Financial Results
for the First Quarter of 2004
Highlights – First Quarter of 2004
On 2 January 2004 Arunas Siksta took the office of General Manager of Lietuvos
Telekomas.
In February, a new management structure of Lietuvos Telekomas was approved
and implemented as of 1 April 2004.
UAB Comliet, a subsidiary of Lietuvos Telekomas, transferred its
telecommunication service implementation and maintenance activities to Lietuvos
Telekomas as of 1 April 2004. UAB Comliet considers sell off of its construction
business.
UAB Verslo Portalas, joint venture of Lietuvos Telekomas and Verslo Zinios, will
terminate its activities and will be liquidated.
UAB Lintel and UAB Lintkom, both being members of Lietuvos Telekomas’ Group,
have started reorganisation process. UAB Lintkom will be merged into UAB Lintel.
AB Lietuvos Telekomas’ Shareholders
60.00%
7.93%4.67%
27.40%Amber Teleholding A/S
State of Lithuania
Treasury stocks
Other shareholders
Amber Teleholding A/S is a fully owned subsidiary of TeliaSonera AB.
During January – March 2004 State of Lithuania reduced its shareholding from 8.12% to 7.93% by giving shares of the Company to the citizens of Lithuania as a compensation for realty redeemable by the State of Lithuania.
As of 31 March 2004 112,203,890 shares of the Company (13.77% of the total share capital) were represented by 11,220,389 GDRs of AB Lietuvos Telekomas.
UAB Lintkom, a member of Lietuvos Telekomas’ Group, holds treasury stocks.
(as of 31 March 2004)
Structure of Lietuvos Telekomas’ Group
AB Lietuvos Telekomas(fixed-line telephony, data communication, fixed-line network, wholesales and Internet-related services)
UAB Voicecom (VoIP services)
UAB Lintkom* (treasury stocks)
UAB Lintel* (directory inquiry, telemarketing and contact center services)
UAB Lietuvos Telekomo Verslo Sprendimai (‘business solutions’ to largest customers)
UAB Comliet (telecommunications and low voltage network’s construction services)
UAB TietoEnator Consulting (IT-related consultancy services)
UAB Verslo Portalas** (B2B portal)
UAB Baltijos Informaciniu Duomenu Valdymo Centras (IT infrastructure services)
100 % Baltic Data Center SIA
55% Telegrupp AS
75 % Datu Tikli SIA
95 % Comliet-Kaliningrad
100 % UAB Sonex KomunikacijosVsI Lietuvos Telekomo Sporto
Klubas (sports club)
100%
100%
100%
100%
60%
60%
30%
26%
100%
* company under reorganisation; ** company under liquidation
Fixed-line Telephony Services
Number of main lines in service
826
893
859
836828
780
800
820
840
860
880
900
Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004
Th
ou
san
ds
During January – March 2004 number of main lines decreased by just 2.5 thousand.
Tariffs for long-distance calls during peak time reduced by 35% to 0.26 litas and for subscribers to the new payment plan Miestai (Cities) even down to 0.12 litas.
The Company improved its Local and Country payment plans by providing subscribers with additional 30 hours of free-of-charge calls during off-peak time.
Compared with Q1 2003, local calls’ traffic in Q1 2004 was up by 11%, long-distance up by 19%, fixed to mobile up by 42%.
Internet-related Services
Number of ADSL access points
23,699
16,50914,289
12,371
28,984
1,386
1,795
1,007
592
255
0
5,000
10,000
15,000
20,000
25,000
30,000
Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004
WholesalesRetail
In the first quarter of 2004 the Company launched a new dial-up Internet access payment plan, Internet, that offers 30 hours per month for just 10 litas.
At the end of March the number of Internet payment plan users was 12.5 thousand and total number of dial-up Internet access service users was 40.6 thousand.
DSL service users were offered a new voice communication over the Internet service.
Key Financial Figures – First Quarter of 2004
Group, according to IFRS, unaudited
Revenue amounted to LTL 185 million, a decrease by 9.4%, year–on-year.
