2007-07-31 07:30:47 CEST
2007-07-31 07:30:47 CEST
REGULATED INFORMATION
Elisa - Quarterly report
ELISA S INTERIM REPORT FOR APRIL-JUNE 2007
- Revenue increased by 3 per cent to EUR 393 million (382)
- EBITDA improved 34 per cent to EUR 127 million (95) and profit
before taxes grew 91 per cent to EUR 67 million (35)
- Excluding non-recurring items, EBITDA increased by 16 per cent to
EUR 116 million (100) and profit before taxes grew 40 per cent to EUR
56 million (40)
- Earnings per share improved 94 per cent to EUR 0.31 (0.16)
- Revenue per subscription (ARPU) in the mobile network improved from
the previous quarter's EUR 29.7 to EUR 30.2. The churn of
subscriptions decreased and was 11.4 per cent (14.2 in the previous
quarter).
- The number of mobile subscriptions continued to increase during the
second quarter, due in particular to the new 3G service bundles
- The number of broadband subscriptions remained at the previous
quarter's level
Key indicators:
+-----------------------------------------------------------+
| Income statement | 4-6/2007 | 4-6/2006 | 1-12/2006 |
| EUR million | | | |
|-------------------------+----------+----------+-----------|
| Revenue | 393 | 382 | 1,518 |
|-------------------------+----------+----------+-----------|
| EBITDA | 127¹) | 95 ²) | 434 3) |
|-------------------------+----------+----------+-----------|
| EBIT | 77 | 39 | 225 |
|-------------------------+----------+----------+-----------|
| Profit before taxes | 67 | 35 | 212 |
|-------------------------+----------+----------+-----------|
| Earnings per share, EUR | 0.31 | 0.16 | 0.97 |
|-------------------------+----------+----------+-----------|
| Capital expenditures | 49 | 54 | 207 |
+-----------------------------------------------------------+
EBITDA excluding non-recurring items: 1) EUR 116 million (profit on
the sale of properties of EUR 11 million), 2) EUR 100 million, 3) EUR
445 million
Figures describing the financial position and cash flow:
+---------------------------------------------------------------+
| Financial position | 30 Jun 2007 | 30 Jun 2006 | 31 Dec 2006 |
| EUR million | | | |
|---------------------+-------------+-------------+-------------|
| Net debt | 651 | 381 | 377 |
|---------------------+-------------+-------------+-------------|
| Net debt / EBITDA * | 1.4 | 1.0 | 0.9 |
|---------------------+-------------+-------------+-------------|
| Gearing ratio, % | 59.7 | 29.5 | 28.7 |
|---------------------+-------------+-------------+-------------|
| Equity ratio, % | 51.9 | 64.1 | 63.1 |
|---------------------+-------------+-------------+-------------|
| | | | |
| Cash flow statement | 4-6/2007 | 4-6/2006 | 1-12/2006 |
| Cash flow after | | | |
| investments | 37 | 29 | 118 |
+---------------------------------------------------------------+
* Adapted to annual figures on the basis of the second quarter:
(interest-bearing debt - liquid assets) / (adjusted EBITDA for the
period x 4)
CEO Veli-Matti Mattila:"Strong growth in the 3G market
Strong growth in the number of third generation mobile communications
customers and the use of services continued. The 3G market grew by
more than 100,000 customers during the second quarter. 3G customers
continue to use their mobile phones for new services, such as Web
browsing and e-mail, considerably more than other customers.
Elisa's share of the 3G market is about one half. We are continuing
service development, for example by introducing a very affordable
mobile broadband to our customers today. Our 3G network is the most
comprehensive in Finland and we are determinedly expanding it further
to respond to the increasing demand. The number of cities and towns
covered by Elisa's 3G network will be about 120 by the end of the
year. At that time our 3G network will cover about 70 per cent of the
Finnish population.
Succeeding in the service competition within the telecom industry
will continue to require even better customer focus. At Elisa, we are
committed to improving our customer service through the development
of our operations and IT systems, among other things.
Elisa introduced a new billing and CRM system, which unfortunately
weakened our customer service quality and slowed second quarter sales
of broadband and mobile communications. I am unsatisfied with this
launch. Great improvement has already been achieved and we are
working determinedly to improve our service level further.
During the second quarter, the development was fairly positive in
other respects. Revenue per subscription in the mobile network
increased and the churn rate decreased. In terms of broadband
subscriptions, we focused on maintaining our clear market leadership.
The second quarter was also positive in financial terms. Our revenues
grew, and comparable EBITDA and profit before taxes improved clearly
compared with the corresponding period last year. We expect the
positive development to continue during the second half of the year
as well."
ELISA CORPORATION
Mr. Vesa Sahivirta
Director, IR and Financial Communications
Further information:
Mr Veli-Matti Mattila, President and CEO, tel. +358 10 262 2635
Mr Jari Kinnunen, CFO, tel. +358 10 262 9510
Mr Vesa Sahivirta, Director, IR and Financial Communications, tel.
