2007-10-25 07:00:00 CEST
2007-10-25 07:00:00 CEST
REGULATED INFORMATION
Comptel - Quarterly report
INTERIM REPORT OF COMPTEL CORPORATION JANUARY 1 - SEPTEMBER 30, 2007
COMPTEL Stock Exchange Release, 25 October 2007 at 8.00 am
INTERIM REPORT OF COMPTEL CORPORATION JANUARY 1 - SEPTEMBER 30, 2007
In July-September the net sales grew slightly and profitability improved clearly
from the previous year.
Key figures for the third quarter:
Net sales EUR 19.8 million (July-September 2006: 19.2)
Operating profit EUR 4.0 million (3.2)
Earnings per share EUR 0.02 (0.02)
Order backlog EUR 22.8 million (24.3)
Sami Erviö, President and CEO:
”Comptel's financial performance was twofold in the third quarter of 2007. Our
profitability improved significantly and operating profit reached 20 per cent
level of net sales. However, the order flow was lower than expected. The order
intake was delayed by lengthening sales time in certain projects. Despite lower
than expected net sales, Comptel's profitability is good and prospect of orders
has remained good.
In autumn Comptel signed a preferred partnership with Orascom Telecom Holding
for provisioning and activation solutions of mobile services. We believe this
strategic partnership will further tighten our cooperation with Orascom Telecom
and its mobile subsidiaries in the Middle East, Africa and Asia.”
Business review of January-September 2007
The net sales of Comptel in the first nine months grew slightly and were EUR
58.4 million (57.6). During the third quarter net sales grew by 3.5 per cent on
previous year and were EUR 19.8 million (19.2).
The group operating profit for January-September was EUR 9.0 million (6.4)
corresponding to 15.4 per cent (11.0) of net sales. The operating profit in
July-September was EUR 4.0 million (3.2) representing 20.2 per cent of net sales
(16.5). Increased net sales and slightly lower costs compared to previous year
improved the profitability of third quarter.
The order backlog decreased during the quarter and was EUR 22.8 million at the
end of September. Compared to last year, order backlog decreased by 6.0 per
cent.
Business Areas
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| Net sales, EUR | 1-9 | 1-9 | Chang | 7-9 | 7-9 | Change | 2006 |
| million | 2007 | 2006 | e % | 2007 | 2006 | % | |
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| Europe | 35.9 | 34.4 | 4.2 | 11.4 | 10.9 | 4.8 | 47.6 |
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| Middle East and | 6.9 | 9.1 | -24.0 | 2.5 | 2.7 | -8.5 | 12.0 |
| Africa | | | | | | | |
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| America | 5.4 | 5.7 | -5.6 | 1.8 | 2.5 | -27.4 | 8.2 |
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| Asia-Pacific | 10.1 | 8.4 | 21.2 | 4.1 | 3.1 | 34.6 | 12.6 |
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| Total | 58.4 | 57.6 | 1.3 | 19.8 | 19.2 | 3.5 | 80.4 |
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| Operating profit | | | | | | | |
| by market, EUR | | | | | | | |
| million | | | | | | | |
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| Europe | 21.2 | 17.3 | 22.8 | 7.2 | 6.3 | 15.2 | 23.0 |
--------------------------------------------------------------------------------
| Middle East and | 4.0 | 5.6 | -28.3 | 1.5 | 1.8 | -16.8 | 7.2 |
| Africa | | | | | | | |
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| America | 3.2 | 3.1 | 4.2 | 1.1 | 1.6 | -31.7 | 4.5 |
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| Asia-Pacific | 5.1 | 3.4 | 47.2 | 2.2 | 0.9 | 149.8 | 6.4 |
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| Group unallocated | -24.5 | -23.0 | - | -8.1 | -7.4 | - | -29.8 |
| expenses | | | | | | | |
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| Total | 9.0 | 6.4 | 41.8 | 4.0 | 3.2 | 8.7 | 11.2 |
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| Operating profit | | | | | | | |
| as per cent of | | | | | | | |
| net sales | | | | | | | |
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| Europe | 59.1 | 50.2 | - | 63.5 | 57.8 | - | 48.3 |
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| Middle East and | 58.3 | 61.8 | - | 60.0 | 66.0 | - | 59.9 |
| Africa | | | | | | | |
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| America | 59.7 | 54.1 | - | 60.5 | 64.3 | - | 56.1 |
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| Asia-Pacific | 50.0 | 41.1 | - | 54.2 | 29.2 | - | 50.8 |
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| Total | 15.4 | 11.0 | - | 20.2 | 16.5 | - | 14.0 |
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Net sales grew in Europe and Asia-Pacific. In January-September the proportional
profitability strengthened in all areas except the Middle East and Africa.
In the first nine months Comptel closed 13 core licence agreements (1-9 2006:
16): five Comptel Mediation and Charging Solutions, six Comptel Provisioning and
Activation Solutions, one Comptel Inventory Solution and one Comptel
Interconnect Billing Solution.
