statement of financial position total on 30 June 2011 was 71.0 million, of
which liquid assets amounted to EUR 7.4 million. The dividends of EUR 4.3
million (3.2) were paid this year.
The operating cash flow was EUR 3.5 million (5.3) in the second quarter and EUR
6.6 million (10.6) during the first half.
The trade receivables were EUR 20.2 million (25.7) at the end of the period.
The accrued income was EUR 7.9 million (11.0). The deferred income related to
partial debiting was EUR 2.0 million (1.8).
Comptel Corporation has available in full a revolving credit facility of EUR
15.0 million maturing in the year 2013. The equity ratio was 72.3 per cent
(65.4) and the gearing ratio was 16.6 per cent negative (-5.7).
Research and Development (R&D)
EUR million 4-6 4-6 Change 1-6 1-6 Change 2010
2011 2010 % 2011 2010 %
--------------------------------------------------------------------------------
Direct R&D expenditure 3.9 3.0 27.8 7.7 6.3 22.0 13.4
--------------------------------------------------------------------------------
Capitalisation of R&D -1.1 -1.2 -10.3 -2.1 -2.1 -1.8 -3.9
expenditure according to IAS 38
--------------------------------------------------------------------------------
R&D depreciation and 0.8 0.9 -12.6 1.7 1.9 -7.2 3.7
impairment charges
--------------------------------------------------------------------------------
R&D expenditure, net 3.6 2.8 30.4 7.4 6.1 21.2 13.2
--------------------------------------------------------------------------------
The R&D expenditure remained at the level of the previous quarter and is
expected to remain at the current level during this year. The R&D expenditure
represented 21.0 per cent of net sales (16.2).
Comptel's R&D expenditure was mainly targeted at the service fulfillment
automation of telecom operators and to the management in real-time of rapidly
increasing data traffic. In addition, the company is developing an integrated
software platform, which will enable a cost-efficient and solution-based R&D.
Investments
EUR million 4-6 4-6 Change 1-6 1-6 Change 2010
2011 2010 % 2011 2010 %
--------------------------------------------------------------------------------
Gross investments in property, 0.2 0.2 15.6 0.4 0.8 -46.3 1.1
plant and equipment and
intangible assets
--------------------------------------------------------------------------------
Gross investments in the financial year comprised of investments in devices,
software and furnishings. The investments were funded through cash flow from
operations.
Personnel 30 June 30 June Change 31 Dec
2011 2010 % 2010
--------------------------------------------------------------------------------
Number of employees at the end of 629 597 5.4 589
period
--------------------------------------------------------------------------------
1-6 2011 1-6 2010 Change % 2010
--------------------------------------------------------------------------------
Average number of personnel during the 608 591 2.9 586
period
--------------------------------------------------------------------------------
The number of employees increased as Comptel placed more resources close to key
customers and in the growth markets in line with its strategy. The numbers of
the review period include persons made redundant in Finland.
In April - June, the personnel expenses were 45.3 per cent of net sales (43.9).
In the first half, the personnel expenses were 48.6 per cent of net sales
(46.8).
At the end of the period, 34.8 per cent (38.5) of the personnel were located in
Finland, 24.8 per cent (20.4) in Malaysia, 9.4 per cent (8.9) in the United
Kingdom, 7.0 per cent (4.4) in Bulgaria, 6.2 per cent (10.9) in Norway, and
17.8 per cent (16.9) in other countries where Comptel operates.
Comptel Share
The closing share price of the period was EUR 0.61 (0.74). Comptel's market
value at the end of the period was EUR 65.2 million (78.8).
Comptel share 4-6 2011 4-6 2010 Change 1-6 2011 1-6 2010 Change 2010
% %
--------------------------------------------------------------------------------
Shares traded, 6.0 3.1 92.7 17.2 7.1 142.1 38.3
million
--------------------------------------------------------------------------------
Shares traded, EUR 3.7 2.6 45.9 11.9 5.8 104.5 29.0
million
--------------------------------------------------------------------------------
Highest price, EUR 0.72 0.91 -20.9 0.79 0.95 -16.8 0.95
--------------------------------------------------------------------------------
Lowest price, EUR 0.54 0.74 -27.0 0.54 0.74 -27.0 0.68
--------------------------------------------------------------------------------
Of Comptel's outstanding shares, 7.3 per cent (6.4) were nominee registered or
held by foreign shareholders at the end of the period.