+358 10 262 3036
Distribution:
Helsinki Stock Exchange
Principal media
INTERIM REPORT APRIL-JUNE 2007
The interim report has been prepared in accordance with the IAS 34
standard, "Interim reports". The information presented in this
interim report is unaudited.
Market situation
The base of mobile communications subscriptions has evolved
favourably in Finland with 3G subscriptions comprising a significant
proportion of new subscriptions. The use of new services made
available through 3G subscriptions has also increased.
The fixed network business continued its earlier trend: the number of
broadband subscriptions continued to grow compared with last year,
even though more slowly, and the number and use of traditional
subscriptions decreased.
Revenue
+---------------------------------------------------------+
| EUR million | 4-6/2007 | 4-6/2006 | Change, % |
|-----------------------+----------+----------+-----------|
| Mobile communications | 246 | 239 | 3 |
|-----------------------+----------+----------+-----------|
| Fixed network | 160 | 166 | -4 |
|-----------------------+----------+----------+-----------|
| | | | |
|-----------------------+----------+----------+-----------|
| Inter-segment sales | -13 | -23 | -43 |
|-----------------------+----------+----------+-----------|
| Total | 393 | 382 | 3 |
+---------------------------------------------------------+
Elisa's revenue for April-June was up 3 per cent on last year, due to
the increase in the use of mobile communication services, among other
things.
Performance
+---------------------------------------------------------+
| EUR million | 4-6/2007 | 4-6/2006 | Change, % |
|-----------------------+----------+----------+-----------|
| Mobile communications | | | |
| EBITDA | 72 | 57 ²) | 26 |
| EBITDA, % | 29 | 24 | |
| EBIT | 46 | 29 ²) | 59 |
|-----------------------+----------+----------+-----------|
| Fixed network | | | |
| EBITDA | 56 1) | 39 ²) | 44 |
| EBITDA, % | 35 | 24 | |
| EBIT | 33 1) | 11 ²) | 200 |
|-----------------------+----------+----------+-----------|
| Corporate functions | | | |
| EBITDA | -2 | -1 | |
| EBIT | -2 | -2 | |
|-----------------------+----------+----------+-----------|
| Group, total | | | |
| EBITDA | 127 1) | 95 ²) | 34 |
| EBITDA, % | 32 | 25 | |
| EBIT | 77 1) | 39 ²) | 97 |
+---------------------------------------------------------+
1) Figures excluding non-recurring items: fixed network: EBITDA EUR
45 million and EBIT EUR 22 million (sales profits from sale of
properties of EUR 11 million); the Group: EBITDA EUR 116 million and
EBIT EUR 67 million.
2) Figures excluding non-recurring items: mobile communications:
EBITDA EUR 59 million and EBIT EUR 31 million; fixed network: EBITDA
EUR 42 million and EBIT EUR 14 million; the Group: EBITDA EUR 100
million and EBIT EUR 44 million
Elisa's EBITDA excluding non-recurring items showed growth of 16 per
cent on the corresponding period in 2006. The EBITDA improvement was
attributable to factors such as new services in the mobile
communication business, as well as efficiency measures. The improved
profitability of the fixed network was affected by changes in
broadband subscription prices, the increased number of subscriptions,
and improved cost efficiency. Compared with the previous quarter,
profitability of the fixed network business weakened mainly due to
the non-recurring expenses associated with the introduction of the
new IT systems.
The Group's other financial income and expenses rose to EUR -11
million (-4), because an unrealised financial expense of EUR 5
million on the change in the fair value of an interest-rate
derivative was posted for the second quarter. Cash flow was not
affected. Income taxes in the period under review amounted to EUR -18
million (-7).
The Group's April-June result after taxes amounted to EUR 49 million
(28). The Group's earnings per share (EPS) amounted to EUR 0.31
(0.16). At the end of June, shareholders' equity per share stood at
EUR 6.86 (EUR 8.07 at the end of 2006).
Changes in corporate structure
On 24 May 2007, a merger plan was signed by the Boards of Directors
of Elisa and Lounet Oy, according to which Lounet will be merged with
Elisa. On 5 July 2007, Lounet's Extraordinary Meeting of Shareholders
approved the merger. The merger will take effect once the execution
of the merger is registered in the trade register, on estimate on 30
September 2007.