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| Net sales by | 1-9 | 1-9 | Chang | 7-9 | 7-9 | Change | 2006 |
| type, | 2007 | 2006 | e % | 2007 | 2006 | % | |
| EUR million | | | | | | | |
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| Licences | 17.7 | 18.5 | -4.2 | 5.5 | 6.5 | -15.5 | 25.8 |
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| Services and | 40.7 | 39.1 | 3.9 | 14.3 | 12.7 | 13.3 | 54.6 |
| maintenance | | | | | | | |
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| Total | 58.4 | 57.6 | 1.3 | 19.8 | 19.2 | 3.5 | 80.4 |
--------------------------------------------------------------------------------
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| Net sales by | 1-9 | 1-9 | Chang | 7-9 | 7-9 | Change | 2006 |
| sales channel, | 2007 | 2006 | e % | 2007 | 2006 | % | |
| EUR million | | | | | | | |
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| Direct sales | 45.6 | 44.2 | 3.2 | 15.0 | 13.8 | 8.4 | 62.8 |
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| Partner sales | 12.8 | 13.4 | -4.8 | 4.9 | 5.4 | -9.5 | 17.6 |
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| Total | 58.4 | 57.6 | 1.3 | 19.8 | 19.2 | 3.5 | 80.4 |
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Financial Position
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| EUR million | 30.9.2007 | 31.12.2006 | Change % |
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| Balance sheet total | 67.1 | 68.8 | -2.5 |
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| Liquid assets | 9.6 | 12.9 | -25.6 |
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| Trade receivables | 24.2 | 28.2 | -14.3 |
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| Accrued income | 8.3 | 5.0 | 66.2 |
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| Deferred income related to | 1.3 | 1.5 | -13.3 |
| partial debiting | | | |
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| Equity ratio, % | 70.5 | 67.7 | - |
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Comptel Group did not have interest-bearing debt at the end of the review
period. Dividends of EUR 5.4 million (4.3) were paid.
The operating cash flow of the group was EUR 6.7 million (3.6) during
January-September. In third quarter the operating cash flow was EUR 3.6 million
(1.0).
Trade receivables at the end of period were EUR 24.2 million (December 31, 2006:
28.2).
In January, Comptel Corporation signed a lease on business premises with AC
Salmisaari Oy. Following the lease, Comptel united the operations in Finland
from three separate real estates into one in July. The new rented premises are
located in Ruoholahti district of Helsinki. The group rental commitments were
EUR 19.9 million at the end of September 2007.
Investments, Research and Development (R&D)
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| EUR million | 1-9 | 1-9 | Chang | 7-9 | 7-9 | Change | 2006 |
| | 2007 | 2006 | e% | 2007 | 2006 | % | |
--------------------------------------------------------------------------------
| Gross investments | 1.7 | 1.2 | 44.8 | 1.0 | 0.3 | 265.2 | 1.5 |
| in property, | | | | | | | |
| plant and | | | | | | | |
| equipment and | | | | | | | |
| intangible assets | | | | | | | |
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| Direct R&D | 7.4 | 8.1 | -9.1 | 2.4 | 2.9 | -17.8 | 11.1 |
| expenditure and | | | | | | | |
| Investments | | | | | | | |
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| Capitalisation of | 1.9 | 1.0 | 95.9 | 0.9 | 0.7 | 27.1 | 1.7 |
| R&D expenditure | | | | | | | |
| according to IAS | | | | | | | |
| 38 | | | | | | | |
--------------------------------------------------------------------------------
Gross investments in property, plant and equipment and intangible assets of the
review period comprise of equipment and software purchases, R&D expenses and
investment related to new premises in Finland which increased expenditure during
the period. The investments were financed by funds from operations.
The R&D investments of Comptel were at the previous year level and they are
focused on developing the new solutions for mediation, provisioning and
activation, and on further development of the existing inventory and charging
solutions. Comptel estimates that the investments in R&D will remain at the same
level in the rest of the year.
Personnel
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| | 30.9.2007 | 30.9.2006 | Change % | 31.12.2006 |
--------------------------------------------------------------------------------
| Number of employees at | 558 | 558 | 0.0 | 547 |
| the end of period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 1-9 2007 | 1-9 2006 | Change % | 2006 |
--------------------------------------------------------------------------------
| Average number of | 554 | 566 | -2.1 | 561 |
| personnel during the | | | | |
| period | | | | |
--------------------------------------------------------------------------------
There were no significant changes in number or average number of personnel
during the review period or compared to previous year.
The personnel expenses in January-September were 43.6 per cent of net sales
(49.2) and in July-September 37.7 per cent of net sales (41.1).
At the end of the period under review 60.8 per cent (57.3) of the personnel were
located in Finland and 17.9 per cent (23.8) in Norway.
