ISK 1.253 million losses after tax in the period of October to December 2006
EBITDA before real estate sales profit 807 m.kr.
Share of loss and depreciation of Hands Holding ISK 767 million
Foreign currency loss from long-term liabilities ISK 927 million
Real estate sales profit ISK 735 million
Teymi hf. incurred a loss of ISK 1.253 million in the period October to December 2006. Sales in that period amounted to ISK 5.401 million, EBITDA profit ISK 1.542 million, EBIT profit ISK 1.032 million, foreign currency loss from long term liabilities amounted to ISK 927 million, share of loss and impairment of the company's shares in Hands Holding ISK 767 million and real estate sales profit was ISK 735 million.
The period of October to December 2006 marks the first period of which Teymi publishes results following the division of Dagsbrun hf. in Teymi hf. and 365 hf; since the operational division was effected 1 October 2006 as announced on 1 December 2006. Therefore, no comparative amounts are included in the income and cash flow statements. The balance sheet of 1 October 2006 is the opening balance sheet of the company.
Pro-forma information from the income statements of previous quarters; Q4 2005 and Q1, Q2 and Q3 2006 is published in this announcement and the presentation for comparison as appropriate.
Main results:
" Sales amounted to ISK 5.401 million increasing by 18% from Q4 2005 (pro-forma).
" Foreign currency loss from long-term liabilities amounted to ISK 927 million
" Real estate sales profit amounted to ISK 735 million
" Profit before depreciation, interest and taxes (EBITDA) amounted to ISK 1.542 million
" Profit before depreciation, interest and taxes (EBITDA) excluding real estate sales profit amounted to ISK 807 million, increasing by 11% from Q4 2005 (pro-forma).
" Profit before interests and taxes (EBIT) amounted to ISK 1.032 million
" Profit before interests and taxes (EBIT) excluding real estate sales profit amounted to ISK 297 million
" Finance expenses exceeding finance income amounted to ISK 1.558 million
" Share of loss of associates amounted to ISK 798 million
" Loss before tax amounted to ISK 1.324 million
" Income tax amounted to ISK 71 million
" Loss for the period amounted to ISK 1.253 million
" Loss per share amounted to ISK 0,47
" Net cash to operations amounted to ISK 141 million
" The Board of Directors does not intend to propose the payment of any dividends for the year 2006.
Árni Pétur Jónsson, CEO of Teymi
"Our main task in the first quarter of Teymi's existence was to finalise the separation from our predecessors as well as refinancing the company, sale of property, integration of different segments and restructuring in order to sharpen the focus of our operations. Therefore, it is our opinion that the company's EBIDTA results in this first quarter are acceptable. The fluctuation of the ISK proved to be difficult for our operations as the exchange rate index rose significantly in the quarter influencing the company's income statement. However, due to the current exchange rate of the ISK these effects have now receded. We also decided that the impairment of our investment in the associate Hands holding hf. should exceed the calculated share of loss and depreciation of the shares' premium by ISK 300 million.
The year 2007, being the first whole operating year of the company, is exciting. There are many things in the pipeline in telecommunications and IT services. The Group's employees have put a lot of time and effort into preparing the company for new challenges, in order to increase our market share and improve our profitability."
Teymi hf.'s consolidated annual income statement for the period 1 October to 31 December 2006
Financial Reporting Standards
Teymi's consolidated annual income statement is prepared in accordance with International Financial Reporting Standards, IFRS.
Segment reporting
Teymi's operations may be divided in three segments; communications, security services and IT. The communications segment comprises Vodafone, Kall, Mamma and SKO. The security services segment applies to Securitas and the IT segment comprises Kögun, Skýrr and EJS and subsidiaries.