Mobile communication business
+-----------------------------------------------------------------+
| Number of subscriptions | 30.6.2007 | 30.6.2006 | 31.12.2006 |
|----------------------------+-----------+-----------+------------|
| Total number of | | | |
| subscriptions | 2,564,800 | 2,343,900 | 2,488,900 |
|----------------------------+-----------+-----------+------------|
| - Network operator in | | | |
| Finland | 2,257,300 | 2,060,400 | 2,194,400 |
|----------------------------+-----------+-----------+------------|
| - Subscriptions in Estonia | 307,500 | 283,500 | 294,500 |
+-----------------------------------------------------------------+
+-------------------------------------------------------------------+
| User-specific indicators 1) | 4-6/2007 | 4-6/2006 | 1-12/2006 |
|---------------------------------+----------+----------+-----------|
| Revenue/subscription (ARPU), | | | |
| EUR | 30.2 | 31.3 | 30.2 |
|---------------------------------+----------+----------+-----------|
| Churn, % | 11.4 | 12.9 | 13.8 |
|---------------------------------+----------+----------+-----------|
| Outgoing calls, | | | |
| min/subscription/month | 222 | 204 | 203 |
|---------------------------------+----------+----------+-----------|
| SMS, msg/subscription/month | 51 | 49 | 50 |
|---------------------------------+----------+----------+-----------|
| Value-added services/revenue, % | 19 | 17 | 17 |
+-------------------------------------------------------------------+
+-------------------------------------------------------------------+
| Indicators on network use 2) | 4-6/2007 | 4-6/2006 | 1-12/2006 |
|---------------------------------+----------+----------+-----------|
| Outgoing calls, million minutes | 1,425 | 1,207 | 4,888 |
|---------------------------------+----------+----------+-----------|
| SMS, million msg | 372 | 288 | 1,193 |
+-------------------------------------------------------------------+
1) Elisa's service operators in Finland (excluding prepaid)
2) Elisa's network operator in Finland
Elisa's network operator in Finland had 2,257,300 subscriptions in
June, representing an increase of 10 per cent on the corresponding
period last year. The second-quarter increase was approximately
22,000 subscriptions, contributed to by the good success of the 3G
service bundles and prepaids.
The call minutes per subscription of Elisa's own service operators
rose by approximately 9 per cent and the number of SMS messages
increased by approximately 4 per cent on the corresponding period
last year. Due to the increase in the number of subscriptions of
Elisa's service operators, the total call minutes in the network grew
by 18 per cent and the number of SMS messages increased by 29 per
cent.
Mobile communication's revenues grew three per cent despite reduced
interconnections traffic fees and equipment sales. Revenue per
subscription (ARPU) decreased by 4 per cent on the comparison period,
in part as a result of the lower interconnection traffic prices that
took effect at the beginning of the year. Compared with the previous
quarter, revenue per subscription was up 2 per cent, from EUR 29.7 to
EUR 30.2.
The number of cities and towns covered by Elisa's 3G network will
reach about one and a half times the current figure by year end when
the 3G network will be expanded to more than 30 new locations. At
that time Elisa's 3G network will cover more than 70 per cent of the
Finnish population, in a total of 120 cities and towns.
Saunalahti was the first company in Finland to start selling Mobile
VoIP subscriptions. Saunalahti's service is based on standardised UMA
technology. UMA (Unlicensed Mobile Access) combines the GSM network
and WLAN networks into a seamless whole, enabling subscription users
to make calls even without charge.
The mobile communication business of Elisa's Estonian subsidiary
continued to grow in terms of revenue as well as the number of
subscriptions. Revenue growth was 14 per cent, with revenue amounting
to EUR 29.4 million (25.8) and the number of customers to 307,500
(283,500). Profitability improved as well: EBITDA increased by 10 per
cent to EUR 9.1 million (8.3) and EBIT by 8 per cent to EUR 6.4
million (5.9).
Fixed network business
+-------------------------------------------------------------------+
| Number of subscriptions | 30 Jun 2007 | 30 Jun 2006 | 31 Dec 2006 |
|-------------------------+-------------+-------------+-------------|
| Broadband subscriptions | 513,900 | 472,500 | 496,300 |
|-------------------------+-------------+-------------+-------------|
| ISDN channels | 70,900 | 113,300 | 76,200 |
|-------------------------+-------------+-------------+-------------|
| Cable TV subscriptions | 231,200 | 220,300 | 226,000 |
|-------------------------+-------------+-------------+-------------|
| Analogue and other | | | |
| subscriptions | 499,400 | 541,000 | 521,100 |
|-------------------------+-------------+-------------+-------------|
| Subscriptions, total | 1,315,400 | 1,347,100 | 1,319,600 |
+-------------------------------------------------------------------+
The number of broadband subscriptions remained at the previous
quarter's level, showing an increase of 9 per cent on the previous
year.
The number of traditional subscriptions continued to decrease
steadily as voice calls shifted to the mobile communication network
and data transfers to broadband subscriptions.
Saunalahti introduced a new type of digital TV set-top box. During
normal television viewing, the SaunaVisio set-top box operates as any
digital TV set in the antenna network, but when programmes are
recorded, they are not recorded in the set-top box's own memory but
rather on a virtual disc in the network. Users may record up to five
terabytes (5,000 GB) worth of programmes.
Elisa's Extraordinary Meeting of Shareholders
In accordance with the proposal of the Board of Directors, Elisa
Corporation's Extraordinary Meeting resolved to decrease the share
premium fund recorded in the balance sheet on 31 December 2006 by EUR
530,412,283.69 by moving all funds in the share premium fund recorded
in the balance sheet on 31 December 2006 to the invested free equity
fund.