Comptel's Share
The closing price of Comptel's share on September 28, 2007 was EUR 1.96 (1.52).
Market capitalisation of Comptel on September 28, 2007 was EUR 209.8 million
(162.7 million).
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| Comptel share | 1-9 | 1-9 | Chang | 7-9 | 7-9 | Change | 2006 |
| | 2007 | 2006 | e % | 2007 | 2006 | % | |
--------------------------------------------------------------------------------
| Shares traded, | 40.6 | 38.0 | 7.1 | 17.2 | 7.8 | 121.3 | 49.8 |
| million | | | | | | | |
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| Shares traded, EUR | 80.1 | 64.4 | 24.4 | 33.3 | 11.9 | 180.5 | 85.0 |
| million | | | | | | | |
--------------------------------------------------------------------------------
| Highest price, EUR | 2.29 | 2.01 | 13.9 | 2.29 | 1.72 | 33.1 | 2.01 |
--------------------------------------------------------------------------------
| Lowest price, EUR | 1.70 | 1.44 | 18.1 | 1.70 | 1.44 | 18.1 | 1.44 |
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In September, Elisa Corporation informed that its holding in Comptel Corporation
had decreased from 19.9 per cent to 13.4 per cent and OP Bank Group Central
Cooperative informed that the holding of mutual funds managed by OP Fund
Management Company Ltd had increased to 9.0 per cent in Comptel Corporation.
Of Comptel's outstanding shares, 7.5 per cent were nominee registered or held by
foreign shareholders at the end of the review period.
Comptel purchased through Helsinki Stock Exchange 410,000 Comptel shares during
February 21 - March 6, 2007. The average price per share was EUR 1.93 and the
total purchase price was EUR 791,820.
In April, Comptel Corporation transferred gratuitously 189,241 own shares to
persons involved in the 2006 incentive plan. At the end of the review period
company holds a total of 234,746 own shares.
Of the stock options 2006B distributed during the review period, a total of
1,260,000 are held by the key personnel of Comptel Corporation. The share
subscription price for stock options 2006B is EUR 1.99 per share, which
corresponds to the trade volume weighted average quotation of the Comptel
Corporation share on the Helsinki Stock Exchange during April 1 - April 30,
2007.
The own shares held by the company at the end of the review period corresponded
to 0.2 per cent of the outstanding Comptel shares. The total book-counter value
of these shares was EUR 4,695.
Corporate Governance
Mr. Mikko Saavalainen, Senior Vice President for Sales and member of the
Executive Board, gave his resignation and left the company to join another
employer. Mr. Harri Palviainen acts as Head of sales for the time being.
Events after the Review Period
Ms. Niina Pesonen (MA) has been nominated as Senior Vice President of Human
Resources of Comptel Corporation and to a member of the Executive Board as of
December 1, 2007. She has held HR management and development positions in Nokia
Networks, most recently as Head of HR North East Region in Nokia Siemens
Networks.
On November 15, Comptel Corporation announced that its profitability clearly
improved from the previous year in July-September but the net sales of 2007 may
remain lower than expected: In July-September the net sales of Comptel grew by
approximately 3.5 per cent from the previous year and operating profit is
expected to be approximately 20 per cent of net sales. The full year 2007 net
sales of Comptel are expected to be on the previous year level. Company's
operating profit is expected to grow from the previous year and to be
approximately 17-20 per cent of net sales.
Near-term risks and uncertainties
Comptel has described risks related to its operations as a part of the financial
statements for 2006. The risks are divided into strategic, financial, operative
and losses. There have not been any significant changes in Comptel's risks and
factors of uncertainty during the review period.
Comptel's main business currencies are the euro and US dollar. Changes in
exchange rates may affect the price level of the markets. Comptel hedges the
cash flows from orders. Further decrease in value of US dollar may reflect to
net sales and profitability.
The Ministry of Finance is still processing the application in which Comptel
asked to take action on preventing the double withholding taxation. First
outcomes in country specific negotiations might be expected before year end.
Comptel believes to have the treatment of its withholding taxation changed.
Future Outlook
The Operations Support Systems market is expected to continue to grow globally,
which sets prerequisites for Comptel's growth. However, the lengthening sales
time in certain projects weakens the growth prospects of net sales for the rest
of the year.
The full year 2007 net sales of Comptel are expected to be on the previous year
level. Company's operating profit is expected to grow from the previous year and
to be approximately 17-20 per cent of net sales.
An increasing portion of Comptel's business will come from services for existing
customers, which in its part lessens the fluctuation from one quarter to
another. However, single contracts or delivery projects may continue to have a
significant impact on the result of the company.
__________________________________________________________________
The interim financial statements have been prepared in accordance with IAS 34,
Interim Financial Reporting, as adopted by the EU. The accounting policies
adopted are consistent with those of the annual statement for the year ended
2006. 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.
