2013-07-16 07:00:00 CEST
2013-07-16 07:00:04 CEST
REGULATED INFORMATION
Comptel - Interim report (Q1 and Q3)
Interim Report of Comptel Corporation - 1 January - 30 June 2013
Comptel Corporation Stock Exchange Release 16 July 2013 at
8:00 am
In April - June, net sales grew slightly from the previous year. Profitability
improved and operating result was positive. Order backlog decreased from
previous year.
Key figures for the second quarter:
-- Net sales EUR 20.6 million (Q2 2012: 20.3), growth of 1.8%
-- Operating result EUR 1.3 million (-3.8, -2.5 excluding one-off items), 6.2%
of net sales
-- Earnings per share EUR 0.00 (-0.04)
-- Order backlog EUR 41.9 million (52.0), change -19.4%
Key figures for the first half:
-- Net sales EUR 41.8 million (H1 2012: 40.2), growth of 4.0%
-- Operating result EUR 2.3 million (-15.7, -4.2 excluding one-off items),
5.6% of net sales
-- Earnings per share EUR -0.00 (-0.14)
As stated earlier, Comptel's net sales are estimated to grow from the previous
year in 2013. Operating profit is estimated to increase to 5 - 10 per cent of
net sales. Characteristically a significant part of Comptel's operating profit
and net sales is generated in the second half of the year.
Juhani Hintikka, President and CEO:
”Our operating profit increased significantly during the second quarter of the
year compared to the previous year. Our operating expenses decreased and we
improved the efficiency of our operations. We continued focused investments in
sales to South America, Middle East and new markets in Asia. We are actively
seeking growth in these regions to compensate the challenging market situation
in Europe.
As per our strategy we continued investing especially in Fulfillment product
area and advanced analytics solutions. In the field of analytics we
re-organised the business unit and continued further developing the analytics
solutions. As a market segment analytics is opening up and we have received
excellent market feedback. Closing of the analytics deals is estimated to take
place during the second half of the year.
Our cost base is significantly below the previous year's level as a result of
the efficiency improvement measures and improving profitability is the key
target for 2013.
During the second quarter we secured 6 significant orders, valued over EUR
500,000.”
Business Review for the Second Quarter and the First Half of 2013
In the second quarter, Comptel's net sales increased by 1.8 per cent from the
previous year and were EUR 20.6 million (20.3). In the first half, net sales
grew by 4.0 per cent from the previous year and were EUR 41.8 million (40.2).
Net sales increased mainly as a result of increased support and maintenance
revenue.
In the second quarter, the operating result was EUR 1.3 million (-3.8), which
corresponds to 6.2 per cent of net sales (-18.8). The operating result for 2012
included one-off items amounting to EUR 1.3 million. The cost savings program
carried out during 2012 significantly lowered the operating expenses for the
second quarter compared to the previous year.
The operating result for the first half was EUR 2.3 million (-15.7), which
corresponds to 5.6 per cent of net sales (-39.1). In 2012, the operating result
included a goodwill impairment loss of EUR 10.2 million and one-off items
relating to the efficiency improvement measures amounting to EUR 1.3 million.
Operating expenses excluding one-off items decreased EUR 4.9 million during the
first half of the year compared to the previous year as a result of the costs
savings program materialising as planned.
In the first half of the year, profit before taxes was EUR 1.1 million (-16.7)
and net loss was EUR -0.4 million (-14.8). Earnings per share for the period
under review were EUR -0.00 (-0.14).
Tax expense for the review period was EUR 1.6 million (-1.8), including EUR 0.7
million of withholding taxes. The cumulative amount of outstanding,
non-credited withholding taxes payment since 2004 is EUR 9.9 million.
The Group's order backlog decreased from the previous year and was EUR 41.9
million (52.0) at the end of the period. Maintenance agreements represent EUR
22.8 million (26.5) and other order backlog EUR 19.1 million (25.5) of the
total.
