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2009-04-29 07:02:01 CEST 2009-04-29 07:03:01 CEST REGULATED INFORMATION Comptel - Interim report (Q1 and Q3)INTERIM REPORT OF COMPTEL CORPORATION 1 JANUARY - 31 MARCH 2009COMPTEL Stock exchange release 29 April 2009 at 8.00 am INTERIM REPORT OF COMPTEL CORPORATION 1 JANUARY - 31 MARCH 2009 First quarter result loss-making due to low net sales. Order backlog grew. Net sales EUR 17.1 million (January-March 2008: 19.5) Operating loss EUR 3.2 million (operating profit 3.9) Operating loss excluding one-off items EUR 1.3 million (operating profit 3.9) Earnings per share EUR -0.03 (0.02) Order backlog EUR 37.6 million (33.1) It is estimated that net sales will decline slightly in 2009 due to the low net sales in the first quarter. Operating profit is forecasted not to reach the previous year's level. The cost savings related to personnel reductions will have an impact starting from the second quarter of the year. Sami Erviö, President and CEO: ”The first quarter was a challenging one for Comptel. The global economic recession weakened the performance from the previous year and our operative result was loss-making. Although we started to reduce our cost base in January, the personnel reductions will start to have an impact only in the second quarter of the year. On the contrary, the significant one-off items related to personnel reductions burdened the first quarter result. In January-March, we sold new core licenses in all our regions, a total of six. Our order backlog remained strong. The first quarter result was weak, but the current order backlog and demand set basis for a stronger performance during rest of the year. We accomplished the organisational change by combining the European sales and customer service units and by establishing a unit concentrating on Alliances and Sales Development and a unit for Strategic Marketing.” Business Review of the First Quarter 2009 Net sales of Comptel Group decreased by 12.2 per cent from the previous year and were EUR 17.1 million (19.5). Decelerating of the markets and getting the new orders mainly at the end of review period impaired the net sales. The Group incurred an operating loss of EUR 3.2 million (operating profit 3.9). The operating loss includes one-off items of EUR 1.9 million related to personnel reductions. The operating loss was 18.7 per cent of the net sales (operating profit margin 19.8). The order backlog was EUR 37.6 million. Compared to the previous year, the order backlog grew by 13.5 per cent due to an increase of change requests and maintenance contracts. In January-February, Comptel was engaged in personnel negotiations. As a result of these negotiations the company decided to make 68 people redundant. With these measures the Group will reach annual cost savings of approximately EUR 7 million out of which EUR 2 million are estimated to be realised in 2009. By reducing costs and renewing the organisation structure Comptel aims to ensure the Group's long-term profitability and competitiveness. Business Areas -------------------------------------------------------------------------------- | Net sales, EUR million | 1-3 2009 | 1-3 | Change % | 2008 | | | | 2008 | | | -------------------------------------------------------------------------------- | Europe | 7.6 | 9.2 | -17.8 | 40.8 | -------------------------------------------------------------------------------- | Asia-Pacific | 4.8 | 5.8 | -16.2 | 20.9 | -------------------------------------------------------------------------------- | Middle East and Africa | 3.4 | 2.5 | 37.7 | 15.3 | -------------------------------------------------------------------------------- | Americas | 1.3 | 2.1 | -35.2 | 7.9 | -------------------------------------------------------------------------------- | Total | 17.1 | 19.5 | -12.2 | 84.8 | -------------------------------------------------------------------------------- | Operating profit/loss by | | | | | | market area, EUR million | | | | | -------------------------------------------------------------------------------- | Europe | 2.5 | 5.2 | -53.1 | 20.9 | -------------------------------------------------------------------------------- | Asia-Pacific | 3.0 | 4.2 | -28.6 | 9.3 | -------------------------------------------------------------------------------- | Middle East and Africa | 2.0 | 0.9 | 119.1 | 8.9 | -------------------------------------------------------------------------------- | Americas | 0.1 | 1.0 | -92.6 | 4.2 | -------------------------------------------------------------------------------- | Unallocated costs | -10.7 | -7.4 | 44.0 | -32.0 | -------------------------------------------------------------------------------- | Total | -3.2 | 3.9 | -182.8 | 11.4 | -------------------------------------------------------------------------------- | Operating profit/loss, as | | | | | | per cent of net sales | | | | | -------------------------------------------------------------------------------- | Europe | 32.4 | 56.7 | - | 51.3 | -------------------------------------------------------------------------------- | Asia-Pacific | 62.2 | 73.0 | - | 44.8 | -------------------------------------------------------------------------------- | Middle East and Africa | 58.9 | 37.0 | - | 58.6 | -------------------------------------------------------------------------------- | Americas | 5.4 | 47.1 | - | 53.1 | -------------------------------------------------------------------------------- | Total | -18.7 | 19.8 | - | 13.4 | -------------------------------------------------------------------------------- The decelerating markets and the licence deals closing at the end of review period impaired net sales in Europe and in the Americas. The growth continued in the Middle East and Africa. In Asia-Pacific net sales remained lower than previous year when Comptel booked a deal of significant value. The decrease of net sales affected the operating result significantly in Europe and in the Americas. During the first quarter 2009, Comptel closed six (five) new core license agreements: three Comptel Mediation and Charging Solutions, two Comptel Provisioning and Activation Solutions and one Comptel Fulfillment Solution. -------------------------------------------------------------------------------- | Net sales breakdown by type, | 1-3 | 1-3 2008 | Change % | 2008 | | EUR million | 2009 | | | | -------------------------------------------------------------------------------- | Licenses | 3.4 | 6.8 | -50.2 | 27.4 | -------------------------------------------------------------------------------- | Services and maintenance | 13.7 | 12.7 | 8.2 | 57.5 | -------------------------------------------------------------------------------- | Total | 17.1 | 19.5 | -12.2 | 84.8 | -------------------------------------------------------------------------------- Licence deals closing at the end of review period decreased the share of licenses from net sales. -------------------------------------------------------------------------------- | Net sales by sales channel, | 1-3 | 1-3 2008 | Change % | 2008 | | EUR million | 2009 | | | | -------------------------------------------------------------------------------- | Direct sales | 12.4 | 13.3 | -7.1 | 60.4 | -------------------------------------------------------------------------------- | Partner sales | 4.7 | 6.1 | -23.2 | 24.5 | -------------------------------------------------------------------------------- | Total | 17.1 | 19.5 | -12.2 | 84.8 | -------------------------------------------------------------------------------- In the previous year the partner sales increased significantly as a result of a long-term agreement with IBM India. Financial Position -------------------------------------------------------------------------------- | EUR million | 31 March 2009 | 31 Dec 2008 | Change % | -------------------------------------------------------------------------------- | Statement of financial | 84.2 | 83.0 | 1.5 | | position, total | | | | -------------------------------------------------------------------------------- | Liquid assets | 6.5 | 6.1 | 5.9 | -------------------------------------------------------------------------------- | Trade receivables | 28.0 | 27.6 | 1.5 | -------------------------------------------------------------------------------- | Accrued income | 11.7 | 9.2 | 27.4 | -------------------------------------------------------------------------------- | Deferred income related to | 1.5 | 1.8 | -16.5 | | partial debiting | | | | -------------------------------------------------------------------------------- | Interest-bearing debt | 10.0 | 5.1 | 98.8 | -------------------------------------------------------------------------------- | Equity ratio, % | 59.8 | 67.4 | - | -------------------------------------------------------------------------------- The statement of financial position, total on 31 March 2009 was EUR 84.2 million, of which liquid assets amounted to EUR 6.5 million. The operating cash flow was EUR 0.4 million (6.3) during the first quarter. The paid dividends were EUR 4.1 million. In the previous year, the dividends of EUR 6.4 million were paid during the second quarter. Trade receivables at the end of the review period were EUR 28.0 million (23.6). The lengthening of payment time increased trade receivables. However, the risk for bad debts is not estimated to have increased significantly. The Group had EUR 10.0 million of interest-bearing debt at the end of the review period (0.0). Comptel Corporation has in force a revolving credit facility of EUR 15.0 million maturing in 2013, of which EUR 5.0 million is still available for withdrawal. Equity ratio was 59.8 per cent (70.9) and gearing ratio was 8.0 (-40.5). Investments, Research and Development (R&D) -------------------------------------------------------------------------------- | EUR million | 1-3 | 1-3 2008 | Change % | 2008 | | | 2009 | | | | -------------------------------------------------------------------------------- | Gross investments in property, | 0.1 | 0.4 | -77.1 | 10.9 | | plant and equipment and | | | | | | intangible assets | | | | | -------------------------------------------------------------------------------- | Direct R&D expenditure and | 2.4 | 2.7 | -12.6 | 14.0 | | investments | | | | | -------------------------------------------------------------------------------- | Capitalisation of R&D | 1.0 | 1.2 | -19.1 | 4.6 | | expenditure according to IAS 38 | | | | | -------------------------------------------------------------------------------- The gross investments during the period comprised of investments in devices, software and furnishing. The investments were funded through cash flow from operations. Comptel's R&D expenditure and investments were mainly targeted to develop new dynamic end-to-end solutions, which shorten time-to-market for new services and enable service providers to charge for them. Personnel -------------------------------------------------------------------------------- | | 31 March | 31 March | Change % | 31 Dec 2008 | | | 2009 | 2008 | | | -------------------------------------------------------------------------------- | Number of employees | 635 | 541 | 17.4 | 653 | | at the end of period | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 1-3 2009 | 1-3 2008 | Change % | 2008 | -------------------------------------------------------------------------------- | Average number of | 645 | 546 | 18.1 | 606 | | personnel | | | | | | during the period | | | | | -------------------------------------------------------------------------------- Number of employees grew significantly from the previous year due to the acquisition of Axiom Systems. During the review period, number of employees decreased in the United Kingdom as a result of cost reduction. The impact of personnel reductions will be realised in Finland and Norway later this year. In the first quarter, the personnel expenses including one-off items were 69.0 per cent of net sales (43.7). At the end of period 45.8 per cent (59.0) of the personnel were located in Finland, 13.5 per cent (17.0) in Norway, 15.4 per cent (11.3) in Malaysia and 9.8 per cent (0.9) in the United Kingdom. Comptel Share The closing price of Comptel's share on 31 March 2009 was EUR 0.61 (1.45). Comptel's market value at the end of the period was EUR 65.2 million (155.1). -------------------------------------------------------------------------------- | Comptel share | 1-3 2009 | 1-3 2008 | Change % | 2008 | -------------------------------------------------------------------------------- | Shares traded, million | 14.3 | 8.9 | 60.1 | 30.5 | -------------------------------------------------------------------------------- | Shares traded, EUR | 9.0 | 12.4 | -27.7 | 39.7 | | million | | | | | -------------------------------------------------------------------------------- | Highest price, EUR | 0.72 | 1.55 | -53.5 | 1.58 | -------------------------------------------------------------------------------- | Lowest price, EUR | 0.57 | 1.25 | -54.4 | 0.60 | -------------------------------------------------------------------------------- Of Comptel's outstanding shares, 7.5 per cent (7.1) were nominee registered or held by foreign shareholders at the end of the review period. Comptel Corporation paid 168,426 shares as part of share-based incentives to persons involved in the program and 100,922 shares to the members of the Board of Directors as a part of their annual compensation. The company held 92,654 of its own shares at the end of the period under review, which is 0.09 per cent of the total number of its shares. The total counter-book value of the shares held by the company was EUR 1,853. No share options were distributed during the review period. Corporate Governance The Annual General Meeting, held on 16 March 2009, elected the following members for the Board of Directors: Mr Olli Riikkala (M.Sc. Eng., MBA), Mr Hannu Vaajoensuu (Full-time Chairman, Basware Corporation), Mr Timo Kotilainen (Managing Director, Nixu Oy) and Mr Juhani Lassila (Managing Director, Agros Oy) and Mr Petteri Walldén (M.Sc. Eng.). In its meeting held after the Annual General Meeting, the Board of Directors re-elected Mr Olli Riikkala as chairman and Mr Hannu Vaajoensuu as vice chairman. Mr Juhani Lassila continues as chairman of the audit committee in which the other members are Mr Timo Kotilainen and Mr Petteri Walldén. Mr Olli Riikkala continues as chairman of the compensation committee in which the other members are Mr Timo Kotilainen and Mr Hannu Vaajoensuu. KPMG Oy Ab continues as the auditors of Comptel, Mr Pekka Pajamo (APA) being the principal auditor. The Annual General Meeting decided to issue stock options to the key personnel of the Comptel Group and granted the Board of Directors authorisations to repurchase Comptel's own shares and to decide on share issues. A separate stock exchange release about the authorisations given and other decisions made by the Annual General Meeting was published on 16 March 2009. Comptel developed further its organisational structure in January 2009 by combining the European sales and customer service units and by establishing a unit concentrating on Alliances and Sales Development and a unit for Strategic Marketing. The new organisation completes the organisational change implemented in the beginning of 2008, which moved business management close to the customers and combined the product units. From the beginning of 2009, the Corporate Executives are Mr Sami Erviö, President and CEO, the business area leaders Mr Harri Palviainen (Europe), Mr Youssef Kermoury (Middle East and Africa), Mr Mika Korpinen (Asia-Pacific) and Mr Ricardo Carreon (Americas), Mr Minesh Patel responsible for Alliances and Sales Development, Ms Arnhild Schia responsible for Strategic Marketing, Mr Simo Sääskilahti responsible for Products and Solutions, Mr Gareth Senior, CTO, Mr Veli Matti Salmenkylä, CFO responsible for Administration, Ms Niina Pesonen, responsible for Human Resources, and Mr Markku Järvenpää responsible for Global Operations Support. The employment contract of CFO Veli Matti Salmenkylä terminated on 15 March 2009. Mr Markku Pirskanen, M.Sc. (Econ), was nominated as the new CFO of Comptel Corporation as of 20 April 2009. In January 2009, the Board of Directors of Comptel Corporation approved a new share-based incentive plan for the key personnel of Comptel Group. The aim of the plan is to combine the objectives of the shareholders and the key personnel in order to increase the value of the company, to commit the key personnel to the company, and to offer them a competitive reward plan based on holding the company shares. Near-term Risks and Uncertainties The weakening of world economy combined with an exceptional fluctuation in exchange rates has led to a strong decrease in demand in many industries. The weakening of Operations Support System markets may continue in Europe and in the North America, and deceleration of the markets can expand also in other regions. Comptel develops dynamic end-to-end solutions for leading operators in the telecom field. This requires Comptel to understand correctly the trends taking place in its business environment and the needs of its customers and resellers. Failure to identify market conditions, address customers' needs and develop its products in a timely way may significantly undermine Comptel's business and profitability. Comptel operates globally so it is exposed to risks arising from different currency positions. Exchange rate changes between the euro, which is the company's reporting currency, and the US dollar, UK pound sterling and Norwegian krone affect the company's net sales, expenses and net profit. The application submitted by Comptel to prevent double taxation is still pending with the Ministry of Finance. The company believes the treatment of its withholding taxation will be changed also concerning the countries where the issue is still unsolved. However, double taxation may have an adverse impact on the company's earnings per share. Outlook The worldwide economic situation has raised uncertainty and weakened the visibility also in the global Operations Support System markets. The weakening of markets especially in Europe since the latter part of last year seems to have diminished and recently it has appeared signs of stabilising markets and improving visibility. The company's order backlog has remained at a higher level than in the previous year. Due to low net sales in the first quarter, it is estimated that Comptel's net sales will decline slightly in 2009. Comptel's operating profit is estimated not to reach the previous year's level. The cost savings related to personnel reductions will have an impact starting from the second quarter of the year. TABLE PART The interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU. The accounting policies adopted in the interim financial statements are consistent with those of the annual report for the year ended 2008 except for the application of new or amended standards and interpretations as set forth in note 1. All figures in the financial report have been rounded and consequently the sum of the individual figures can deviate from the sum figure. The interim report is unaudited. -------------------------------------------------------------------------------- | Consolidated Statement of Comprehensive | 1 Jan - | 1 Jan - | | Income (EUR 1,000) | 31 Mar | 31 Mar 2008 | | | 2009 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 17,101 | 19,478 