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| Consolidated Income | 1.1.-30.9. | 1.1.-30.9 | 1.7.-30.9 | 1.7.-30.9. |
| Statement (EUR 1,000) | 2007 | .2006 | .2007 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 58,367 | 57,636 | 19,847 | 19,178 |
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| Other operating income | 12 | 134 | 11 | -1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Materials and services | -6,588 | -5,807 | -2,718 | -1,760 |
--------------------------------------------------------------------------------
| Employee benefits | -25,466 | -27,965 | -7,483 | -7,888 |
--------------------------------------------------------------------------------
| Depreciation | -3,269 | -3,379 | -1,304 | -1,162 |
--------------------------------------------------------------------------------
| Other operating expenses | -14,045 | -14,266 | -4,351 | -5,205 |
--------------------------------------------------------------------------------
| | -49,369 | -51,417 | -15,857 | -16,014 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 9,010 | 6,352 | 4,001 | 3,162 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income | 477 | 298 | 221 | 185 |
--------------------------------------------------------------------------------
| Financial expenses | -757 | -145 | -472 | 20 |
--------------------------------------------------------------------------------
| Share of result of | - | -54 | - | - |
| associated companies | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before income taxes | 8,730 | 6,451 | 3,750 | 3,367 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income taxes | -2,902 | -1,870 | -1,223 | -884 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the period | 5,829 | 4,581 | 2,527 | 2,484 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| Equity holders of the | 5,829 | 4,552 | 2,527 | 2,484 |
| parent company | | | | |
--------------------------------------------------------------------------------
| Minority interests | - | 30 | - | - |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders of the parent | | | | |
| company: | | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.05 | 0.04 | 0.02 | 0.02 |
--------------------------------------------------------------------------------
| Earnings per share, | 0.05 | 0.04 | 0.02 | 0.02 |
| diluted, EUR | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated Balance Sheet (EUR 1,000) | 30.9.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | | |
--------------------------------------------------------------------------------
| Non-current assets | | |
--------------------------------------------------------------------------------
| Other intangible assets | 8,120 | 7,875 |
--------------------------------------------------------------------------------
| Goodwill | 10,832 | 10,832 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 2,650 | 2,292 |
--------------------------------------------------------------------------------
| Investments in associates | 400 | 400 |
--------------------------------------------------------------------------------
| Available-for sale financial assets | 87 | 87 |
--------------------------------------------------------------------------------
| Deferred tax assets | 711 | 714 |
--------------------------------------------------------------------------------
| | 22,801 | 22,201 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | |
--------------------------------------------------------------------------------
| Inventories | - | 18 |
--------------------------------------------------------------------------------
| Trade and other receivables | 34,670 | 33,692 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 9,600 | 12,934 |
--------------------------------------------------------------------------------
| | 44,270 | 46,643 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 67,071 | 68,844 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity and liabilities | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity attributable to equity holders | | |
| of the parent company | | |
--------------------------------------------------------------------------------
| Share capital | 2,141 | 2,141 |
--------------------------------------------------------------------------------
| Fund of invested non-restricted equity | 7,368 | 7,368 |
--------------------------------------------------------------------------------
| Translation difference | -564 | -674 |
--------------------------------------------------------------------------------
| Retained earnings | 38,228 | 37,782 |
--------------------------------------------------------------------------------
| | 47,173 | 46,617 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minority interest | 110 | 145 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity | 47,284 | 46,761 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 2,370 | 1,604 |
--------------------------------------------------------------------------------
| Provisions | 820 | 188 |
--------------------------------------------------------------------------------
| Other liabilities | - | 169 |
--------------------------------------------------------------------------------
| | 3,190 | 1,961 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | |
--------------------------------------------------------------------------------
| Trade and other payables | 16,597 | 20,122 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | 19,787 | 22,083 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholders' equity and | 67,071 | 68,844 |
| liabilities | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated statement of | 1.1.-30.9.20 | 1.1.-30.9.200 | |
| cash flows (EUR 1,000) | 07 | 6 | |
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| | | | |
--------------------------------------------------------------------------------
| Cash flows from operating | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Profit for the period | 5,829 | 4,581 | |
--------------------------------------------------------------------------------
| Adjustments: | | | |
--------------------------------------------------------------------------------
| Transactions without cash | 4,293 | 3,457 | |
| flow effect | | | |
--------------------------------------------------------------------------------
| Interest and other financial | 22 | 57 | |
| expenses | | | |
--------------------------------------------------------------------------------
| Interest income | -253 | -145 | |
--------------------------------------------------------------------------------