Business areas
Net sales, 4-6 2013 4-6 Change 1-6 2013 1-6 2012 Change 1-12
EUR million 2012 % % 2012
--------------------------------------------------------------------------------
Europe East 3.8 4.7 -19.5 7.7 8.5 -10.5 16.3
--------------------------------------------------------------------------------
Europe West 5.5 4.7 15.7 10.0 9.7 2.2 21.0
--------------------------------------------------------------------------------
Asia Pacific 5.6 6.2 -10.0 11.3 10.8 4.8 21.7
--------------------------------------------------------------------------------
Middle East and 3.7 3.0 24.6 7.2 6.8 6.1 14.5
Africa
--------------------------------------------------------------------------------
Americas 2.1 1.6 26.8 5.7 4.3 31.6 8.9
--------------------------------------------------------------------------------
Total 20.6 20.3 1.8 41.8 40.2 4.0 82.4
--------------------------------------------------------------------------------
Operating result,
EUR million
--------------------------------------------------------------------------------
Europe East 1.9 2.0 -1.9 3.7 3.3 11.6 6.3
--------------------------------------------------------------------------------
Europe West 3.2 2.0 58.1 4.6 4.2 8.6 9.7
--------------------------------------------------------------------------------
Asia Pacific 2.5 3.1 -21.3 5.2 5.1 2.6 9.5
--------------------------------------------------------------------------------
Middle East and 1.0 -0.3 416.4 2.0 0.8 159.5 3.0
Africa
--------------------------------------------------------------------------------
Americas 0.6 0.4 46.3 2.9 1.9 54.6 3.8
--------------------------------------------------------------------------------
Unallocated costs -7.9 -11.0 -28.9 -16.1 -31.0 -48.0 -45.8
--------------------------------------------------------------------------------
Total 1.3 -3.8 133.7 2.3 -15.7 114.8 -13.5
--------------------------------------------------------------------------------
Operating result,
% of net sales
--------------------------------------------------------------------------------
Europe East 51.5 42.3 - 48.5 38.9 - 38.6
--------------------------------------------------------------------------------
Europe West 58.2 42.6 - 46.0 43.3 - 46.3
--------------------------------------------------------------------------------
Asia Pacific 43.9 50.2 - 46.5 47.4 - 43.9
--------------------------------------------------------------------------------
Middle East and 25.9 -10.2 - 28.2 11.5 - 20.4
Africa
--------------------------------------------------------------------------------
Americas 28.0 24.3 - 50.9 43.3 - 42.3
--------------------------------------------------------------------------------
Total 6.2 -18.8 - 5.6 -39.1 - -16.4
--------------------------------------------------------------------------------
In the second quarter, net sales grew in the reporting segments of Europe West,
Middle East and Africa and Americas. In the first half, net sales increased in
all regions except for Europe East. The proportional profitability improved in
all regions but Asia Pacific.
In January - June, Comptel received 12 significant orders (H1 2012: 7): 7
Policy Control & Charging, 2 Fulfillment and 3 Managed Services orders. As
significant orders Comptel reports sold projects and licenses with a value of
EUR 500,000 at the minimum.
Net sales 4-6 2013 4-6 2012 Change 1-6 2013 1-6 2012 Change 1-12
breakdown, % % 2012
EUR million
--------------------------------------------------------------------------------
Licenses 3.2 4.4 -26.1 8.0 7.4 7.7 16.6
--------------------------------------------------------------------------------
Services 8.4 7.8 7.6 15.9 16.7 -4.2 33.2
--------------------------------------------------------------------------------
Maintenance 9.0 8.1 11.3 17.9 16.2 10.8 32.6
--------------------------------------------------------------------------------
Total 20.6 20.3 1.8 41.8 40.2 4.0 82.4
--------------------------------------------------------------------------------
License sales grew and services sales slightly decreased during the first half
of the year. Maintenance sales consist of maintenance and support of the
delivered systems.
Net sales by sales 4-6 2013 4-6 2012 Change 1-6 1-6 Change 1-12 2012
channel, EUR million % 2013 2012 %
--------------------------------------------------------------------------------
Direct sales 16.1 14.8 8.7 31.9 30.6 4.2 62.1
--------------------------------------------------------------------------------
Partner sales 4.5 5.4 -17.3 9.9 9.6 3.1 20.3
--------------------------------------------------------------------------------
Total 20.6 20.3 1.8 41.8 40.2 4.0 82.4
--------------------------------------------------------------------------------
There were no significant changes in the sales distribution between channels.
