- 133k active ULL customers at the end of May '08
- 27% revenue growth in the 1st quarter '08
- Greece's leading Broadband unbundler with c30% overall market share
- c32% market share in 1Q '08 net ULL activations with 31k net adds
- Emphasis is shifting to Unbundling at the expense of wholesale
- As a result the Company expects that during H2 '08 will turn EBITDA positive
Local Loop Unbundling
Forthnet continued its progress in unbundling with improving overall market share in the ULL market during 1Q '08.
Forthnet ULL Customer Base 1Q '08 4Q '07 3Q '07 2Q '07 1Q '07
New ULL net activations 30,810 33,820 27,300 14,130 1,150
Market Share in New Adds 32% 30% 42% 25% 6%
Total ULL 107,210 76,400 42,580 15,280 1,150
Overall Market Share 30% 28% 26% 16% 3%
Forthnet is the leading unbundler in Greece with a c30%overall market share and c32% in 1Q net adds. Forthnet 2Play continuous its strong uptake, constituting 72% of Forthnet's active ULL subscriber base with monthly ARPU for the 1Q at euro 43 (excl. VAT). Forthnet at the end of May '08 had 133,000 active ULL customers.
As unbundling accelerates the company is moving the emphasis away from wholesale broadband and CPS telephony.
Forthnet Broadband Customer Base 31/03/08 31/12/07 30/09/07 31/03/07
Forthnet Broadband subscribers 216,776 200,346 189,267 127,971
Quarterly net additions 16,429 11,089 26,427 26,908
Forthnet active ULL subs 107,210 76,400 42,580 1,150
The number of broadband customers at the end of March stood at 217k customers.
The ULL focus rather than wholesale broadband or CPS services is expected to lead, faster than expected, to the improvement in the financial performance of the Company. As a result the Company expects that it will turn EBITDA positive during the second half of '08.
In an effort to increase further its appeal to the consumer market, Forthnet is expanding the retail network of Forthnet branded shops. In May '08, the number of Forthnet Broadband shops, through mainly franchised stores was 74. This number is expected to grow to 100 by year end.
During the 1st quarter of '08, Forthnet reported total revenues of euro 33.6m recording a 27% growth for the quarter, driven by ULL Broadband customers and services.
Consolidated 1Q '08 Revenues
Revenue Breakdown (in '000 euro) 1Q '08 1Q '07 % change
Direct Retail Services 10,962 52 20955.3%
Indirect Retal Services 11,524 17,396 -33.8%
Business Services & Applications 11,127 9,034 23.2%
Total Revenues 33,613 26,482 26.9%
Direct Retail Services (ULL revenue) is the key growth driver of the Company, while demand for Broadband, 2play and other ULL services, is expected to remain strong.
Key Results (in '000 euro)
1Q '08 1Q '07
Turnover 33,613
26,482
Reported EBITDA -7,917
-5,830
Stock Option Plan valuation -6,449 -493
Adjusted EBITDA for Stock Option Plan -1,468
-5,337
Pre-tax Loss -16,257
-9,715
Adjusted Pre-tax Loss for Stock Option Plan -9,808
-9,222
Losses after tax and minority rights -12,542
-7,393
Capital Expenditures 18,411
8,434
The 1st quarter results were affected by a non-recurring and non-cash item relating to the valuation of the Company's stock option plan amounting to euro 6.4m. The remaining cost of the Company's 2006-2012 employee stock option plan was recognized in Q1 '08 without affecting the cash and/or equity position of the Company.
Adjusted EBITDA for the period was loss-making at euro 1.5m, against a loss of euro 5.3m in Q1 '07. Adjusted pre-tax losses stood at euro 9.8m compared to euro 9.2m in Q1 '07. Capital Expenditure for the 1st quarter reached euro 18.4m against euro 8.4m in '07 as the Company is accelerating the execution of its announced investment plan.
Collocation sites and Forthnet backbone network
To date, OTE has delivered 152 Exchanges corresponding to a footprint of c65% local loop coverage whilst the Company is already offering its ULL services through 141 Exchanges. Over the next months the remaining local exchanges will become operational. Finally, the Company has achieved the majority of the planned Network Capex .
This announcement may not be released distributed or otherwise published, directly or indirectly, in or into the United States, Australia, Canada or Japan. This announcement and the information contained herein does not contain or constitute an offer for sale, or solicitation of an offer to purchase shares in the Company, in the United States, Australia, Canada or Japan or any other jurisdiction where such an offer or solicitation would be unlawful.
This announcement is being distributed only to and is directed only at (a) persons outside the United Kingdom, (b) persons who have professional experience in matters relating to investments, i.e. investment professionals within the meaning of the Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended ("the Order"), and (c) high net worth companies, unincorporated associations and other bodies to whom it may otherwise lawfully be communicated in accordance with Article 49(2)(a) to (d) of the Order (all such persons together being referred to "as relevant persons"). Any person who is not a relevant person should not act or rely on this announcement or any of its contents