| Income taxes | 2,902 | 1,870 | |
--------------------------------------------------------------------------------
| Change in working capital: | | | |
--------------------------------------------------------------------------------
| Change in trade and other | -751 | -1,270 | |
| receivables | | | |
--------------------------------------------------------------------------------
| Change in inventories | 18 | - | |
--------------------------------------------------------------------------------
| Change in trade and other | -3,030 | -4,995 | |
| payables | | | |
--------------------------------------------------------------------------------
| Change in provisions | 632 | 537 | |
--------------------------------------------------------------------------------
| Interest paid | -22 | -57 | |
--------------------------------------------------------------------------------
| Interest received | 253 | 145 | |
--------------------------------------------------------------------------------
| Income taxes paid | -3,198 | -621 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash from operating | 6,695 | 3,559 | |
| activities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash flows from investing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Acquisition of business | - | 2,294 | |
| operations (asset | | | |
| transaction), net of cash | | | |
--------------------------------------------------------------------------------
| Acquisition of property, | -1,321 | -734 | |
| plant and equipment | | | |
--------------------------------------------------------------------------------
| Acquisition of intangible | -666 | -450 | |
| assets | | | |
--------------------------------------------------------------------------------
| Capitalised development | -1,886 | -962 | |
| expenditure | | | |
--------------------------------------------------------------------------------
| Proceeds from disposal of | - | 237 | |
| property, plant and | | | |
| equipment | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash used in investing | -3,873 | 385 | |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from financing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Dividends paid | -5,365 | -4,333 | |
--------------------------------------------------------------------------------
| Acquisition of treasury | -792 | - | |
| shares | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash used in financing | -6,156 | -4,333 | |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net change in cash and cash | -3,334 | -389 | |
| equivalents | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents in | 12,934 | 9,632 | |
| the beginning of the period | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 9,600 | 9,243 | |
| the end of the period | | | |
--------------------------------------------------------------------------------
| Change | -3,334 | -389 | |
--------------------------------------------------------------------------------
| Consolidated statement of changes in equity | | |
--------------------------------------------------------------------------------
| Equity attributable to equity | | | |
| holders of the parent company | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR 1,000 | Share | Share | Other | Translation | Fair |
| | capita | premium | reserves | differences | value |
| | l | | | | reserve |
--------------------------------------------------------------------------------
| Shareholders' | 2,141 | 7,368 | - | -621 | -120 |
| equity | | | | | |
| January | | | | | |
| 1,2006 | | | | | |
--------------------------------------------------------------------------------
| Cash flow | | | | | |
| hedges: | | | | | |
--------------------------------------------------------------------------------
| gains and | | | | | 8 |
| losses | | | | | |
| taken to | | | | | |
| equity | | | | | |
--------------------------------------------------------------------------------
| Translation | | | | -111 | |
| difference | | | | | |
--------------------------------------------------------------------------------
| Taxes on | | | | | |
| items taken | | | | | |
| to equity | | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | | |
| the period | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | -111 | 8 |
| recognized | | | | | |
| income and | | | | | |
| expense for | | | | | |
| the period | | | | | |
--------------------------------------------------------------------------------
| Transfer | | -7,368 | 7,368 | | |
| between | | | | | |
| reserves | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | | |
--------------------------------------------------------------------------------
| Share-based | | | | | |
| compensation | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 2,141 | - | 7,368 | -732 | -112 |
| equity at | | | | | |
| September 30, | | | | | |
| 2006 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | Minority | Equity |
| | | | | interest | total |
--------------------------------------------------------------------------------
| EUR 1,000 | Treasu | Retained | Total | | |
| | ry | earnings | | | |
| | shares | | | | |
--------------------------------------------------------------------------------
| Shareholders' | - | 35,937 | 44,705 | 164 | 44,869 |
| equity | | | | | |
| January | | | | | |
| 1,2006 | | | | | |
--------------------------------------------------------------------------------
| Cash flow | | | | | |
| hedges: | | | | | |
--------------------------------------------------------------------------------
| gains and | | | 8 | | 8 |
| losses | | | | | |
| taken to | | | | | |
| equity | | | | | |
--------------------------------------------------------------------------------
| Translation | | | -111 | | -111 |
| difference | | | | | |
--------------------------------------------------------------------------------
| Taxes on | | | | | |
| items taken | | | | | |
| to equity | | | | | |
--------------------------------------------------------------------------------
| Profit for | | 4,552 | 4,552 | 30 | 4,582 |
| the period | | | | | |
--------------------------------------------------------------------------------
| Total | - | 4,552 | 4,449 | 30 | 4,479 |
| recognized | | | | | |
| income and | | | | | |
| expense for | | | | | |
| the period | | | | | |
--------------------------------------------------------------------------------
| Transfer | | | - | | - |
| between | | | | | |
| reserves | | | | | |
--------------------------------------------------------------------------------