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other operating income | 10 | - | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Materials and services | -1,556 | -1,251 | -------------------------------------------------------------------------------- | Employee benefits | -11,877 | -8,506 | -------------------------------------------------------------------------------- | Depreciation, amortisation and impairment | -1,286 | -1,066 | | charges | | | -------------------------------------------------------------------------------- | Other operating expenses | -5,589 | -4,794 | -------------------------------------------------------------------------------- | | -20,308 | -15,616 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit/loss | -3,197 | 3,862 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial income | 311 | 238 | -------------------------------------------------------------------------------- | Financial expenses | -392 | -643 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/Loss before income taxes | -3,279 | 3,457 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income taxes | 219 | -1,460 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/Loss for the period | -3,060 | 1,997 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other comprehensive income | | | -------------------------------------------------------------------------------- | Cash flow hedges | -118 | 141 | -------------------------------------------------------------------------------- | Translation differences | 342 | -122 | -------------------------------------------------------------------------------- | Income tax relating to components of other | 31 | -37 | | comprehensive income | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total comprehensive income for the period | -2,805 | 1,979 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/Loss attributable to: | | | -------------------------------------------------------------------------------- | Equity holders of the parent company | -3,060 | 1,997 | -------------------------------------------------------------------------------- | Minority interests | - | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total comprehensive income attributable to: | | | -------------------------------------------------------------------------------- | Equity holders of the parent company | -2,805 | 1,979 | -------------------------------------------------------------------------------- | Minority interests | - | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders of the parent company: | | | -------------------------------------------------------------------------------- | Earnings per share, EUR | -0.03 | 0.02 | -------------------------------------------------------------------------------- | Earnings per share, diluted, EUR | -0.03 | 0.02 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated Statement of Financial | 31 Mar 2009 | 31 Dec 2008 | | Position (EUR 1,000) | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Goodwill | 18,965 | 19,027 | -------------------------------------------------------------------------------- | Other intangible assets | 12,125 | 11,978 | -------------------------------------------------------------------------------- | Tangible assets | 2,339 | 2,595 | -------------------------------------------------------------------------------- | Investments in associates | 649 | 649 | -------------------------------------------------------------------------------- | Available-for sale financial assets | 87 | 87 | -------------------------------------------------------------------------------- | Deferred tax assets | 1,133 | 1,153 | -------------------------------------------------------------------------------- | Other non-current receivables | 252 | 244 | -------------------------------------------------------------------------------- | | 35,550 | 35,734 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Trade and other receivables | 42,141 | 41,106 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 6,497 | 6,135 | -------------------------------------------------------------------------------- | | 48,637 | 47,241 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | 84,188 | 82,975 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity and liabilities | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity attributable to equity holders | | | | of the parent company | | | -------------------------------------------------------------------------------- | Share capital | 2,141 | 2,141 | -------------------------------------------------------------------------------- | Fund of invested non-restricted equity | 7,499 | 7,433 | -------------------------------------------------------------------------------- | Translation difference | -2,158 | -2,500 | -------------------------------------------------------------------------------- | Retained earnings | 37,099 | 44,502 | -------------------------------------------------------------------------------- | | 44,581 | 51,576 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Minority interest | - | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity | 44,581 | 51,576 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current liabilities | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 5,039 | 4,902 | -------------------------------------------------------------------------------- | Provisions | 4,042 | 2,937 | -------------------------------------------------------------------------------- | Non-current financial liabilities | 1 | 12 | -------------------------------------------------------------------------------- | | 9,081 | 7,851 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | | | -------------------------------------------------------------------------------- | Trade and other current liabilities | 20,483 | 18,507 | -------------------------------------------------------------------------------- | Current financial liabilities | 10,043 | 5,040 | -------------------------------------------------------------------------------- | | 30,526 | 23,548 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total liabilities | 39,607 | 31,399 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity and liabilities | 84,188 | 82,975 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated statement of cash flows | 1 Jan - | 1 Jan - | | (EUR 1,000) | 31 Mar 2009 | 31 Mar 2008 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flows from operating activities | | | -------------------------------------------------------------------------------- | Profit/Loss for the period | -3,060 | 1,997 | -------------------------------------------------------------------------------- | Adjustments: | | | -------------------------------------------------------------------------------- | Transactions without cash flow effect | 1,541 | 1,560 | -------------------------------------------------------------------------------- | Interest and other financial expenses | 71 | 17 | -------------------------------------------------------------------------------- | Interest income | -15 | -91 | -------------------------------------------------------------------------------- | Income taxes | -219 | 1,460 | -------------------------------------------------------------------------------- | Change in working capital: | | | -------------------------------------------------------------------------------- | Change in trade and other receivables | 1,126 | 2,499 | -------------------------------------------------------------------------------- | Change in trade and other current | 1,126 | 44 | | liabilities | | | -------------------------------------------------------------------------------- | Change in provisions | 1,105 | 93 | -------------------------------------------------------------------------------- | Interest paid | -10 | -17 | -------------------------------------------------------------------------------- | Interest received | 16 | 91 | -------------------------------------------------------------------------------- | Income taxes paid | -1,252 | -1,350 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash from operating activities | 429 | 6,303 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flows from investing activities | | | -------------------------------------------------------------------------------- | Purchase price adjustments | 268 | - | -------------------------------------------------------------------------------- | Investments in tangible assets | -72 | -365 | -------------------------------------------------------------------------------- | Investments in intangible assets | -16 | -1 | -------------------------------------------------------------------------------- | Investments in development projects | -1,004 | -1,242 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash used in investing activities | -823 | -1,607 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flows from financing activities | | | -------------------------------------------------------------------------------- | Dividends paid | -4,101 | - | -------------------------------------------------------------------------------- | Acquisition of Corporation's own | -174 | - | | shares | | | -------------------------------------------------------------------------------- | Proceeds from borrowings | 5,000 | - | -------------------------------------------------------------------------------- | Other non-current liabilities | -11 | - | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash used in financing activities | 713 | - | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net change in cash and cash | 319 | 4,696 | | equivalents | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalents at the | 6,135 | 14,708 | | beginning of the period | | | -------------------------------------------------------------------------------- | Effects of changes in foreign | -43 | - | | exchange rates | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at the end | 6,497 | 19,404 | | of the period | | | -------------------------------------------------------------------------------- | Change | 319 | 4,696 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated Statement of Changes in Equity | | | -------------------------------------------------------------------------------- | Equity attributable to equity holders | | | | | of the parent company | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1,000 | Share | Other | Translati | Fair value | | | | capital | reserves | on | reserve | | | | | | differenc | | | | | | | es | | | -------------------------------------------------------------------------------- | Equity at 31 | 2,141 | 7,368 | -817 | 78 | | | Dec 2007 | | | | | | -------------------------------------------------------------------------------- | Dividends | | | | | | -------------------------------------------------------------------------------- | Transfer of | | | | | | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | | | | compensation | | | | | | -------------------------------------------------------------------------------- | Total | | | -122 | 104 | | | comprehensive | | | | | | | income for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Equity at 31 | 2,141 | 7,368 | -939 | 182 | | | Mar 2008 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | | | Minority | Equity | | | | | | interest | total | -------------------------------------------------------------------------------- | EUR 1,000 | Treasur | Retained | Total | | | | | y | earnings | | | | | | shares | | | | | -------------------------------------------------------------------------------- | Equity at 31 | -427 | 43,686 | 52,031 | 116 | 52,147 | | Dec 2007 | | | | | | -------------------------------------------------------------------------------- | Dividends | | -6,415 | -6,415 | - | -6,415 | -------------------------------------------------------------------------------- | Transfer of | 302 | -302 | - | | - | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Share-based | | 216 | 216 | | 216 | | compensation | | | | | | -------------------------------------------------------------------------------- | Total | | 1,997 | 1,979 | | 1,979 | | comprehensive | | | | | | | income for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Equity at 31 | -125 | 39,182 | 47,810 | 116 | 47,926 | | Mar 2008 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated Statement of Changes in Equity | | | -------------------------------------------------------------------------------- | Equity attributable to equity holders | | | | | of the parent company | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1,000 | Share | Other | Translati | Fair value | | | | capital | reserves | on | reserve | | | | | | differenc | | | | | | | es | | | -------------------------------------------------------------------------------- | Equity at 31 | 2,141 | 7,433 | -2,500 | 85 | | | Dec 2008 | | | | | | -------------------------------------------------------------------------------- | Dividends | | | | | | -------------------------------------------------------------------------------- | Acquisition of | | | | | | | Corporation's | | | | | | | own shares | | | | | | -------------------------------------------------------------------------------- | Transfer of | | 67 | | | | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | | | | compensation | | | | | | -------------------------------------------------------------------------------- | Total | | | 342 | -87 | | | comprehensive | | | | | | | income for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Equity at 31 | 2,141 | 7,499 | -2,158 | -2 | | | Mar 2009 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | | | Minority | Equity | | | | | | interest | total | -------------------------------------------------------------------------------- | EUR 1,000 | Treasur | Retained | Total | | | | | y | earnings | | | | | | shares | | | | | -------------------------------------------------------------------------------- | Equity at 31 | -125 | 44,541 | 51,576 | 0 | 51,576 | | Dec 2008 | | | | | | -------------------------------------------------------------------------------- | Dividends | | -4,278 | -4,278 | - | -4,278 | -------------------------------------------------------------------------------- | Acquisition of | -174 | | -174 | | -174 | | Corporation's | | | | | | | own shares | | | | | | -------------------------------------------------------------------------------- | Transfer of | 174 | -174 | 67 | | 67 | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Share-based | | 197 | 197 | | 197 | | compensation | | | | | | -------------------------------------------------------------------------------- | Total | | -3,060 | -2,805 | | -2,805 | | comprehensive | | | | | | | income for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Equity at 31 | -125 | 37,226 | 44,581 | - | 44,581 | | Mar 2009 | | | | | | -------------------------------------------------------------------------------- Notes 1. Application of new or amended standards and interpretations On 1 January 2009 the Group adopted the following new and amended standards and interpretations endorsed by the EU and that are applicable to Comptel: IAS 1 Presentation of Financial Statements (revised 2007). The amendments have mainly changed the presentation format of the income statement and the statement of changes in equity. IFRS 8 Operating Segments. Under IFRS 8 identification of segments is based on the reporting used for internal reporting purposes to the top management. IFRS 8 has not changed the reportable segments of the Comptel Group. IFRS 2 Sharebased Payment - Vesting conditions and Cancellations. The amended standard requires all non-vesting conditions to be taken into account when determining the fair value of the equity instruments granted. The amendment has not had any impact on the interim report of Comptel. Improvements to IFRSs (Annual Improvements 2007). The amendments to the standards have not had significant impact on the interim report of Comptel. 2. Segment information IFRS 8 Operating Segments standard became effective on 1 January 2009. According to the standard operating segment information must be based on management reporting and accounting principles followed therein. Comptel Group's operating segment reporting is conforming to IFRS standards. Adoption of IFRS 8 Operating Segments did not change the reported operating segments or items allocated or not allocated to the segments of Comptel Group, or the definitions of such items. The assessment of the operating results and resource allocation is based on the operating profit or loss of the segment in Comptel Group. The President and CEO of Comptel Group is ultimately responsible for these decisions. Net sales by segment -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - | 1 Jan - | | | 31 Mar 2009 | 31 Mar 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Europe | 7,571 | 9,213 | -------------------------------------------------------------------------------- | Asia-Pacific | 4,823 | 5,758 | -------------------------------------------------------------------------------- | Middle East and Africa | 3,377 | 2,453 | -------------------------------------------------------------------------------- | Americas | 1,330 | 2,054 | -------------------------------------------------------------------------------- | Group total | 17,101 | 19,478 | -------------------------------------------------------------------------------- Operating profit/loss by segment -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - | 1 Jan - | | | 31 Mar 2009 | 31 Mar 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Europe | 2,450 | 5,219 | -------------------------------------------------------------------------------- | Asia-Pacific | 3,001 | 4,204 | -------------------------------------------------------------------------------- | Middle East and Africa | 1,990 | 909 | -------------------------------------------------------------------------------- | Americas | 71 | 968 | -------------------------------------------------------------------------------- | Group unallocated expenses | -10,710 | -7,438 | -------------------------------------------------------------------------------- | Group operating profit/loss total | -3,197 | 3,862 | -------------------------------------------------------------------------------- | Financial income and expenses | -81 | -405 | -------------------------------------------------------------------------------- | Group profit/loss before income | -3,279 | 3,457 | | taxes | | | -------------------------------------------------------------------------------- 3. Business combinations On 21 April 2008, Comptel Corporation acquired all the shares of Axiom Systems Holdings Limited. The purchase price was GBP 7.0 million (EUR 8.9 million). During the first quarter 2009, the purchase price has been adjusted to GBP 6.8 million (EUR 8.6 million). 4. Income tax expense Tax rate according to the statement of comprehensive income for the period was -6.7% (42.2%). In 2006 Adjustment of the Tax Office for Major Corporations refused to accept the crediting of taxes withheld at source in taxation of 2004 and 2005. The issue has been transferred to the Ministry of Finance. The Ministry of Finance has now come to an agreement with Greece, Malaysia and Romania. Relating to these countries, Comptel has booked EUR 725 thousand tax receivables. For other countries the issue of double taxation remains to be decided by the Ministry of Finance. Comptel believes the treatment of its withholding taxation will be changed. According to the Board of Adjustment's decision currently in force, Comptel Corporation has expensed taxes withheld at source amounting to EUR 193 thousand in January - March (EUR 528 thousand). 