Financial Position
EUR million 30 June 31 Dec Change 30 June Change
2013 2012 % 2012 %
--------------------------------------------------------------------------------
Statement of financial position 65.0 68.5 -5.0 64.3 1.2
total
--------------------------------------------------------------------------------
Liquid assets 4.5 4.8 -6.1 6.1 -25.5
--------------------------------------------------------------------------------
Trade receivables, gross 25.6 24.1 6.2 26.9 -4.9
--------------------------------------------------------------------------------
Bad debt provision -1.2 -1.3 -4.5 -1.0 25.7
--------------------------------------------------------------------------------
Trade receivables, net 24.4 22.8 6.8 26.0 -6.1
--------------------------------------------------------------------------------
Accrued income 11.1 12.6 -12.1 11.5 -3.9
--------------------------------------------------------------------------------
Deferred income related to 3.2 2.8 12.1 3.3 -4.0
partial debiting
--------------------------------------------------------------------------------
Interest-bearing debt 10.9 8.4 31.0 7.2 51.0
--------------------------------------------------------------------------------
Equity ratio, per cent 48.5 46.8 3.7 47.8 1.4
--------------------------------------------------------------------------------
The statement of financial position total was EUR 65.0 million. Operating cash
flow was EUR 1.2 million (0.3) in the second quarter and EUR 1.3 million (-0.3)
during the first half.
The trade receivables were EUR 24.4 million (26.0) at the end of the period.
The accrued income was EUR 11.1 million (11.5). The deferred income related to
partial debiting was EUR 3.2 million (3.3).
Comptel Corporation withdrew a loan of EUR 1.0 million during the second
quarter and EUR 2.0 million during the first half of the year. Comptel has a
loan facility arrangement amounting to EUR 19 million. It includes a term-loan
of EUR 6.0 million and a revolving credit facility of EUR 13.0 million. The
term-loan of EUR 6.0 million was withdrawn in full and EUR 4.0 million had been
utilised from the revolving credit facility. The loan facilities are valid
until January 2016. The equity ratio was 48.5 per cent (47.8) and the gearing
ratio was 24.4 per cent (4.8).
Research and Development (R&D)
EUR million 4-6 4-6 Change 1-6 1-6 Change 1-12
2013 2012 % 2013 2012 % 2012
--------------------------------------------------------------------------------
Direct R&D expenditure 4.4 4.8 -7.2 8.6 10.0 -13.4 18.6
--------------------------------------------------------------------------------
Capitalisation of R&D -1.7 -1.9 -8.0 -2.8 -3.4 -16.3 -6.2
expenditure according to IAS 38
--------------------------------------------------------------------------------
R&D depreciation and 1.0 0.8 38.7 1.9 1.4 37.7 2.8
impairment charges
--------------------------------------------------------------------------------
R&D expenditure, net 3.7 3.6 2.7 7.7 8.0 -3.3 15.3
--------------------------------------------------------------------------------
Direct R&D expenditure, % of 21.4 23.5 - 20.6 24.8 - 22.5
net sales
--------------------------------------------------------------------------------
Direct R&D expenditure represented 20.6 per cent (24.8) of net sales in the
period under review.
Comptel's R&D expenditure was mainly targeted at the service fulfillment
automation of telecom operators and to the management and real-time analysis of
rapidly increasing data traffic. Comptel seeks global market leadership in
these areas where key business challenges of operators and service providers
will be solved. In addition, the company is developing an integrated software
platform which will enable a cost-efficient and solution-based R&D.
In 2013, the company focuses on developing its offering within the Fulfillment
and advanced analytics product areas. In terms of advanced analytics,
integrating the acquired Xtract advanced analytics into the Comptel software
platform is a priority. With a combined offering including real-time analytics,
Comptel can help operators to improve customer loyalty as well as enable
individually targeted marketing. Two major software releases were launched in
these respective product areas during the review period.
Investments
EUR million 4-6 4-6 Change 1-6 1-6 Change 2012
2013 2012 % 2013 2012 %
--------------------------------------------------------------------------------
Gross investments in property, 0.2 0.4 -47.9 0.3 3.5 -90.3 4.5
plant and equipment and
intangible assets
--------------------------------------------------------------------------------
The investments comprised of devices, software and furnishings. The investments
were funded through liquid assets and cash flow from operations. The
acquisition of Xtract Oy is reflected in the 2012 figures.