| Dividends | | -4,282 | -4,282 | -51 | -4,333 |
--------------------------------------------------------------------------------
| Share-based | | 279 | 279 | | 279 |
| compensation | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | - | 36,486 | 45,151 | 143 | 45,294 |
| equity at | | | | | |
| September 30, | | | | | |
| 2006 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consolidated statement of changes in equity | | |
--------------------------------------------------------------------------------
| Equity attributable to equity holders | | | |
| of the parent company | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR 1,000 | Share | Share | Other | Translatio | Fair value |
| | capital | premium | reserves | n | Reserve |
| | | | | difference | |
| | | | | s | |
--------------------------------------------------------------------------------
| Shareholders' | 2,141 | - | 7,368 | -674 | -37 |
| equity January | | | | | |
| 1,2007 | | | | | |
--------------------------------------------------------------------------------
| Cash flow | | | | | |
| hedges: | | | | | |
--------------------------------------------------------------------------------
| gains and | | | | | 199 |
| losses | | | | | |
| taken to equity | | | | | |
--------------------------------------------------------------------------------
| Translation | | | | 110 | |
| difference | | | | | |
--------------------------------------------------------------------------------
| Taxes on items | | | | | |
| taken to equity | | | | | |
--------------------------------------------------------------------------------
| Profit for the | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | 110 | 199 |
| recognized | | | | | |
| income and | | | | | |
| expense for the | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | | |
--------------------------------------------------------------------------------
| Acquisition of | | | | | |
| treasury shares | | | | | |
--------------------------------------------------------------------------------
| Transfer of | | | | | |
| treasury shares | | | | | |
--------------------------------------------------------------------------------
| Share-based | | | | | |
| compensation | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 2,141 | - | 7,368 | -564 | 163 |
| equity at | | | | | |
| September 30, | | | | | |
| 2007 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | Minority | Equity |
| | | | | interest | Total |
--------------------------------------------------------------------------------
| EUR 1,000 | Treasur | Retained | Total | | |
| | y | earnings | | | |
| | shares | | | | |
--------------------------------------------------------------------------------
| Shareholders' | - | 37,818 | 46,616 | 145 | 46,761 |
| equity January | | | | | |
| 1,2007 | | | | | |
--------------------------------------------------------------------------------
| Cash flow | | | | | |
| hedges: | | | | | |
--------------------------------------------------------------------------------
| gains and | | | 199 | | 199 |
| losses taken | | | | | |
| to equity | | | | | |
--------------------------------------------------------------------------------
| Translation | | | 110 | | 110 |
| difference | | | | | |
--------------------------------------------------------------------------------
| Taxes on items | | | | | |
| taken to equity | | | | | |
--------------------------------------------------------------------------------
| Profit for the | | 5,829 | 5,829 | - | 5,829 |
| period | | | | | |
--------------------------------------------------------------------------------
| Total | - | 5,829 | 6,138 | - | 6,138 |
| recognized | | | | | |
| income and | | | | | |
| expense for the | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Dividends | | -5,332 | -5,332 | -34 | -5,367 |
--------------------------------------------------------------------------------
| Acquisition of | -792 | | -792 | | -792 |
| treasury shares | | | | | |
--------------------------------------------------------------------------------
| Transfer of | 365 | -365 | - | | - |
| treasury shares | | | | | |
--------------------------------------------------------------------------------
| Share-based | | 543 | 543 | | 543 |
| compensation | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | -427 | 38,492 | 47,173 | 110 | 47,284 |
| equity at | | | | | |
| September 30, | | | | | |
| 2007 | | | | | |
--------------------------------------------------------------------------------
Notes
1. Net sales and operating profit by segment
Net sales by segment
--------------------------------------------------------------------------------
| EUR 1,000 | 1.1-30.9.2 | 1.1.-30.9.20 | 1.7.-30.9.2 | 1.7.-30.9.2 |
| | 007 | 06 | 007 | 006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Europe | 35,894 | 34,433 | 11,405 | 10,880 |
--------------------------------------------------------------------------------
| Middle East and | 6,919 | 9,106 | 2,484 | 2,716 |
| Africa | | | | |
--------------------------------------------------------------------------------
| America | 5,411 | 5,730 | 1,824 | 2,512 |
--------------------------------------------------------------------------------
| Asia Pacific | 10,143 | 8,367 | 4,134 | 3,070 |
--------------------------------------------------------------------------------
| Total | 58,367 | 57,636 | 19,847 | 19,178 |
--------------------------------------------------------------------------------
Operating profit by segment
--------------------------------------------------------------------------------
| EUR 1,000 | 1.1-30.9.2 | 1.1.-30.9.20 | 1.7.-30.9.2 | 1.7.-30.9.2 |
| | 007 | 06 | 007 | 006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Europe | 21,204 | 17,270 | 7,247 | 6,290 |
--------------------------------------------------------------------------------
| Middle East and | 4,037 | 5,628 | 1,490 | 1,791 |
| Africa | | | | |
--------------------------------------------------------------------------------
| America | 3,230 | 3,098 | 1,104 | 1,616 |
--------------------------------------------------------------------------------
| Asia Pacific | 5,068 | 3,442 | 2,241 | 897 |
--------------------------------------------------------------------------------
| Group unallocated | -24,529 | -23,086 | -8,081 | -7,431 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Total | 9,010 | 6,352 | 4,001 | 3,162 |
--------------------------------------------------------------------------------
2. Income tax expense
Tax rate according to the income statement for the period was 33.2% (29.0 %).