5. Tangible assets -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - 31 Mar | 1 Jan - 31 Mar | | | 2009 | 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Additions | 71 | 379 | -------------------------------------------------------------------------------- 6. Related party transactions The Comptel Group has a related party relationship with its associates, the Board of Directors, the Corporate Executives and also with people and companies under Comptel management's influence. Transactions, which have been entered into with related parties are as follows: -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - 31 Mar | 1 Jan - 31 Mar | | | 2009 | 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Associates | | | -------------------------------------------------------------------------------- | Purchases of goods and services | 109 | 169 | -------------------------------------------------------------------------------- | Interest income | 3 | 3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Companies under management's influence | | | -------------------------------------------------------------------------------- | Purchases of goods and services | 5 | 28 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1,000 | 31 Mar 2009 | 31 Dec | | | | 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Associates | | | -------------------------------------------------------------------------------- | Trade and other current receivables | 194 | 191 | -------------------------------------------------------------------------------- | Trade and other current liabilities | - | 197 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Companies under management's influence | | | -------------------------------------------------------------------------------- | Trade and other current liabilities | 2 | 1 | -------------------------------------------------------------------------------- Remuneration to key management The key management personnel compensation includes the employee benefits of the members of the Board of Directors and the Corporate Executives1 In 2008, the Executive Board consisted of 7-8 persons. In 2009, the number of Corporate Executives is 12.. -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - 31 Mar | 1 Jan - 31 Mar | | | 2009 | 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Salaries and other short-term employee | 642 | 455 | | benefits | | | -------------------------------------------------------------------------------- | Share-based payments | 91 | 111 | -------------------------------------------------------------------------------- | Total | 733 | 566 | -------------------------------------------------------------------------------- 7. Commitments Minimum lease payments on non-cancellable office facilities and other operating leases are payable as follows: -------------------------------------------------------------------------------- | EUR 1,000 | 31 Mar 2009 | 31 Dec 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Less than one year | 4,014 | 4,234 | -------------------------------------------------------------------------------- | Between one and five years | 12,733 | 12,136 | -------------------------------------------------------------------------------- | More than five years | 3,286 | 3,282 | -------------------------------------------------------------------------------- | Total | 20,034 | 19,652 | -------------------------------------------------------------------------------- The group had no material capital commitments for the purchase of tangible assets as at 31 March 2009 and 31 March 2008. 8. Contingent liabilities -------------------------------------------------------------------------------- | EUR 1,000 | 31 Mar 2009 | 31 Dec 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Bank guarantees | 965 | 1,047 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 9. Key figures -------------------------------------------------------------------------------- | Financial summary | 1 Jan - 31 | 1 Jan - 31 | 1 Jan - 31 Dec | | | Mar 2009 | Mar | 2008 | | | | 2008 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, EUR 1,000 | 17,101 | 19,478 | 84,849 | -------------------------------------------------------------------------------- | Net sales, change % | -12.2 | -0.1 | 3.0 | -------------------------------------------------------------------------------- | Operating profit/loss, EUR | -3,197 | 3,862 | 11,383 | | 1,000 | | | | -------------------------------------------------------------------------------- | Operating profit/loss, | -182.8 | 15.0 | -31.1 | | change % | | | | -------------------------------------------------------------------------------- | Operating profit/loss, as % | -18.7 | 19.8 | 13.4 | | of net sales | | | | -------------------------------------------------------------------------------- | Profit/loss before taxes, | -3,279 | 3,457 | 10,597 | | EUR 1,000 | | | | -------------------------------------------------------------------------------- | Profit/loss before taxes, as | -19.2 | 17.7 | 12.5 | | % of net sales | | | | -------------------------------------------------------------------------------- | Return on equity, % | - | - | 12.8 | -------------------------------------------------------------------------------- | Return on investment, % | - | - | 19.1 | -------------------------------------------------------------------------------- | Equity ratio, % | 59.8 | 70.9 | 67.4 | -------------------------------------------------------------------------------- | Gross investments in | 87 | 381 | 10,919 | | tangible and intangible | | | | | assets, EUR 1,000 1) | | | | -------------------------------------------------------------------------------- | Gross investments in | 0.5 | 2.0 | 12,9 | | tangible and intangible | | | | | assets, as % of net sales | | | | -------------------------------------------------------------------------------- | Capitalisations according to | 1,004 | 1,242 | 4,566 | | IAS 38 to intangible assets | | | | -------------------------------------------------------------------------------- | Research and development | 2,394 | 2,739 | 14,007 | | expenditure, EUR 1,000 | | | | -------------------------------------------------------------------------------- | Research