In addition, the Extraordinary Meeting authorised the Board of
Directors to pass a resolution concerning the payment of additional
dividends to a maximum amount of EUR 165,000,000 in addition to the
resolution to pay dividends made by the Annual General Meeting of
Shareholders on 19 March 2007. The dividend may be paid in one or
several instalments. The Board of Directors has the right to decide
on other matters related to the payment of dividends. The
authorisation is valid until the beginning of the following Annual
General Meeting of Shareholders.
Personnel
During April-June, the average number of personnel at Elisa was 3,357
(an average of 4,264 in 2006).
Personnel by segment
+------------------------------------------------------------------+
| | 30 Jun 2007 | 30 Jun 2006 | 31 Dec 2006 |
|-----------------------+--------------+-------------+-------------|
| Mobile communications | 1,345 | 1,434 | 1,329 |
|-----------------------+--------------+-------------+-------------|
| Fixed network | 1,980 | 2,741 | 2,224 |
|-----------------------+--------------+-------------+-------------|
| Corporate functions | 39 | 41 | 38 |
|-----------------------+--------------+-------------+-------------|
| Total | 3,364 | 4,216 | 3,592 |
+------------------------------------------------------------------+
Investments
+-------------------------------------------------------------------+
| EUR million | 4-6/2007 | 4-6/2006 | 1-12/2006 |
|---------------------------------+----------+----------+-----------|
| Capital expenditures | 49 | 54 | 207 |
| - mobile communication business | 22 | 22 | 78 |
| - GSM leasing liability | | | |
| buy-backs | 0 | 0 | 2 |
| - fixed network business | 27 | 32 | 127 |
| - others | 0 | 0 | 0 |
| Shares | 0 | 1 | 10 |
| Total | 49 | 55 | 218 |
+-------------------------------------------------------------------+
The primary investment targets were the expansion of the 3G network,
the renewal of the network management system, increases in the speed
and capacity of the broadband network as well as the new invoicing
and customer management system, the first phase of which was
introduced during the period under review. This important IT project
will improve cost efficiency and quality through development of the
invoicing and customer management processes.
Financial position
The capital structure has been developed according to the set goals.
During the second quarter, Elisa acquired 4 million treasury shares
at a price of EUR 86 million.
Elisa's financial position and liquidity remained good during the
quarter. The group's April-June cash flow after investments amounted
to EUR 37 million (29). The tax share on dividends of EUR 22 million
and an advance tax of EUR 29 million according to the realised profit
for 2006 were paid in April.
Financial key indicators
+----------------------------------------------------------------+
| EUR million | 30 Jun 2007 | 30 Jun 2006 | 31 Dec 2006 |
|---------------------+--------------+-------------+-------------|
| Net debt | 651 | 381 | 377 |
|---------------------+--------------+-------------+-------------|
| Net debt / EBITDA * | 1.4 | 1.0 | 0.9 |
|---------------------+--------------+-------------+-------------|
| Gearing, % | 59.7 | 29.5 | 28.7 |
|---------------------+--------------+-------------+-------------|
| Equity ratio, % | 51.9 | 64.1 | 63.1 |
|---------------------+--------------+-------------+-------------|
| | | | |
|---------------------+--------------+-------------+-------------|
| | 4-6/2007 | 4-6/2006 | 1-12/2006 |
|---------------------+--------------+-------------+-------------|
| Cash flow after | | | |
| investments | 37 | 29 | 118 |
+----------------------------------------------------------------+
* (interest-bearing debt - liquid assets) / (adjusted EBITDA for the
period x 4)
Valid financing arrangements
+-------------------------------------------------------------------+
| EUR million | Maximum amount | In use on 30 Jun |
| | | 2007 |
|-------------------------------+----------------+------------------|
| Committed credit line | 170 | 0 |
|-------------------------------+----------------+------------------|
| Commercial paper programme 1) | 150 | 0 |
|-------------------------------+----------------+------------------|
| EMTN programme 2) | 1,000 | 666 |
+-------------------------------------------------------------------+
1) The programme is not committed.
2) European Medium Term Note programme, not committed.
Long-term credit ratings
+------------------------------------------------------+
| Credit rating agency | Classification | Outlook |
|---------------------------+----------------+---------|
| Moody's Investor Services | Baa2 | Stable |
|---------------------------+----------------+---------|
| Standard & Poor's | BBB | Stable |
+------------------------------------------------------+
Share
At the end of June, the Group's total number of shares was
166,066,016, with 8,049,976 held by Elisa or Group companies. The
closing price on 29 June 2007 was EUR 20.22, representing a decrease
of 2.6 per cent compared with EUR 20.75 at the end of the year.
Compared with a year ago, the price has increased by 35.8 percent
from EUR 14.89. As of 30 June 2007, the market capitalisation was EUR
3,195 million.
In April-June, a total of 78.3 million shares were traded on the
Helsinki Stock Exchange for an aggregate of EUR 1,683.6 million. The
trading volume was 49.6 per cent of the number of shares on the
market.