Personnel
30 June 30 June Change 31 Dec
2013 2012 % 2012
--------------------------------------------------------------------------------
Number of employees at the end of 681 734 -7.2 679
period
--------------------------------------------------------------------------------
1-6 2013 1-6 2012 Change 1-12 2012
%
--------------------------------------------------------------------------------
Average number of personnel during the 683 703 -2.8 700
period
--------------------------------------------------------------------------------
The number of employees decreased following the cost savings program. In April
- June, personnel expenses were 48.4 per cent of net sales (59.6). In the first
half, the personnel expenses were 51.2 per cent of net sales (56.3).
At the end of the period, 31.3 per cent (32.3) of the personnel were located in
Finland, 26.7 per cent (23.3) in Malaysia, 10.9 per cent (9.7) in Bulgaria, 7.9
per cent (6.9) in the United Arab Emirates, 6.3 per cent (7.6) in the United
Kingdom, 4.1 per cent (3.1) in India, 2.8 per cent (4.8) in Norway, and 10.0
per cent (12.3) in other countries where Comptel operates.
Comptel share
Closing share price of the period was EUR 0.45 (0.41). Comptel's market value
at the end of the period was EUR 48.1 million (43.8).
Comptel share 4-6 2013 4-6 2012 Change 1-6 2013 1-6 2012 Change 1-12
% % 2012
--------------------------------------------------------------------------------
Shares traded, 3.4 4.9 -29.8 7.7 15.8 -51.2 26.7
million
--------------------------------------------------------------------------------
Shares traded, EUR 1.5 2.6 -41.5 3.2 9.1 -64.4 13.4
million
--------------------------------------------------------------------------------
Highest price, EUR 0.51 0.59 -14.0 0.51 0.63 -19.0 0.63
--------------------------------------------------------------------------------
Lowest price, EUR 0.39 0.37 5.0 0.38 0.37 3.0 0.37
--------------------------------------------------------------------------------
Of Comptel's outstanding shares, 7.5 per cent (5.4) were nominee registered or
held by foreign shareholders at the end of the period.
During the period, Comptel Corporation allotted gratuitously 164,203 shares to
the members of the Board of Directors as part of their annual compensation and
50,000 shares to the President and CEO of the company according to the terms
and conditions of the 2011 share-based incentive plan.
The company held 161,219 of its own shares at the end of the period, which is
0.15 per cent of the total number of its shares. The total counter-book value
of the shares held by the company was EUR 3,224.
No share options were distributed during the review period.
Corporate Governance
The Annual General Meeting (AGM), held on 20 March 2013, re-elected Mr Pertti
Ervi, Mr Hannu Vaajoensuu, Mr Petteri Walldén, Ms Eriikka Söderström and Mr
Antti Vasara as members of the Board of Directors. In its meeting held after
the AGM, the Board of Directors elected Mr Pertti Ervi as chairman and Mr Hannu
Vaajoensuu as vice chairman. The Board decided not to set up committees.
The AGM appointed Ernst & Young Oy as the company's auditor. Mr Heikki Ilkka is
acting as the principal auditor.
The AGM resolved that no dividend payment will be made for 2012.
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 or conveying of the
company's own shares up to a maximum number of 10,700,000 shares. The
authorisations are valid until 30 June 2014. However, the authorisation to
implement the company's share-based incentive programs is valid until five
years from the AGM resolution.
A separate stock exchange release about the authorisations given and other
decisions made by the Annual General Meeting was published on 20 March 2013.
Events after the Reporting Period
There were no significant events after the reporting period.
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 to 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's business consists of deliveries of large productised IT system and
the value of a single project may be several million euros. Therefore, the risk
or credit risk associated with a single project or an individual customer may
be significant. Furthermore, some of Comptel's customers operate in countries
which are going through political or economic instability which in part may
increase credit risk.
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
Malaysian Ringgit 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. However, the process between the
states is very slow and the timing of a change is hard to forecast. The
interpretation of tax treaties may result in different views between the
countries in question. This could mean that the double taxation will prevail.
The risks and uncertainties of Comptel are described more in detail in the
company's financial statements and the Board of Directors' report for 2012.
Outlook
As stated earlier, Comptel's net sales are estimated to grow from the previous
year in 2013. Operating profit is estimated to increase to 5 - 10 per cent of
net sales.