OP-Pohjola Group Central Cooperative notified on 2 February 2011 that the total
holdings in Comptel Corporation shares of its interest communities and the
mutual funds managed by the subsidiary of OP-Pohjola have decreased to below
the threshold of 5 per cent.
During the period, Comptel Corporation allotted 312,920 shares as part of
share-based incentives to persons involved in the program and 110,148 shares to
the members of the Board of Directors as part of their annual compensation.
The company held 183,900 of its own shares at the end of the period, which is
0.17 per cent of the total number of its shares. The total counter-book value
of the shares held by the company was EUR 3,678.
During the review period, a total of 1,310,000 share options 2009C have been
distributed to the key personnel of Comptel Group. The current share
subscription price for option 2009C is EUR 0.67, which corresponds to the trade
volume weighted average quotation of the Comptel share on the NASDAQ OMX
Helsinki during 1 April - 30 April 2011.
Corporate Governance
The Annual General Meeting (AGM), held on 23 March 2011, re-elected the
following members for the Board of Directors: Mr Olli Riikkala, Mr Hannu
Vaajoensuu, Mr Timo Kotilainen, Mr Juhani Lassila, Mr Petteri Walldén and Mr
Henri Österlund. In its meeting held after the AGM, the Board of Directors
re-elected Mr Olli Riikkala as chairman and Mr Hannu Vaajoensuu as vice
chairman. Mr Juhani Lassila continues as chairman of the audit committee in
which the other members are Mr Petteri Walldén and Mr Henri Österlund. Mr Olli
Riikkala continues as chairman of the compensation committee in which the other
members are Mr Timo Kotilainen and Mr Hannu Vaajoensuu.
The AGM approved the proposal of Board of Directors that a dividend of EUR 0.04
per share be paid for 2010. The dividend was paid on 8 April 2011.
The AGM authorised the Board of Directors to decide on share issues amounting
to a maximum of 21,400,000 new shares and on repurchase of the company's own
shares up to a maximum number of 10,700,000 shares. The authorisations are
valid until 30 June 2012.
A separate stock exchange release about the authorisations given and other
decisions made by the Annual General Meeting was published on 23 March 2011.
Mr Juhani Hintikka has acted as the President and CEO of Comptel as of 3
January 2011.
In March, Comptel announced its intention to adjust its operating structure in
order to accelerate the execution of its growth strategy.
As of 1 April, a new unit of Corporate Development became operative. It
combines Strategic Planning, Legal, Investor Relations and Communications,
Marketing, and IT. Mr Simo Sääskilahti, SVP of Products and Solutions, was
appointed as Senior Vice President of Corporate Development.
The European business area is divided as of 1 July 2011 into two regions:
Europe East and Europe West. This move allows Comptel to focus its efforts on
the growth areas especially in Russia and Eurasia, while remaining actively
involved in its large customer accounts in Western Europe. Mr Timo Koistinen,
SVP for region Europe, was appointed as Senior Vice President for the region
Europe East. Mr Mauro Carobene was appointed as Senior Vice President for the
region Europe West and he joined Comptel as of 28 April 2011. Mr Carobene
joined Comptel from Nokia Siemens Networks where he most recently was
responsible for the OSS Consulting and Systems Integration business globally.
Comptel has established a new unit called Global Services to develop services
business and manage service products. Mr Kari Onniselkä was appointed as Senior
Vice President for Global Services as of 1 July 2011. He joined Comptel from
Talent Partners, a leader in Finnish consulting and training market, where he
was Managing Director.
Mr Antti Koskela was appointed as Senior Vice President for Products and
Solutions as of 1 July 2011. He joined Comptel from Nokia Siemens Networks
where, most recently he held the position of Head of the Communication &
Entertainment Solutions Business Line.