Operating expenses, including additional employee redundancy costs of LTL 7
million, were cut down by 2.5% to LTL 99 million, y-o-y.
EBITDA amounted to LTL 86 million and EBITDA margin was 46.2%. Underlying
EBITDA (excluding employee redundancy costs) was 50%.
Profit before profit tax was LTL 6 million and net profit was LTL 4 million.
During the quarter net cash flow from operating activities was LTL 60 million.
Due to repayment of loans cash and cash equivalents decreased by LTL 50 million.
Investments amounted to LTL 11 million.
Profit (Loss) Statement (in million of litas)
Group, according to IFRS, unaudited
Revenue 184.9 204.0 -9.4%
Operating expenses -99.4 -102.2 -2.8%
EBITDA 85.5 101.7 -15.9%
EBITDA margin 46.2% 49.9%
Depreciation and amortisation -76.6 -90.0 -14.9%
Operating profit (EBIT) 8.9 11.7 -23.6%
EBIT margin 4.8% 5.7%
Financial activities, net -3.4 -8.0 -57.4%
Profit before profit tax 5.7 3.8 47.9%
Net profit 4.0 2.0 95.4%
Net profit margin 2.1% 1.0%
Earnings per share (LTL) 0.005 0.003 95.4%
Q1 2004 Q1 2003 Change
Reclassified Breakdown of Revenue (in million of litas)
Group, according to IFRS, unaudited
Fixed-line Telephony Services 141.8 164.4 -13.7%
Internet and Data Communication Services 31.3 29.1 7.3%
Other Services 11.8 10.4 13.1%
Total 184.9 204.0 -9.4%
Q1 2004 Q1 2003 Change
In the fourth quarter of 2003, Lietuvos Telekomas has adjusted its revenue grouping following the latest standard used by TeliaSonera AB. Revenue from ISDN services were moved from the Internet and Data Communication Services group and Contact Centre services (Inquiry service 118, Operator-assisted services) from the Other Services group to the Fixed-line Telephony Services group.
Revenue, EBITDA and EBITDA margin (in million of litas)
Group, according to IFRS, unaudited
Revenue by quarters
EBITDA & EBITDA margin
207197204204
185
0
50
100
150
200
Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004
8910096102 86
43.0%
46.2%
50.6%
47.0%
49.9%
0
50
100
150
200
Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004
30%
35%
40%
45%
50%
55%
60%
In first quarter of 2004, the Company had additional employee redundancy costs of LTL 7 million.
Cash Flow and Net Debt (in million of litas)
Group, according to IFRS, unaudited
Cash Flow
Net Debt/EquityNet Debt
60
78
100
51
6862
0
20
40
60
80
100
120
Q1 2002 Q1 2003 Q1 2004
Net cash fromoperating activities
Net cash beforefinancing activities
26
70
115
178
2242%
6%
10%
15%18%
0
50
100
150
200
250
300
Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004
- 10%
0%
10%
20%
Net debt
Net debt toequity ratio(Gearing)
In March, the Company redeemed its LTL 150 million Eurobond issue.
During the quarter cash and cash equivalents decreased by LTL 50 million.
Investments and Network Digitalisation
Network Digitalisation, in total
Group’s Investments in million of litas
1110
16
14
11
0
2
4
6
8
10
12
14
16
Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 88.5%
63.0%
47.4%
38.0%
91.3%
0%
20%
40%
60%
80%
100%
Q1 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004
On 31 March 2004, total number of ISDN channels was 39.1 thousand, total number of ADSL access points was 30.8 thousand and number of MPLS VPN access points was 809.
Employees
Number of Lietuvos Telekomas’ Group employees at the end of the period
Main lines per employee in the core business at the end of the period
3,5863,6934,0644,1403,353
281300
275261271
0
2,000
4,000
6,000
Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004
50
100
150
200
250
300
More information about Lietuvos Telekomas’ Group is available on the web page:
www.telecom.lt