Treasury shares
The General Meeting on 19 March 2007 authorised the Board of
Directors to acquire treasury shares to a maximum number of
16,000,000. Based on the authorisation, Elisa acquired a total of
4,000,000 treasury shares in April-May. At the end of June, Elisa and
its Group companies held 8,049,976 shares (4,125,000 at the end of
2006), having a counter value of EUR 4.02 million and representing
4.85 per cent of the share capital and votes.
Significant legal issues
The Regulation of the European Parliament and Council on roaming
entered into force on 30 June 2006. The Regulation lays down price
ceilings for mobile calls between EU countries. Elisa estimates that
the Regulation will not have significant economic effects on Elisa.
The Finnish Communications Regulatory Authority is currently
investigating the pricing of calls to "corporate numbers" on the
market in general.
Short-term risks and uncertainties
The telecommunications business is under intense competition in
Elisa's main market areas, which may affect Elisa's business.
The rapid developments in telecommunications technology may have a
significant impact on Elisa's business.
Elisa's main market is Finland, where the number of mobile phones per
inhabitant is among the highest in the world. Thus the overall market
of mobile subscriptions in Finland cannot grow significantly.
Furthermore, the share of phone traffic in Elisa's fixed network has
decreased in the past few years. These factors may limit the
opportunities for growth.
The telecommunications industry is subject to heavy regulation. Elisa
and its business are monitored and regulated by several public
authorities. This regulation also affects the price level of some
products and services offered by Elisa.
Events after the period under review
There have been no significant events after the reporting period.
Outlook for 2007
Competition in the Finnish telecommunications market remains
challenging, while the focus is increasingly on services. The use of
mobile communications and broadband products is continuing to rise.
Elisa's aim is to further reinforce its position as the service
leader.
The Group's revenue is expected to grow on last year and EBITDA and
EBIT excluding non-recurring items are expected to improve. The
contributory factors include the growth in the 3G market and the
efficiency measures. During the second half of the year, EBITDA and
EBIT excluding non-recurring items are expected to improve markedly
on the first half on the year.
Capital expenditures during the year are estimated to total 11 to 13
per cent of the revenue, and cash flow will remain clearly positive.
BOARD OF DIRECTORS
Elisa Corporation
1.1. - 30.6.2007
Unaudited
CONSOLIDATED INCOME
STATEMENT
4-6 4-6 1-6 1-6 1-12
EUR million Note 2007 2006 2007 2006 2007
Revenue 1 393,4 382,4 771,8 730,8 1 518,4
Other operating income 13,7 1,1 14,9 3,9 8,7
Materials and services -179,7 -179,5 -354,3 -328,4 -689,3
Employee benefit
expenses -48,2 -60,3 -92,2 -116,9 -213,9
Other operating
expenses -52,5 -48,9 -98,8 -96,1 -189,4
EBITDA 1 126,7 94,8 241,4 193,3 434,5
Depreciation 3 -49,4 -56,2 -95,6 -111,5 -209,1
EBIT 1 77,3 38,6 145,8 81,8 225,4
Financial income and
expense, net -10,7 -4,1 -15,3 -8,4 -13,7
Share of associated
companies' profit 0,1 0,1 0,1 0,1 0,1
Profit before tax 66,7 34,6 130,6 73,5 211,8
Income taxes -17,9 -7,0 -32,7 -16,0 -50,4
Profit for the period 48,8 27,6 97,9 57,5 161,4
Attributable to:
Equity holders of the
parent 48,5 27,3 97,3 56,9 160,3
Minority interest 0,3 0,3 0,6 0,6 1,1
48,8 27,6 97,9 57,5 161,4
Earnings per share
(EUR)
Basic 0,31 0,16 0,61 0,34 0,97
Diluted 0,31 0,16 0,61 0,34 0,97
Average number of outstanding
shares (1000 shares)
Basic 159 510 165 941 160 719 165 929 165 417
Diluted 159 510 165 941 160 719 165 929 165 417
Elisa Corporation
1.1. - 30.6.2007
Unaudited
CONSOLIDATED BALANCE SHEET
30.6. 31.12.