Mr Veqar Islam was appointed as Senior Vice President for the business area
Middle East and Africa as of 1 August 2011. He will join Comptel from Nokia
Siemens Networks where he most recently has been heading the Sub Region Middle
East - East.
As of 1 July 2011, Comptel Group has the following five reportable business
segments: Europe East, Europe West, Asia-Pacific, Middle East and Africa,
Americas.
Following the changes in the operating structure and the key appointments, the
members of Comptel Executive Board are CEO Juhani Hintikka, the business area
leaders Mr Timo Koistinen (Europe East), Mr Mauro Carobene (Europe West), Mr
Mika Korpinen (Asia-Pacific), Mr Veqar Islam (Middle East and Africa) and Mr
Diego Becker (Americas), Mr Antti Koskela responsible for Products and
Solutions, Mr Kari Onniselkä responsible for Global Services, Mr Gareth Senior
(CTO), Mr Mikko Hytönen (CFO), Ms Niina Pesonen (HR), and Mr Simo Sääskilahti
(Corporate Development and Deputy CEO).
Near-term Risks and Uncertainties
Comptel develops dynamic end-to-end solutions for leading operators globally in
the telecom field. This requires Comptel to understand correctly the trends
taking place in its business environment and the needs of its customers and
resellers by each region. Failure to identify market conditions, address
customers' needs and develop its products in a timely way may significantly
undermine the growth of Comptel's business and its profitability.
Characteristics for Comptel's field of industry are significant quarterly
variations of net sales and profit, which are related to customers' purchasing
behaviour and the timing of major single deals.
Comptel is implementing a customer and partner intimate business model which
requires getting competent resources closer to key customers and partners in
certain growth markets.
Comptel operates globally so it is exposed to risks arising from different
currency positions. Exchange rate changes between the Euro, which is the
company's reporting currency, and the US Dollar, UK Pound Sterling and
Norwegian Krone affect the company's net sales, expenses and net profit.
The application process to prevent Comptel's double taxation is still pending
with the Ministry of Finance in Finland. Comptel is striving to change the
treatment of its withholding taxation for those countries where the issue is
still pending. Resolving the matter between states, however, includes factors
beyond the Company's control.
The risks and uncertainties of Comptel are described more in detail in
Comptel's annual report 2010.
Outlook
Comptel net sales are estimated to grow moderately in 2011. During this year,
the company is investing in the development of its sales and service channels,
and as a result the operating profit is estimated to remain at the previous
year's level.
TABLE PART
The interim financial statements have been prepared in accordance with IAS 34,
Interim Financial Reporting, as adopted by the EU. The accounting policies and
methods of computation adopted in the financial statements are consistent with
those of the annual financial statements for the year ended 2010 except for the
application of new or amended standards and interpretations as set forth in
note 1.
All figures in the financial report have been rounded and consequently the sum
of the individual figures can deviate from the sum figure. The interim report
is unaudited.