Characteristically a significant part of Comptel's operating profit and net
sales is generated in the second half of the year.
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 2012 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 (EUR 1,000) 30 Jun 30 Jun 30 Jun 30 Jun
2013 2012 2013 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 41,803 40,186 20,632 20,260
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other operating income 4 1 3 0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Materials and services -2,126 -3,258 -1,012 -1,637
--------------------------------------------------------------------------------
Employee benefits -21,398 -22,608 -9,996 -12,067
--------------------------------------------------------------------------------
Depreciation, amortisation and impairment -2,715 -12,280 -1,460 -1,152
charges
--------------------------------------------------------------------------------
Other operating expenses -13,241 -17,755 -6,883 -9,217
--------------------------------------------------------------------------------
-39,480 -55,901 -19,351 -24,073
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit/loss 2,327 -15,714 1,285 -3,812
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income 200 714 -3 277
--------------------------------------------------------------------------------
Financial expenses -1,384 -1,668 -229 -754
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss before income taxes 1,142 -16,668 1,052 -4,289
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -1,579 1,839 -876 -255
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period -437 -14,829 176 -4,544
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Translation differences -319 118 -219 115
--------------------------------------------------------------------------------
Cash flow hedges - 503 - -239
--------------------------------------------------------------------------------
Income tax relating to components of other - -123 - 59
comprehensive income
--------------------------------------------------------------------------------
Total other comprehensive income -319 498 -219 -66
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income for the period -755 -14,331 -42 -4,610
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company -437 -14,829 176 -4,544
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company -755 -14,331 -42 -4,610
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders of the parent company:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR -0.00 -0.14 0.00 -0.04
--------------------------------------------------------------------------------
Earnings per share, diluted, EUR -0.00 -0.14 0.00 -0.04
--------------------------------------------------------------------------------
Consolidated Statement of Financial Position (EUR 30 Jun 2013 31 Dec 2012
1,000)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Goodwill 2,646 2,646
--------------------------------------------------------------------------------
Other intangible assets 13,898 13,350
--------------------------------------------------------------------------------
Tangible assets 2,003 1,518
--------------------------------------------------------------------------------
Investments in associates 1,076 1,076
--------------------------------------------------------------------------------
Available-for sale financial assets 87 87
--------------------------------------------------------------------------------
Deferred tax assets 4,285 3,804
--------------------------------------------------------------------------------
Other non-current receivables 494 493
--------------------------------------------------------------------------------
24,489 22,974
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Trade and other current receivables 35,998 40,660
--------------------------------------------------------------------------------
Cash and cash equivalents 4,523 4,817
--------------------------------------------------------------------------------
40,521 45,476
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 65,010 68,451
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity and liabilities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of the parent
company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Share capital 2,141 2,141
--------------------------------------------------------------------------------
Fund of invested non-restricted equity 243 243
--------------------------------------------------------------------------------
Translation differences -955 -636
--------------------------------------------------------------------------------
Retained earnings 24,902 25,208
--------------------------------------------------------------------------------
Total equity 26,332 26,956
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 3,426 3,302
--------------------------------------------------------------------------------
Provisions 370 787
--------------------------------------------------------------------------------
Non-current financial liabilities 4,669 5,275
--------------------------------------------------------------------------------
8,465 9,364
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Provisions 1,401 1,511
--------------------------------------------------------------------------------
Current financial liabilities 6,279 3,082
--------------------------------------------------------------------------------
Trade and other current liabilities 22,534 27,537
--------------------------------------------------------------------------------
30,213 32,130
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 38,678 41,494
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 65,010 68,451
--------------------------------------------------------------------------------
Consolidated Statement of Cash Flows 1 Jan - 30 1 Jan - 30
(EUR 1,000) Jun 2013 Jun 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period -437 -14,829
--------------------------------------------------------------------------------
Adjustments:
--------------------------------------------------------------------------------
Non-cash transactions or items that are not part of 3,680 13,358
cash flows from operating activities
--------------------------------------------------------------------------------
Interest and other financial expenses 501 127
--------------------------------------------------------------------------------
Interest income -8 -14
--------------------------------------------------------------------------------
Income taxes 1,579 -1,839
--------------------------------------------------------------------------------
Change in working capital:
--------------------------------------------------------------------------------
Change in trade and other current receivables 4,351 1,291
--------------------------------------------------------------------------------
Change in trade and other current liabilities -5,711 2,892
--------------------------------------------------------------------------------
Change in provisions -527 716
--------------------------------------------------------------------------------
Interest and other financial expenses paid -151 -121
--------------------------------------------------------------------------------
Interest received 4 10
--------------------------------------------------------------------------------
Income taxes paid and tax returns received -2,000 -1,918
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash from operating activities 1,281 -326
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Acquisition of subsidiaries, net of cash acquired - -1,812
--------------------------------------------------------------------------------
Investments in tangible assets -332 -305
--------------------------------------------------------------------------------
Investments in intangible assets -10 -331
--------------------------------------------------------------------------------
Investments in development projects -2,817 -3,364
--------------------------------------------------------------------------------
Change in other non-current receivables -13 -81
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in investing activities -3,173 -5,892
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from financing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dividends paid - -3,207
--------------------------------------------------------------------------------
Acquisition of Corporation's own shares -88 -
--------------------------------------------------------------------------------
Proceeds from borrowings 9,000 12,000
--------------------------------------------------------------------------------
Repayment of borrowings -7,028 -6,020
--------------------------------------------------------------------------------
Lease payments -60 -19
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in financing activities 1,824 2,754
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents -67 -3,465
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the 4,817 9,401
period
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 4,523 6,074
--------------------------------------------------------------------------------
Change -294 -3,327
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Effects of changes in foreign exchange rates -227 137
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
--------------------------------------------------------------------------------
-
Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-
EUR 1,000 Share Other Translation Fair Retained Total
capital reserve differences value earnings
s reserve
--------------------------------------------------------------------------------
Equity at 2,141 178 -682 -589 40,758 41,805
31 Dec 2011
--------------------------------------------------------------------------------
Dividends -3,207 -3,207
--------------------------------------------------------------------------------
Transfer of 66 66
treasury shares
--------------------------------------------------------------------------------
Share-based 186 186
compensation
--------------------------------------------------------------------------------
Total comprehensive 118 380 -14,829 -14,331
income for the
period
--------------------------------------------------------------------------------
Equity at 2,141 243 -564 -210 22,908 24,518
30 Jun 2012
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
--------------------------------------------------------------------------------
-
Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-
EUR 1,000 Share Other Translation Retained Total
capital reserves differences earnings
--------------------------------------------------------------------------------
Equity at 2,141 243 -636 25,207 26,956
31 Dec 2012
--------------------------------------------------------------------------------
Acquisition of -88 -88
Corporation's own
shares
--------------------------------------------------------------------------------
Transfer of treasury 66 66
shares
--------------------------------------------------------------------------------
Share-based 153 153
compensation
--------------------------------------------------------------------------------
Total comprehensive -319 -437 -755
income for the period
--------------------------------------------------------------------------------
Equity at 2,141 243 -955 24,902 26,332
30 Jun 2013
--------------------------------------------------------------------------------
Notes
1. Application of new or amended standards and interpretations
On 1 January 2013 the Group adopted the following new and amended standards and
interpretations endorsed by the EU and that are applicable to Comptel:
Amendments to IAS 1 Presentation of Financial Statements. The major change is
the requirement to group items of other comprehensive income as to whether or
not they will be reclassified subsequently to profit or loss when specific
conditions are met.
The other new or amended standards in force as of 1 January 2013 did not have
an impact on the accounting policies and methods of computation.