EUR million Note 2007 2006
Non-current assets
Property, plant and equipment 3 631,0 645,5
Goodwill 3 772,3 772,3
Other intangible assets 3 198,7 190,4
Investments in associated companies 0,4 0,4
Available-for-sale investments 53,3 48,4
Other receivables 6,4 4,8
Deferred tax receivable 33,2 33,7
1 695,3 1 695,5
Current assets
Inventories 4 28,7 38,4
Trade and other receivables 356,1 334,8
Cash and cash equivalents 27,7 22,2
412,5 395,4
Total assets 2 107,8 2 090,9
Equity attributable to equity holders of
the parent 5 1 083,9 1 307,6
Minority interest 5,1 4,7
Total equity 1 089,0 1 312,3
Non-current liabilities
Deferred tax liabilities 35,3 36,3
Provisions 7,8 8,2
Interest-bearing debt 6 639,1 321,1
Other non-current liabilities 23,0 16,1
705,2 381,7
Current liabilities
Trade and other payables 247,1 287,5
Tax liabilities 26,1 28,7
Provisions 1,2 2,7
Interest-bearing debt 6 39,2 78,0
313,6 396,9
Total equity and liabilities 2 107,8 2 090,9
Elisa Corporation
1.1. - 30.6.2007
Unaudited
STATEMENT OF CHANGES
IN EQUITY
Share
Share issue Treasury Other Retained Minority Total
EUR million capital premium shares reserves earnings interest equity
Total equity
at 1.1.2006 83,0 530,4 -2,5 418,9 307,5 12,4 1349,7
Available
for
sale
investments 1,3 1,3
Other
changes -0,3 -0,6 -0,9
Items
recognised
directly in
equity 1,0 -0,6 0,4
Profit for
the period 56,9 0,6 57,5
Total
recognised
income and
expense for
the period 1,0 56,9 0,0 57,9
Dividends -116,2 -2,0 -118,2
Sales of
treasury
shares 0,8 -0,4 0,2 0,6
Share based
compensation 0,5 0,5
Total equity
at 30.6.2006 83,0 530,4 -1,7 419,9 248,3 10,6 1290,5
Total equity
at 1.1.2007 83,0 530,4 -81,3 422,1 353,4 4,7 1312,3
Available
for
sale
investments 4,7 4,7
Items
recognised
directly in
equity 4,7 4,7
Profit for
the period 97,3 0,6 97,9
Total
recognised
income and
expense for
the period 4,7 97,3 0,6 102,6
Dividends -242,9 -0,4 -243,3
Purchase of
treasury
shares -85,6 -85,6
Sales of
treasury
shares 1,2 0,2 0,2 1,6
Share based
compensation 1,4 1,4
Total equity
at 30.6.2007 83,0 530,4 -165,7 426,8 209,4 5,1 1089,0
Elisa Corporation
1.1. - 30.6.2007
Unaudited
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
1-6 1-6 1-12
EUR million 2007 2006 2006
Cash flow from operating activities
Profit before tax 130,6 73,4 211,8
Depreciation 95,6 111,5 209,1
Other adjustments to profit before tax 1,3 10,3 8,3
Change in working capital -59,8 -47,3 -76,8
Cash generated from operations 167,7 147,9 352,4
Financial items, net -2,6 -8,2 -17,5
Taxes paid -36,9 -1,0 -0,3
Net cash flow from operating activities 128,2 138,7 334,6
Cash flow from investments
Capital expenditure -90,5 -97,0 -205,7
Purchase of shares and other investments -4,3 -7,0 -25,4
Proceeds from asset disposal 21,9 7,1 14,9
Net cash used in investing activities -72,9 -96,9 -216,2
Cash flow before financing activities 55,3 41,8 118,4
Cash flow from financing activities
Purchase of treasury shares -85,6 -79,4
Proceeds from treasury shares 1,7 0,9 1,0
Proceeds from long-term borrowings 350,0
Repayment of long-term borrowings -44,2 -122,4 -122,4
Change in short-term borrowings -25,0 35,0 25,0
Repayment of finance lease liabilities -3,7 -5,6 -9,5
Dividends paid -243,0 -121,8 -123,6
Net cash from/used in financing activities -49,8 -213,9 -308,9
Change in cash and cash equivalents 5,5 -172,1 -190,5
Cash and cash equivalents at beginning of period 22,2 212,7 212,7
Cash and cash equivalents at end of period 27,7 40,6 22,2
Elisa Corporation
1.1.-30.6.2007
Unaudited
NOTES
BASIS OF PREPARATION
The Interim consolidated financial statements are in compliance
with IAS 34 "Interim Financial Reporting".
The Interim consolidated financial statements have been
prepared in accordiance with International Financial
Reporting Standards (IFRS) effective at the time of preparing
and adopted for use by European Union.
The accounting principles applied in the Interim report are the same
as those applied in the Consolidated financial statements
at 31 December 2006. This Interim consolidated financial
statements should be read in conjunction with the
2006 Consolidated financial statements.
The Group adopted the following standards, amendments to standards
and interpretations as from 1 January 2007 onward:
IFRS 7 Financial Instrument; Disclosure
IAS 1 Presentation of Financial statements; Capital Disclosures
IFRIC 8 Scope of IFRS2
IFRIC 9 Reassessment of Embedded Derivatives
IFRIC 10 Interim Financial Reporting and Impairment
These newly adopted standards and interpretations have not had
any effect on Interim consolidated financial statements.