Consolidated Statement of Comprehensive 1 Jan - 1 Jan - 1 Apr - 1 Apr -
Income 30 Jun 30 Jun 30 Jun 30 Jun
(EUR 1,000) 2011 2010 2011 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 36,841 39,023 20,016 20,956
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other operating income 16 20 12 17
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Materials and services -2,017 -1,629 -1,244 -888
--------------------------------------------------------------------------------
Employee benefits -17,905 -18,256 -9,061 -9,196
--------------------------------------------------------------------------------
Depreciation, amortisation and -2,603 -3,131 -1,243 -1,573
impairment charges
--------------------------------------------------------------------------------
Other operating expenses -13,286 -12,048 -7,279 -5,528
--------------------------------------------------------------------------------
-35,810 -35,064 -18,828 -17,185
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit/loss 1,047 3,979 1,200 3,788
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income 401 1,160 153 942
--------------------------------------------------------------------------------
Financial expenses -668 -1,566 -253 -1,113
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss before income taxes 780 3,573 1,100 3,617
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -2,275 -1,096 -946 -368
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period -1,494 2,477 153 3,249
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Cash flow hedges 352 -812 -101 -701
--------------------------------------------------------------------------------
Translation differences -17 998 46 616
--------------------------------------------------------------------------------
Income tax relating to components of -91 211 26 182
other comprehensive income
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income for the -1,251 2,875 125 3,346
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company -1,494 2,477 153 3,249
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income attributable
to:
--------------------------------------------------------------------------------
Equity holders of the parent company -1,251 2,875 125 3,346
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders of the parent company:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR -0.01 0.02 0.00 0.03
--------------------------------------------------------------------------------
Earnings per share, diluted, EUR -0.01 0.02 0.00 0.03
--------------------------------------------------------------------------------
Consolidated Statement of Financial Position (EUR 30 Jun 2011 31 Dec 2010
1,000)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Goodwill 19,219 19,626
--------------------------------------------------------------------------------
Other intangible assets 10,918 10,948
--------------------------------------------------------------------------------
Tangible assets 1,550 1,842
--------------------------------------------------------------------------------
Investments in associates 1,003 1,003
--------------------------------------------------------------------------------
Available-for sale financial assets 87 87
--------------------------------------------------------------------------------
Deferred tax assets 543 783
--------------------------------------------------------------------------------
Other non-current receivables 470 432
--------------------------------------------------------------------------------
33,790 34,721
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Trade and other current receivables 29,866 34,616
--------------------------------------------------------------------------------
Cash and cash equivalents 7,392 7,028
--------------------------------------------------------------------------------
37,258 41,644
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 71,048 76,365
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity and liabilities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of the parent
company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Share capital 2,141 2,141
--------------------------------------------------------------------------------
Fund of invested non-restricted equity 7,651 7,575
--------------------------------------------------------------------------------
Translation differences -875 -858
--------------------------------------------------------------------------------
Retained earnings 35,090 40,287
--------------------------------------------------------------------------------
Total equity 44,007 49,146
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 5,796 5,762
--------------------------------------------------------------------------------
Provisions 1,606 1,954
--------------------------------------------------------------------------------
Non-current financial liabilities 38 68
--------------------------------------------------------------------------------
Other non-current liabilities - 1
--------------------------------------------------------------------------------
7,440 7,784
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Trade and other current liabilities 19,553 19,398
--------------------------------------------------------------------------------
Current financial liabilities 48 36
--------------------------------------------------------------------------------
19,601 19,435
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 27,041 27,219
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 71,048 76,365
--------------------------------------------------------------------------------
Consolidated Statement of Cash Flows 1 Jan - 30 1 Jan - 30
(EUR 1,000) Jun 2011 Jun 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period -1,494 2,477
--------------------------------------------------------------------------------
Adjustments:
--------------------------------------------------------------------------------
Non-cash transactions or items that are not part of 3,164 3,870
cash flows from operating activities
--------------------------------------------------------------------------------
Interest and other financial expenses 20 86
--------------------------------------------------------------------------------
Interest income -16 -12
--------------------------------------------------------------------------------