2. Segment information
Net sales by segment
EUR 1,000 1 Jan - 1 Jan - 1 Apr - 1 Apr -
30 Jun 2013 30 Jun 2012 30 Jun 2013 30 Jun 2012
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Europe East 7,652 8,549 3,772 4,684
--------------------------------------------------------------------------
Europe West 9,958 9,741 5,483 4,740
--------------------------------------------------------------------------
Asia-Pacific 11,274 10,760 5,624 6,249
--------------------------------------------------------------------------
Middle East and Africa 7,207 6,794 3,681 2,953
--------------------------------------------------------------------------
Americas 5,712 4,342 2,072 1,634
--------------------------------------------------------------------------
Group total 41,803 40,186 20,632 20,260
--------------------------------------------------------------------------
Operating profit/loss by segment
EUR 1,000 1 Jan - 1 Jan - 1 Apr - 1 Apr -
30 Jun 30 Jun 30 Jun 30 Jun
2013 2012 2013 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Europe East 3,711 3,326 1,944 1,981
--------------------------------------------------------------------------------
Europe West 4,580 4,219 3,193 2,020
--------------------------------------------------------------------------------
Asia-Pacific 5,238 5,106 2,468 3,137
--------------------------------------------------------------------------------
Middle East and Africa 2,031 783 953 -301
--------------------------------------------------------------------------------
Americas 2,906 1,879 580 396
--------------------------------------------------------------------------------
Group unallocated expenses -16,140 -31,027 -7,854 -11,045
--------------------------------------------------------------------------------
Group operating profit/loss 2,327 -15,714 1,285 -3,812
total
--------------------------------------------------------------------------------
Financial income and expenses -1,184 -954 -232 -477
--------------------------------------------------------------------------------
Group profit/loss before income 1,142 -16,668 1,052 -4,289
taxes
--------------------------------------------------------------------------------
3. Business combinations
On 9 February 2012, Comptel Corporation acquired all shares of Xtract Oy, a
Finnish software company specialising in analytics.
The total consideration (enterprise value) was EUR 3,100 thousand. The actual
purchase price was EUR 2,075 thousand.
4. Impairment loss on goodwill
Comptel changed the allocation method of goodwill during the first quarter of
the year 2012. Due to the change, an impairment testing was performed at the
new cash generating unit level which was lower level compared to the one used
during financial year 2011.
As a result of impairment testing Comptel recorded an impairment loss of EUR
10,179 thousand in the first quarter result in 2012.
5. Income tax
Income tax expense according to the statement of comprehensive income for the
period was EUR 1,579 thousand (EUR 1,839 thousand positive in 2012). A change
of EUR 2,494 thousand in deferred tax liabilities was booked in connection with
the impairment of goodwill in the first quarter of 2012.
In 2006, the Board of 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 application process to prevent Comptel's double taxation is still pending
with the Ministry of Finance in Finland. However, the process between the
states is very slow and the timing of a change is hard to forecast. The
interpretation of tax treaties may result in different views between the
countries in question. This could mean that the double taxation will prevail.
According to the Board of Adjustment's decision currently in force, Comptel
Corporation has expensed taxes withheld at source amounting to EUR 692 thousand
in January - June (EUR 961 thousand).
6. Tangible assets
EUR 1,000 1 Jan - 30 Jun 2013 1 Jan - 30 Jun 2012
---------------------------------------------------
---------------------------------------------------
Additions 332 305
---------------------------------------------------
Disposals -30 -6
---------------------------------------------------
7. Related party transactions
The Comptel Group have 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 2013 1 Jan - 30 Jun 2012
----------------------------------------------------------------
----------------------------------------------------------------
Associate
----------------------------------------------------------------
Other operating income 3 1
----------------------------------------------------------------
Interest income 4 4
----------------------------------------------------------------
EUR 1,000 30 Jun 2013 31 Dec 2012
-------------------------------------------------
-------------------------------------------------
Associate
-------------------------------------------------
Non-current receivables 102 98
-------------------------------------------------
Trade receivables - 1
-------------------------------------------------
Remuneration to key management
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
2013 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Salaries and other short-term employee 738 1,145
benefits
--------------------------------------------------------------------------------
Share-based payments 167 106
--------------------------------------------------------------------------------
Total 905 1,251
--------------------------------------------------------------------------------
Guarantees and other commitments
EUR 1,000 30 Jun 2013 31 Dec 2012
------------------------------------
------------------------------------
Guarantees 69 70
------------------------------------
8. Commitments
Minimum lease payments on non-cancellable office facilities and other operating
leases are payable as follows:
EUR 1,000 30 Jun 2013 31 Dec 2012
----------------------------------------------------
----------------------------------------------------
Less than one year 2,270 2,934
----------------------------------------------------
Between one and five years 4,729 6,087
----------------------------------------------------
Total 6,999 9,021
----------------------------------------------------
The group had no material capital commitments for the purchase of tangible
assets at 31 June 2013 and 30 June 2012.