1. BUSINESS SEGMENT
INFORMATION
4-6/2007 Fixed Other Unallocated Group
Eur million Mobile Network business items Eliminations Total
External
sales 241,7 151,7 393,4
Inter-segment
sales 4,4 8,5 -12,9 0,0
Revenue 246,1 160,2 -12,9 393,4
EBITDA 72,4 55,9 -1,6 126,7
EBIT 46,0 32,8 -1,5 77,3
Financial
income and
expense -10,7 -10,7
Share of
associated
companies'
profit 0,1 0,1
Profit before
tax 66,7
4-6/2006 Fixed Other Unallocated Group
Eur million Mobile Network business items Eliminations Total
External
sales 232,9 149,5 382,4
Inter-segment
sales 6,5 16,8 -23,3 0,0
Revenue 239,4 166,3 -23,3 382,4
EBITDA 57,0 39,3 -1,5 94,8
EBIT 29,0 11,2 -1,6 38,6
Financial
income and
expense -4,1 -4,1
Share of
associated
companies'
profit 0,1 0,1
Profit before
tax 34,6
Elisa Corporation
1.1.-30.6.2007
Unaudited
1-6/2007 Fixed Other Unallocated Group
Eur million Mobile Network business items Eliminations Total
External
sales 465,9 305,9 771,8
Inter-segment
sales 9,2 16,9 -26,1 0,0
Revenue 475,1 322,8 -26,1 771,8
EBITDA 139,5 105,1 -3,2 241,4
EBIT 89,7 59,2 -3,1 145,8
Financial
income and
expense -15,3 -15,3
Share of
associated
companies'
profit 0,1 0,1
Profit before
tax 130,6
Assets total 1394,3 592,4 121,1 2107,8
Investments 41,6 51,8 93,4
1-6/2006 Fixed Other Unallocated Group
Eur million Mobile Network business items Eliminations Total
External
sales 418,4 312,4 730,8
Inter-segment
sales 13,0 33,8 -46,8 0,0
Revenue 431,4 346,2 -46,8 730,8
EBITDA 110,3 85,7 -2,7 193,3
EBIT 59,2 26,3 -3,7 81,8
Financial
income and
expense -8,4 -8,4
Share of
associated
companies'
profit 0,1 0,1
Profit before
tax 73,5
Investments 39,4 57,6 97,0
1-12/2007 Fixed Other Unallocated Group
Eur million Mobile Network business items Eliminations Total
External
sales 905,5 612,8 0,1 1518,4
Inter-segment
sales 24,4 52,2 -76,6 0,0
Revenue 929,9 665,0 0,1 -76,6 1518,4
EBITDA 259,0 181,1 -5,6 434,5
EBIT 161,7 70,6 -6,9 225,4
Financial
income and
expense -13,7 -13,7
Share of
associated
companies'
profit 0,1 0,1
Profit before
tax 211,8
Assets total 1384,2 597,0 109,7 2090,9
Investments 80,0 127,4 207,4
2.
ACQUISITIONS
Elisa acquired 100 % of the shares of First Orange Contact Oy and
some additional shares of Lounet Oy during the period. These
acquisitions have no material effect on Elisa's Interim
consolidated financial statements.
Elisa Corporation
1.1. - 30.6.2007
Unaudited
3. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Property Other
plant and intangible
EUR million equipment Goodwill assets
Cost, 1 January 2007 2 062,7 772,3 311,3
Additions 72,2 25,3
Disposals -30,5 -1,1
Reclassifications -0,6 0,6
30 June 2007 2 103,8 772,3 336,1
Accumulated depreciation/
amortisation, 1 Jan 2007 1 417,2 120,9
Depreciation for the period 78,0 17,6
Disposals and reclassifications -22,4 -1,1
30 June 2007 1 472,8 137,4
Net carrying amounts:
1 January 2007 645,5 772,3 190,4
30 June 2007 631,0 772,3 198,7
Commitments to purchase property, plant and equipment and intangible
assets amounts to 32 million euros as at 30 June 2007.
4. INVENTORIES
Write-downs of inventories amounting to 1,7 million euros were
recognised at 30 June, 2007 (4,6 million euros,
31 December, 2006)
5. EQUITY
Treasury shares
Shares Nominal Holding, % of
pcs value EUR shares and votes
Held by Lounet Oy,
31 Dec 2006 125 000 62 500 0,08 %
Held by Elisa Corporation,
31 Dec 2006 4 000 000 2 000 000 2,41 %
Held by the Group,
31 Dec 2006 4 125 000 2 062 500 2,48 %
Sold shares by Lounet Oy -75 024 -37 512 -0,04 %
Acquired shares by
Elisa Corporation 4 000 000 2 000 000 2,41 %
Treasury shares held by
the Group, 30 June 2007 8 049 976 4 024 988 4,85 %
During the first half of 2007 Elisa acquired treasury shares
(4.000 million pcs) amounting to 85,6 million euros.
Dividends
On 19 March, 2007 Elisa's Annual General Meeting decided to pay
a dividend of 0,50 euros per share and an additional dividend of
1,0 euros per share. The total dividend amounts to 243,1 million
euros and the payment started on 29 March, 2007.