Income taxes 2,275 1,096
--------------------------------------------------------------------------------
Change in working capital:
--------------------------------------------------------------------------------
Change in trade and other current receivables 5,053 1,082
--------------------------------------------------------------------------------
Change in trade and other current liabilities -8 1,023
--------------------------------------------------------------------------------
Change in provisions -348 196
--------------------------------------------------------------------------------
Interest paid -20 -105
--------------------------------------------------------------------------------
Interest received 12 8
--------------------------------------------------------------------------------
Income taxes paid and tax returns received -2,042 835
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash from operating activities 6,596 10,557
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------
Investments in tangible assets -261 -743
--------------------------------------------------------------------------------
Investments in intangible assets -157 -36
--------------------------------------------------------------------------------
Investments in development projects -2,050 -2,088
--------------------------------------------------------------------------------
Change in other non-current receivables -45 -14
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in investing activities -2,514 -2,882
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from financing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dividends paid -4,270 -3,191
--------------------------------------------------------------------------------
Acquisition of Corporation's own shares - -468
--------------------------------------------------------------------------------
Lease payments -19 -
--------------------------------------------------------------------------------
Proceeds from borrowings - 4,000
--------------------------------------------------------------------------------
Repayment of borrowings - -8,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in financing activities -4,289 -7,659
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents -208 15
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the 7,028 6,730
period
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 7,392 6,631
--------------------------------------------------------------------------------
Change 364 -98
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Effects of changes in foreign exchange rates 572 -113
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
--------------------------------------------------------------------------------
-
Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-
EUR 1,000 Share Other Translati Fair Treasur Retained Total
capita reserv on value y earnings
l es differenc reserve shares
es
--------------------------------------------------------------------------------
Equity at 31 Dec 2,141 7,499 -1,757 -45 -287 38,748 46,299
2009
--------------------------------------------------------------------------------
Dividends -3,191 -3,191
--------------------------------------------------------------------------------
Acquisition of -468 -468
Corporation's
own shares
--------------------------------------------------------------------------------
Transfer of 76 129 -129 76
treasury shares
--------------------------------------------------------------------------------
Share-based 330 330
compensation
--------------------------------------------------------------------------------
Total 998 -601 2,477 2,875
comprehensive
income for the
period
--------------------------------------------------------------------------------
Equity at 2,141 7,575 -759 -646 -626 38,235 42,921
30 Jun 2010
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
--------------------------------------------------------------------------------
-
Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-
EUR 1,000 Share Other Translati Fair Treasur Retained Total
capita reserv on value y earnings
l es differenc reserve shares
es
--------------------------------------------------------------------------------
Equity at 2,141 7,575 -858 -40 -600 40,927 49,146
31 Dec 2010
--------------------------------------------------------------------------------
Dividends -4,270 -4,270
--------------------------------------------------------------------------------
Transfer of 76 225 -225 76
treasury shares
--------------------------------------------------------------------------------
Share-based 307 307
compensation
--------------------------------------------------------------------------------
Total -17 260 -1,494 -1,251
comprehensive
income for the
period
--------------------------------------------------------------------------------
Equity at 2,141 7,651 -875 221 -375 35,244 44,007
30 Jun 2011
--------------------------------------------------------------------------------
Notes
1. Application of new or amended standards and interpretations
On 1 January 2011 the Group adopted the following new and amended standards and
interpretations endorsed by the EU and that are applicable to Comptel:
Revised IAS 24 Related Party Disclosures. The amendment simplifies and
clarifies the definition of a related party and relaxes the disclosure
requirements of business operations between public enterprises.
Improvements to IFRSs (May 2010) (mainly effective for financial periods
beginning on or after 1 July 2010). Under this procedure minor and non-urgent
amendments are grouped together and carried out through a single document
annually.
2. Segment information
Net sales by segment
EUR 1,000 1 Jan - 1 Jan - 1 Apr - 1 Apr -
30 Jun 2011 30 Jun 2010 30 Jun 2011 30 Jun 2010
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Europe 14,944 18,541 8,306 10,443
--------------------------------------------------------------------------
Asia-Pacific 11,686 11,277 5,440 6,050
--------------------------------------------------------------------------
Middle East and Africa 6,506 4,873 3,947 2,317
--------------------------------------------------------------------------
Americas 3,706 4,332 2,323 2,146
--------------------------------------------------------------------------
Group total 36,841 39,023 20,016 20,956