The tax rate is relatively high due to double taxation. In 2006 Adjustment of
the Tax Office for Major Corporations refused crediting of taxes withheld at
source in taxation of 2004 and 2005. The issue has been transferred to the
Ministry of Finance. Comptel believes to have the treatment of its withholding
taxation changed.
3. Property, plant and equipment
--------------------------------------------------------------------------------
| EUR 1,000 | 1.1.-30.9.2007 | 1.1.-30.9.2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Additions | 1,319 | 780 |
--------------------------------------------------------------------------------
| Disposals | -28 | -39 |
--------------------------------------------------------------------------------
4. Related party transactions
The Comptel Group has a related party relationship with its associates, the
Board of Directors, CEO and deputy CEO.
Transactions, which have been entered into with related parties (associates),
are as follows:
--------------------------------------------------------------------------------
| EUR 1,000 | 1.1.-30.9.2007 | 1.1.-30.9.2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Purchases of goods and services | 2,063 | 898 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR 1,000 | 30.9.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Trade receivables and other current | 150 | 150 |
| receivables | | |
--------------------------------------------------------------------------------
| Trade payables and other current | 1,170 | 798 |
| liabilities | | |
--------------------------------------------------------------------------------
Remuneration to Board members and CEO
The key management personnel compensation includes the employee benefits of the
CEO, deputy CEO and the members and deputy members of the Board of Directors.
--------------------------------------------------------------------------------
| EUR 1,000 | 1.1.-30.9.2007 | 1.1.-30.9.2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Salaries and other short-term employee | 793 | 821 |
| benefits | | |
--------------------------------------------------------------------------------
| Share-based payments | 383 | 77 |
--------------------------------------------------------------------------------
5. Commitments
Minimum lease payments on non-cancellable office facilities and other operating
leases are payable as follows:
--------------------------------------------------------------------------------
| EUR 1,000 | 30.9.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Less than one year | 3,632 | 3,518 |
--------------------------------------------------------------------------------
| Between one and five years | 11,287 | 7,561 |
--------------------------------------------------------------------------------
| More than five years | 4,951 | 1,253 |
--------------------------------------------------------------------------------
| Total | 19,870 | 12,332 |
--------------------------------------------------------------------------------
The group has no material capital commitments for the purchase of property,
plant and equipment as at September 30, 2007.
6. Contingent liabilities
--------------------------------------------------------------------------------
| EUR 1,000 | 30.9.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bank guarantees | 1,170 | 775 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
7. Subsequent events
Ms. Niina Pesonen (MA) has been nominated as Senior Vice President of Human
Resources of Comptel Corporation and to a member of the Executive Board as of
December 1, 2007.
On November 15, Comptel Corporation announced that its profitability clearly
improved from the previous year in July-September but the net sales of 2007 may
remain lower than expected: In July-September the net sales of Comptel grew by
approximately 3.5 per cent from the previous year and operating profit is
expected to be approximately 20 per cent of net sales. The full year 2007 net
sales of Comptel are expected to be on the previous year level. Company's
operating profit is expected to grow from the previous year and to be
approximately 17-20 per cent of net sales.