and development | 14.0 | 14.1 | 16.5 | | expenditure, as % of net | | | | | sales | | | | -------------------------------------------------------------------------------- | Order backlog, EUR 1,000 2) | 37,613 | 33,131 | 38,846 | -------------------------------------------------------------------------------- | Average number of employees | 645 | 546 | 606 | | during the period | | | | -------------------------------------------------------------------------------- | Interest-bearing net | 3,546 | -19,404 | -1,083 | | liabilities, EUR 1,000 | | | | -------------------------------------------------------------------------------- | Gearing ratio, % | 8.0 | -40.5 | -2.1 | -------------------------------------------------------------------------------- | 1) Includes acquisition of Axiom Systems in 2008. Gross | | | investments excluding the acquisition were EUR 1,461 | | | thousand which amount to 1.7 percent of net sales. | | -------------------------------------------------------------------------------- | 2) The order book may vary significantly during the | | | financial period. | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Per share data | 1 Jan - 31 | 1 Jan - 31 | 1 Jan - 31 | | | Mar 2009 | Mar 2008 | Dec 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share (EPS), EUR | -0.03 | 0.02 | 0.06 | -------------------------------------------------------------------------------- | EPS diluted, EUR | -0.03 | 0.02 | 0.06 | -------------------------------------------------------------------------------- | Equity per share, EUR | 0.42 | 0.45 | 0.48 | -------------------------------------------------------------------------------- | Dividend per share, EUR | - | - | 0.04 | -------------------------------------------------------------------------------- | Dividend per earnings, % | - | - | 64.6 | -------------------------------------------------------------------------------- | Effective dividend yield, % | - | - | 5.8 | -------------------------------------------------------------------------------- | P/E ratio | - | - | 11.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Adjusted number of shares at the | 107,054,810 | 107,054,810 | 107,054,810 | | end of the period | | | | -------------------------------------------------------------------------------- | - of which the number of | 92,654 | 84,007 | 92,654 | | treasury shares | | | | -------------------------------------------------------------------------------- | Outstanding shares | 106,962,156 | 106,970,803 | 106,962,156 | -------------------------------------------------------------------------------- | Adjusted average number of | 106,962,156 | 106,867,170 | 106,938,539 | | shares during the period | | | | -------------------------------------------------------------------------------- | Average number of shares, | 106,962,156 | 106,867,170 | 106,938,539 | | dilution included | | | | -------------------------------------------------------------------------------- 10. Definition of key figures -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating margin % | = | Operating profit/loss | x 100 | -------------------------------------------------------------------------------- | | | Net sales | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit margin (before | = | Profit/loss before taxes | x 100 | | income taxes) % | | | | -------------------------------------------------------------------------------- | | | Net sales | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on equity % (ROE) | = | Profit/loss | x 100 | -------------------------------------------------------------------------------- | | | Total equity (average during year) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on investment % | = | Profit/loss before taxes + | x 100 | | (ROI) | | financial expenses | | -------------------------------------------------------------------------------- | | | Total equity + interest bearing | | | | | liabilities | | | | | (average during the year) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity ratio % | = | Total equity | x 100 | -------------------------------------------------------------------------------- | | | Statement of financial position | | | | | total - advances received | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gross investments in | = | Gross investments in tangible and | x 100 | | tangible and intangible | | intangible assets | | | assets, as % of net | | | | | sales | | | | -------------------------------------------------------------------------------- | | | Net sales | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Research and development | = | Research and development | x 100 | | expenditure, as % of net | | expenditure | | | sales | | | | -------------------------------------------------------------------------------- | | | Net sales | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gearing ratio % | = | Interest-bearing liabilities - | x 100 | | | | cash and cash equivalents | | -------------------------------------------------------------------------------- | | | Total equity | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share (EPS) | = | Net profit for the financial year | | | | | attributable to equity | | | | | shareholders | | -------------------------------------------------------------------------------- | | | Average number of outstanding | | | | | shares for the financial year | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity per share | = | Equity attributable to the equity | | | | | holders of the parent company | | -------------------------------------------------------------------------------- | | | Adjusted number of outstanding | | | | | shares at balance sheet date | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividend per share | = | Dividend | | -------------------------------------------------------------------------------- | | | Adjusted number of outstanding | | | | | shares at balance sheet date | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 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) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- COMPTEL CORPORATION Board of Directors Additional information: Mr Sami Erviö, President and CEO, tel. +358 9 700 1131 Mr Markku Pirskanen, CFO, tel. +358 40 517 4606 Mr Samppa Seppälä, Director, IR and Corporate Communications, tel. +358 50 568 0533 Distribution: NASDAQ OMX Helsinki Major media |
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