--------------------------------------------------------------------------
Operating profit/loss by segment
EUR 1,000 1 Jan - 30 1 Jan - 30 1 Apr - 30 1 Apr - 30
Jun 2011 Jun 2010 Jun 2011 Jun 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Europe 6,163 9,728 3,732 6,091
--------------------------------------------------------------------------------
Asia-Pacific 7,421 5,728 3,061 3,229
--------------------------------------------------------------------------------
Middle East and Africa 2,724 878 1,892 494
--------------------------------------------------------------------------------
Americas 1,891 2,484 1,323 1,575
--------------------------------------------------------------------------------
Group unallocated -17,152 -14,839 -8,808 -7,602
expenses
--------------------------------------------------------------------------------
Group operating 1,047 3,979 1,200 3,788
profit/loss total
--------------------------------------------------------------------------------
Financial income and -267 -406 -100 -171
expenses
--------------------------------------------------------------------------------
Group profit/loss 780 3,573 1,100 3,617
before income taxes
--------------------------------------------------------------------------------
As of 1 July 2011 Europe is divided into two segments: Europe East and Europe
West. The figures for the new segments are as follows:
Net sales
EUR 1,000 1 Jan - 30 Jun 1 Jan - 30 Jun 1 Apr - 30 Jun 1 Apr - 30 Jun
2011 2010 2011 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Europe 6,752 9,826 3,918 5,614
East
--------------------------------------------------------------------------------
Europe 8,192 8,715 4,387 4,830
West
--------------------------------------------------------------------------------
Total 14,944 18,541 8,306 10,443
--------------------------------------------------------------------------------
Operating profit/loss
EUR 1,000 1 Jan - 30 Jun 1 Jan - 30 Jun 1 Apr - 30 Jun 1 Apr - 30 Jun
2011 2010 2011 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Europe 1,922 4,362 1,487 2,916
East
--------------------------------------------------------------------------------
Europe 4,240 5,366 2,245 3,176
West
--------------------------------------------------------------------------------
Total 6,163 9,728 3,732 6,091
--------------------------------------------------------------------------------
Quarterly figures:
Net sales
EUR 1,000 4-6 2011 1-3 2011 10-12 2010 7-9 2010 4-6 2010 1-3 2010
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Europe East 3,918 2,834 5,622 4,069 5,614 4,212
-------------------------------------------------------------------------
Europe West 4,387 3,804 5,154 3,741 4,830 3,885
-------------------------------------------------------------------------
Total 8,306 6,638 10,776 7,810 10,443 8,098
-------------------------------------------------------------------------
Operating profit/loss
EUR 1,000 4-6 2011 1-3 2011 10-12 2010 7-9 2010 4-6 2010 1-3 2010
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Europe East 1,487 435 2,780 1,637 2,916 1,477
-------------------------------------------------------------------------
Europe West 2,245 1,995 3,412 2,251 3,176 2,190
-------------------------------------------------------------------------
Total 3,732 2,431 6,193 3,889 6,091 3,637
-------------------------------------------------------------------------
3. Income tax expense
Tax expense according to the statement of comprehensive income for the period
was EUR 2,275 thousand (EUR 1,096 thousand 2010).
In 2006, Adjustment of the Tax Office for Major Corporations refused to accept
the crediting of taxes withheld at source in taxation of 2004 and 2005.
The Ministry of Finance has come to an agreement with Greece and Romania.
Relating to these countries, Comptel has booked EUR 595 thousand tax
receivables for taxes withheld in 2004 -2008. The refund process pertaining to
these countries is still pending with the relevant tax authorities. Comptel is
pursuing the negotiations with the Ministry of Finance and other countries that
have withheld tax at source to avoid double taxation.
According to the Board of Adjustment's decision currently in force, Comptel
Corporation has expensed taxes withheld at source amounting to EUR 921 thousand
in January - June (EUR 844 thousand).
4. Tangible assets
EUR 1,000 1 Jan - 30 Jun 2011 1 Jan - 30 Jun 2010
---------------------------------------------------
---------------------------------------------------
Additions 261 743
---------------------------------------------------
Disposals - -30
---------------------------------------------------
5. Related party transactions
The Comptel Group has a related party relationship with its associate, the
Board of Directors, the Executive Board and also with people and companies
under Comptel management's influence.
Transactions, which have been entered into with related parties are as follows:
EUR 1,000 1 Jan - 30 Jun 2011 1 Jan - 30 Jun 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Associate
--------------------------------------------------------------------------------
Purchases of goods and services 91 100
--------------------------------------------------------------------------------
Interest income 4 4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Companies under management's influence
--------------------------------------------------------------------------------
Purchases of goods and services 7 24
--------------------------------------------------------------------------------
EUR 1,000 30 Jun 2011 31 Dec 2010
----------------------------------------------------------------
----------------------------------------------------------------
Associate
----------------------------------------------------------------
Non-current receivables 87 83
----------------------------------------------------------------
Trade and other current liabilities 39 -
----------------------------------------------------------------
----------------------------------------------------------------
Companies under management's influence
----------------------------------------------------------------
Trade and other current liabilities 1 1
----------------------------------------------------------------
Remuneration to key management
The key management personnel compensation includes the employee benefits of the
members of the Board of Directors and the Executive Board.