8. Key figures
--------------------------------------------------------------------------------
| Financial summary | 1.1.-30.9.2 | 1.1.-30.9.20 | 2006 |
| | 007 | 06 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, EUR 1,000 | 58,367 | 57,636 | 80,439 |
--------------------------------------------------------------------------------
| Net sales, change % | 1.3 | 34.3 | 21.8 |
--------------------------------------------------------------------------------
| Operating profit, EUR 1,000 | 9,010 | 6,352 | 11,232 |
--------------------------------------------------------------------------------
| Operating profit, change % | 41.8 | -19.3 | 6.8 |
--------------------------------------------------------------------------------
| Operating profit, as % of net | 15.4 | 11.0 | 14.0 |
| sales | | | |
--------------------------------------------------------------------------------
| Profit before taxes, EUR 1,000 | 8,730 | 6,451 | 11,206 |
--------------------------------------------------------------------------------
| Profit before taxes, as % of | 15.0 | 11.2 | 13.9 |
| turnover | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity, % | | | 12.7 |
--------------------------------------------------------------------------------
| Return on investment, % | | | 25.3 |
--------------------------------------------------------------------------------
| Equity ratio, % | 70.5 | 71.2 | 67.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross investments in property, | 1,715 | 1,184 | 1,477 |
| plant and equipment and | | | |
| intangible assets, EUR 1,000 | | | |
--------------------------------------------------------------------------------
| Gross investments in property, | 2.9 | 2.1 | 1.8 |
| plant and equipment and | | | |
| intangible assets, as % of net | | | |
| sales | | | |
--------------------------------------------------------------------------------
| Capitalisations according to IAS | 1,886 | 962 | 1,727 |
| 38 to intangible assets 1) | | | |
--------------------------------------------------------------------------------
| Research and development | 7,404 | 8,149 | 11,079 |
| expenditure, EUR 1,000 | | | |
--------------------------------------------------------------------------------
| Research and development | 12.7 | 14.1 | 13.8 |
| expenditure, as % of net sales | | | |
--------------------------------------------------------------------------------
| Order backlog, EUR 1,000 2) | 22,818 | 24,263 | 29,483 |
--------------------------------------------------------------------------------
| Average number of employees | 554 | 566 | 561 |
| during the period | | | |
--------------------------------------------------------------------------------
| Interest-bearing net liabilities, | -9,600 | -9,243 | -12,934 |
| EUR 1,000 | | | |
--------------------------------------------------------------------------------
| Gearing ratio, % | -20.3 | -20.4 | -27.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Includes EUR 145 thousand of capitalized costs from internal systems |
| development in 2006. |
--------------------------------------------------------------------------------
| 2) The order book may vary significantly during the financial period. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Per share data | 1.1.-30.9.2 | 1.1.-30.9.20 | 2006 |
| | 007 | 06 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share (EPS), EUR | 0.05 | 0.04 | 0.05 |
--------------------------------------------------------------------------------
| EPS diluted, EUR | 0.05 | 0.04 | 0.05 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 0.44 | 0.42 | 0.44 |
--------------------------------------------------------------------------------
| Dividend per share, EUR | - | - | 0.05 |
--------------------------------------------------------------------------------
| Dividend per earnings, % | - | - | 92.8 |
--------------------------------------------------------------------------------
| Effective dividend yield, % | - | - | 2.8 |
--------------------------------------------------------------------------------
| P/E ratio | - | - | 33.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjusted number of shares at the | 107,054,810 | 107,054,810 | 107,054,810 |
| end of the period | | | |
--------------------------------------------------------------------------------
| - of which held by Comptel | 234,746 | - | - |
--------------------------------------------------------------------------------
| Adjusted average number of | 106,859,259 | 107,054,810 | 107,054,810 |
| shares during the period | | | |
--------------------------------------------------------------------------------
| Average number of shares, | 106,859,259 | 107,054,810 | 107,054,810 |
| dilution included | | | |
--------------------------------------------------------------------------------
9. Definition of key figures
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity % (ROE) | = | Profit for the year | x 100 |
--------------------------------------------------------------------------------
| | | Shareholders' equity (average | |
| | | during year) | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on investment % | = | Profit before taxes + financial | x 100 |
| (ROI) | | expenses | |
--------------------------------------------------------------------------------
| | | Balance sheet total - | |
| | | non-interest-bearing liabilities | |
| | | (average during the year) | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio % | = | Shareholders' equity | x 100 |
--------------------------------------------------------------------------------
| | | Balance sheet total - advances | |
| | | received | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share (EPS) | = | Net profit for the financial year | |
| | | attributable to equity | |
| | | shareholders | |
--------------------------------------------------------------------------------
| | | Adjusted average number of shares | |
| | | for the financial year | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dividend per share | = | Dividend | |
--------------------------------------------------------------------------------
| | | Adjusted average number of shares | |
| | | for the financial year | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dividend per earnings % | = | Dividend per share | x 100 |
--------------------------------------------------------------------------------
| | | Earnings per share (EPS) | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Effective dividend yield | = | Dividend per share | x 100 |
| % | | | |
--------------------------------------------------------------------------------
| | | Share closing price at balance | |
| | | sheet date | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| P/E ratio | = | Share closing price at balance | |
| | | sheet date | |
--------------------------------------------------------------------------------
| | | Earnings per share (EPS) | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity per share | = | Equity attributable to the equity | |
| | | holders of the parent company | |
--------------------------------------------------------------------------------
| | | Adjusted number of shares at | |
| | | balance sheet date | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gearing ratio % | = | Interest-bearing liabilities - | x 100 |
| | | cash and cash equivalents | |
--------------------------------------------------------------------------------
| | | Shareholders' equity | |
--------------------------------------------------------------------------------
Comptel will announce its financial statements for 2007 on February 13, 2008.
COMPTEL CORPORATION
Board of Directors
Additional information:
Mr. Sami Erviö, President and CEO, tel. +358 9 700 1131
Mr. Veli Matti Salmenkylä, CFO, tel. +358 50 2813
Mr. Samppa Seppälä, Director, IR and Corporate Communications, tel. +358 50 568
0533
Distribution:
OMX Nordic Exchange in Helsinki
Major media
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