Elisa Corporation
1.1. - 30.6.2007
Unaudited
6. ISSUANCES AND REPAYMENTS OF
DEBT
The following bonds have been issued or
repaid during the first half 2007:
Interest rate
Nominal Maturity Book
EUR million value Nominal Effective date value
New Issues
EMTN programme
2001/EUR 1 000 million
3-month
euribor +
I/2007 50,0 0,22% 4,119 % 3.3.2010 49,9
II/2007*) 300,0 4,75 % 4,789 % 3.3.2014 299,2
Total of new issues 350,0 349,1
*) In the same connection Elisa signed a seven-year
interest rate swap under which 150 million euros was
was converted from fixed rate to floating rate.
Repayments
Bond programme 1999/EUR
335 million
I/1999 19,6 4,75 % 4,956 % 18.6.2007 19,6
EMTN programme 2001/EUR
1,000 million
6-month
euribor +
II/2002 20,0 0,91% 4,514 % 8.4.2007 20,0
6-month
euribor +
VII/2002 4,5 0,91% 4,514 % 8.4.2007 4,5
Total of repayments 44,1 44,1
The unused amount of 1 000 MEUR EMTN
program is 358,1 million euros as at
30 June 2007.
Loan from financial institutions 0,2 million euros (0,2 million
euros 31 December 2006) was repaid according to plan.
Commercial papers were not issued as at 30 June
2007 (25 million euros, 31 December 2006).
Elisa Corporation
1.1. - 30.6.2007
Unaudited
7. RELATED PARTY TRANSACTIONS
Elisa Group has business relationship with subsidiaries and
associates. Furthermore, related parties include Board of
Directors, CEO and Executive Board.
Changes in subsidiary relationships during the period are
as follows:
First Orange Contact Oy aquired 100 %
Lounet Oy aquired 0,36 %
Related party transactions 1-6/2007
Sales 0,0
Purchases 0,3
Management remuneration will be announced in Annual financial
statements.
On 2 March 2006 a new share-based payment plan was granted
for key personnel. CEO's and Executive Board's portion of
calculated cost recognised in Profit and loss account is 1,8
million euros ( 0,6 million euros 2.3. - 30.6.2006). No payments
were made out of the plan during the Interim period. The terms
and conditions of this share-based payment plan are described
under note 24 in 2006 Annual financial statements.
8. OPERATING LEASE
COMMITMENTS
30.6. 31.12.
EUR million 2007 2006
Due within 1 year 18,6 21,5
Due after 1 year but within 5 years 32,6 37,8
Due after 5 years 13,1 21,4
Total 64,3 80,7
Elisa Corporation
1.1. - 30.6.2007
Unaudited
9. CONTINGENT LIABILITIES
30.6. 31.12.
EUR million 2007 2006
Mortgages, pledges and guarantees
Pledges given
Pledges given as surety 0,7 0,7
Guarantees given
For others (* 44,8 0,5
Mortgages, pledges and guarantees total 45,5 1,2
Other commitments
Repurchase commitments 0,3 0,4
Contingent liabilities in QTE-arrangement
Lease-leaseback agreement (QTE facility)
Total value of the arrangement 150,0 154,1
Termination risk 15,8 18,6
*) 44,3 milj. euros is related to hedging of
the guarantor bank in the QTE-arrangement
10. DERIVATIVE INSTRUMENTS
30.6. 31.12.
EUR million 2007 2006
Interest rate swaps
Nominal value 150,0
Fair value recorded in the balance sheet -4,5
Credit default swaps (*
Nominal value 50,7
Fair value recorded in the balance sheet 0,3
*) CDS is related to hedging of the guarantor bank
in the QTE-arrangement
11. EVENTS AFTER THE BALANCE SHEET DATE
No material events have taken place after the balance sheet
date.
Elisa Corporation
1.1. - 30.6.2007
Unaudited
KEY FIGURES
1-6 1-6 1-12
EUR million 2007 2006 2006
Shareholders' equity/share, EUR 6,86 7,71 8,07
Net debt 650,6 380,8 376,9
Gearing 59,7% 29,5% 28,7%
Equity ratio 51,9% 64,1% 63,1%
Return on investment (ROI) *) 17,4% 9,9% 13,2%
Gross investments in fixed assets 93,4 97,9 207,4
of which finance lease investments 2,2 0,9 1,7
Gross investments as % of revenue 12,1% 13,4% 13,7%
Investments in shares, 5,1 1,3 10,3
Average number of personnel 3 396 4 380 4 086
*) rolling 12 months profit preceding the reporting
date
Formulae for financial indicators
Gearing %
Interest-bearing debt -
cash and cash equivalents
---------------------------------- x 100
Total equity
Equity ratio %
Total equity
------------------------- x 100
Balance sheet total -
advances received
Return on investment % (ROI)
Profit before taxes +
interest costs and other financial expenses
-----------------------------------------x 100
Balance sheet total -
non-interest bearing liabilities (average)
Net debt
Interest-bearing debt - cash and cash equivalents
Shareholders' equity/share
Equity attributable to equity holders
of the parent
------------------------------------------------
Number of shares outstanding
at end of period
Earnings/share
Profit for the period attributable to
equity holders of parent
---------------------------------------------------
Average number of outstanding shares
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