EUR 1,000 1 Jan - 30 Jun 1 Jan - 30 Jun
2011 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Salaries and other short-term employee 1,277 1,244
benefits
--------------------------------------------------------------------------------
Share-based payments 159 187
--------------------------------------------------------------------------------
Total 1,436 1,431
--------------------------------------------------------------------------------
6. Commitments
Minimum lease payments on non-cancellable office facilities and other operating
leases are payable as follows:
EUR 1,000 30 Jun 2011 31 Dec 2010
----------------------------------------------------
----------------------------------------------------
Less than one year 3,774 3,597
----------------------------------------------------
Between one and five years 10,539 11,226
----------------------------------------------------
More than five years - 751
----------------------------------------------------
Total 14,313 15,574
----------------------------------------------------
The group had no material capital commitments for the purchase of tangible
assets at 30 June 2011 and 30 June 2010.
7. Contingent liabilities
EUR 1,000 30 Jun 2011 31 Dec 2010
-----------------------------------------
-----------------------------------------
Bank guarantees 1,694 2,061
-----------------------------------------
8. Key figures
Financial summary 1 Jan - 30 1 Jan - 30 1 Jan - 31
Jun 2011 Jun 2010 Dec 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR 1,000 36,841 39,023 77,888
--------------------------------------------------------------------------------
Net sales, change % -5.6 11.1 4.0
--------------------------------------------------------------------------------
Operating profit/loss, EUR 1,000 1,047 3,979 8,908
--------------------------------------------------------------------------------
Operating profit/loss, change % -73,7 229.6 775.2
--------------------------------------------------------------------------------
Operating profit/loss, as % of net 2,8 10.2 11.4
sales
--------------------------------------------------------------------------------
Profit/loss before taxes, EUR 1,000 780 3,573 8,512
--------------------------------------------------------------------------------
Profit/loss before taxes, as % of net 2.1 9.2 10.9
sales
--------------------------------------------------------------------------------
Return on equity, % - - 9.9
--------------------------------------------------------------------------------
Return on investment, % - - 16.3
--------------------------------------------------------------------------------
Equity ratio, % 72.3 65.4 71.6
--------------------------------------------------------------------------------
Gross investments in tangible and 419 779 1,124
intangible assets, EUR 1,000
--------------------------------------------------------------------------------
Gross investments in tangible and 1.1 2.0 1.4
intangible assets, as % of net sales
--------------------------------------------------------------------------------
Capitalisations according to IAS 38 to 2,050 2,088 3,932
intangible assets
--------------------------------------------------------------------------------
Research and development expenditure, 7,726 6,333 13,414
EUR 1,000
--------------------------------------------------------------------------------
Research and development expenditure, 21.0 16.2 17.2
as % of net sales
--------------------------------------------------------------------------------
Order backlog, EUR 1,000 1) 37,664 38,796 34,049
--------------------------------------------------------------------------------
Average number of employees during the 608 591 586
period
--------------------------------------------------------------------------------
Interest-bearing net liabilities, EUR -7,306 -2,631 -6,923
1,000
--------------------------------------------------------------------------------
Gearing ratio, % -16.6 -5.7 -14.1
--------------------------------------------------------------------------------
1) The order book may vary significantly during the financial period.