9. Contingent liabilities
EUR 1,000 30 Jun 2013 31 Dec 2012
---------------------------------------------
---------------------------------------------
Bank guarantees 2,241 2,969
---------------------------------------------
Corporate mortgages 200 200
---------------------------------------------
EUR 1,000 30 Jun 2013 31 Dec 2012
--------------------------------------------------------------------
--------------------------------------------------------------------
Contingent liabilities on behalf of others
--------------------------------------------------------------------
Guarantees 118 123
--------------------------------------------------------------------
10. Key figures
Financial summary 1 Jan - 1 Jan - 1 Jan -
30 Jun 30 Jun 31 Dec
2013 2012 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR 1,000 41,803 40,186 82,428
--------------------------------------------------------------------------------
Net sales, change % 4.0 9.1 7.4
--------------------------------------------------------------------------------
Operating profit/loss, EUR 1,000 2,327 -15,714 -13,517
--------------------------------------------------------------------------------
Operating profit/loss, change % 114.8 -1,428.5 -213.6
--------------------------------------------------------------------------------
Operating profit/loss, as % of net sales 5.6 -39.1 -16.4
--------------------------------------------------------------------------------
Profit/loss before taxes, EUR 1,000 1,142 -16,668 -13,955
--------------------------------------------------------------------------------
Profit/loss before taxes, as % of net sales 2.7 -41.5 -16.9
--------------------------------------------------------------------------------
Return on equity, % - - -37.2
--------------------------------------------------------------------------------
Return on investment, % - - -36.3
--------------------------------------------------------------------------------
Equity ratio, % 48.5 47.8 46.8
--------------------------------------------------------------------------------
Gross investments in tangible and intangible 343 3,536 4,484
assets, EUR 1,0001)
--------------------------------------------------------------------------------
Gross investments in tangible and intangible 0.8 8.8 5.4
assets, as % of net sales
--------------------------------------------------------------------------------
Capitalisations according to IAS 38 to intangible 2,817 3,364 6,170
assets, EUR 1,000
--------------------------------------------------------------------------------
Research and development expenditure, EUR 1,000 8,614 9,952 18,581
--------------------------------------------------------------------------------
Research and development expenditure, 20.6 24.8 22.5
as % of net sales
--------------------------------------------------------------------------------
Order backlog, EUR 1,000 41,883 51,957 48,368
--------------------------------------------------------------------------------
Average number of employees during the period 683 703 700
--------------------------------------------------------------------------------
Interest-bearing net liabilities, EUR 1,000 6,425 1,174 3,541
--------------------------------------------------------------------------------
Gearing ratio, % 24.4 4.8 13.1
--------------------------------------------------------------------------------
1) Includes the acquisition of Xtract in 2012. The gross capital investments
excluding the acquisition amounted to EUR 1,577 thousand, which is 1.9 per cent
of net sales. In January - June gross investments excluding the acquisition
were EUR 630 thousand, which amount to 1.6 per cent of net sales. The figure
does not include investments in development projects.
Per share data 1 Jan - 1 Jan - 1 Jan -
30 Jun 2013 30 Jun 2012 31 Dec 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share (EPS), EUR -0.00 -0.14 -0.12
--------------------------------------------------------------------------------
EPS diluted, EUR -0.00 -0.14 -0.12
--------------------------------------------------------------------------------
Equity per share, EUR 0.25 0.23 0.25
--------------------------------------------------------------------------------
Dividend per share, EUR - - 0.00
--------------------------------------------------------------------------------
Dividend per earnings, % - - -
--------------------------------------------------------------------------------
Effective dividend yield, % - - -
--------------------------------------------------------------------------------
P/E ratio - - -3.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Adjusted number of shares at the end of 107,054,810 107,054,810 107,054,810
the period
--------------------------------------------------------------------------------
of which the number of treasury shares 161,219 156,499 161,219
--------------------------------------------------------------------------------
Outstanding shares 106,893,591 106,898,311 106,893,591
--------------------------------------------------------------------------------
Adjusted average number of shares during 106,893,591 106,831,715 106,863,518
the period
--------------------------------------------------------------------------------
Average number of shares, dilution 106,893,591 106,831,715 107,650,327
included
--------------------------------------------------------------------------------
11. 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 in 2013:
January-September 16 October 2013
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
Distribution:
NASDAQ OMX Helsinki
Major media
www.comptel.com
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