--------------------------------------------------------------------------------
-
Per share data 1 Jan - 30 Jun 1 Jan - 30 Jun 1 Jan - 31
2011 2010 Dec 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share (EPS), EUR -0.01 0.02 0.04
--------------------------------------------------------------------------------
EPS diluted, EUR -0.01 0.02 0.04
--------------------------------------------------------------------------------
Equity per share, EUR 0.41 0.43 0.46
--------------------------------------------------------------------------------
Dividend per share, EUR - - 0.04
--------------------------------------------------------------------------------
Dividend per earnings, % - - 90.6
--------------------------------------------------------------------------------
Effective dividend yield, % - - 5.8
--------------------------------------------------------------------------------
P/E ratio - - 15.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Adjusted number of shares at the 107,054,810 107,054,810 107,054,810
end of the period
--------------------------------------------------------------------------------
of which the number of treasury 183,900 633,947 599,905
shares
--------------------------------------------------------------------------------
Outstanding shares 106,870,910 106,420,863 106,454,905
--------------------------------------------------------------------------------
Adjusted average number of shares 106,716,007 106,501,006 106,477,113
during the period
--------------------------------------------------------------------------------
Average number of shares, 107,750,336 106,774,339 107,398,488
dilution included
--------------------------------------------------------------------------------
9. Definition of key figures
--------------------------------------------------------------------------------
Operating margin % = Operating profit/loss x100
------------------------------------ -----------------------------------------
Net sales
------------------------------------ -----------------------------------------
------------------------------------ -----
Profit margin (before income taxes) = Profit/loss before taxes x100
%
------------------------------------ -----------------------------------------
Net sales
------------------------------------ -----------------------------------------
------------------------------------ -----
Return on equity % (ROE) = Profit/loss x100
------------------------------------ -----------------------------------------
Total equity (average during year)
------------------------------------ -----------------------------------------
------------------------------------ -----
Return on investment % (ROI) = Profit/loss before taxes + x100
financial expenses
------------------------------------ -----------------------------------------
Total equity + interest bearing
liabilities (average during the
year)
------------------------------------ -----------------------------------------
------------------------------------ -----
Equity ratio % = Total equity x100
------------------------------------ -----------------------------------------
Statement of financial position total - advances received
------------------------------------ -----------------------------------------
------------------------------------ -----
Gross investments in tangible and = Gross investments in tangible and x100
intangible assets, as % of net intangible assets
sales
------------------------------------ -----------------------------------------
Net sales
------------------------------------ -----------------------------------------
------------------------------------ -----
Research and development = Research and development x100
expenditure, as % of net sales expenditure
------------------------------------ -----------------------------------------
Net sales
------------------------------------ -----------------------------------------
------------------------------------ -----
Gearing ratio % = Interest-bearing liabilities - x100
cash and cash equivalents
------------------------------------ -----------------------------------------
Total equity
------------------------------------ -----------------------------------------
------------------------------------ -----
Earnings per share (EPS) = Profit/loss for the financial year
attributable to equity
shareholders
------------------------------------ -----------------------------------------
Average number of outstanding
shares for the financial year
------------------------------------ -----------------------------------------
------------------------------------ -----
Equity per share = Equity attributable to the equity
holders of the parent company
------------------------------------ -----------------------------------------
Adjusted number of shares at the
end of period
------------------------------------ -----------------------------------------
------------------------------------ -----
Dividend per share = Dividend
------------------------------------ -----------------------------------------
Adjusted number of shares at the
end of period
------------------------------------ -----------------------------------------
------------------------------------ -----
Dividend per earnings % = Dividend per share x100
------------------------------------ -----------------------------------------
Earnings per share (EPS)
------------------------------------ -----------------------------------------
------------------------------------ -----
Effective dividend yield % = Dividend per share x100
------------------------------------ -----------------------------------------
Share closing price at end of
period
------------------------------------ -----------------------------------------
------------------------------------ -----
P/E ratio = Share closing price at end of
period
------------------------------------ -----------------------------------------
Earnings per share (EPS)
------------------------------------ -----------------------------------------
--------------------------------------------------------------------------------
Schedule for Comptel's next interim report:
January - September: 21 October 2011
COMPTEL CORPORATION
Board of Directors
Additional information:
Mr Juhani Hintikka, President and CEO, tel. +358 9 700 1131
Mr Mikko Hytönen, CFO, tel. +358 40 758 5801
Mr Samppa Seppälä, Director, IR and Corporate Communications, tel. +358 50 568
0533
Distribution:
NASDAQ OMX Helsinki
Major media
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