Income Statement
Table: Income Statement Oct-Dec 2006
MISK Oct-Dec 2006
Sales 5.401
Cost of sales (3.708)
GROSS PROFIT 1.693
Other income 782
Operating expenses (1.443)
EBIT 1.032
Net finance costs (1.558)
Share of loss of associates and impairment losses (798)
(LOSS)/PROFIT BEFORE TAXES (1.324)
Income tax 71
(LOSS)/PROFIT FOR THE PERIOD (1.253)
EBITDA 1.542
EBITDA without gain from sale of real estate 807
Operating income amounted to ISK 5.401 million in the period of October to December 2006 increasing from ISK 4.576 million in the same period in 2005 (pro-forma) or by 18%.
The following table shows the development of income from the individual segments of the Group in previous quarters:
Table: Development of income by segments
MISK Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Total 2006
Telecommunication 2.278 2.370 2.671 2.854 2.847 10.742
Security services 413 432 464 535 661 2.092
IT services 1.933 1.981 1.937 1.845 2.184 7.947
Cons. journal entries -48 -61 -126 -187 -291 -665
Total 4.576 4.722 4.946 5.047 5.401 20.116
The communications segment's operating income has increased by 25% between Q4 2005 (pro forma) and Q4 2006. In that same period, the operating income of the security services has increased by 60% and the IT segment shows a growth of 13%.
Profit before interests and depreciations (EBITDA) amounted to ISK 1.542 million including the gain from sale of real estate at ISK 735 million. Overlooking these gains, the EBITDA amounts to ISK 807 million or 14,9% of operating income.
EBITDA per segment per quarter:
Table: Development of EBITDA by segment
MISK Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Total 2006
Telecommunication 461 610 675 724 615 2.624
Security services 26 25 31 44 60 160
IT services 243 274 206 220 190 890
Cons. journal entries -58 -58
Total 730 909 912 988 807 3.616
The decrease in the IT segment's EBITDA is mainly due to the departure of the US Armed Forces from the Keflavik base, impairment of inventories etc. Otherwise the EBIDTA amounts and ratios between quarters are stable or growing, taking into consideration the inevitable seasonal fluctuations in the individual segments' operating environment.
Table: Development of EBITDA ratio between quarters
MISK Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Total 2006
Sales 4.576 4.722 4.946 5.047 5.401 20.116
EBITDA 730 909 912 988 807 3.616
EBITDA % 16,0% 19,3% 18,4% 19,6% 14,9% 18,0%
Table: Development of EBITDA ratio between quarters by segments
Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Total 2006
Telecommunication 20,2% 25,7% 25,3% 25,4% 21,6% 24,4%
Security services 6,3% 5,8% 6,7% 8,2% 9,1% 7,6%
IT services 12,6% 13,8% 10,6% 11,9% 8,7% 11,2%
Finance costs
Finance expenses amounted to ISK 1.558 million in the period October to December 2006. Due to the changes in the financing of the Group, comparative figures will not bee presented. Foreign currency loss from long-term liabilities amounted to ISK 907 million. Refinancing was effected at the end of 2006 resulting in significant decrease of finance costs from those recorded in Q4 2006.
Hands Holding
Teymi hf. owns a 48,7% share of Hands Holding hf. Share of loss of Hands Holding, including depreciation of goodwill amounted to ISK 445 million in the period. In addition, the management decided to depreciate the company's share further by ISK 322 million. The negative result in the income statement thus amounts to ISK 767 million.
Balance Sheet
Table: Balance Sheet 31 December 2006
MISK 31/12 2006 1/10 2006 Changes
Operating assets 4.981 5.475 (494)
Intangible assets 20.064 18.468 1.596
Shares in Hands Holding and receivable 5.303 3.281 2.022
Other fixed assets 1.126 1.216 (90)
Total non-current assets 31.474 28.440 3.034
Inventories 497 575 (78)
Receivables 4.184 5.566 (1.382)
Cash 633 1.116 (483)
Total current assets 5.314 7.257 (1.943)
Total assets 36.788 35.697 1.091
Equity 4.148 5.840 (1.692)
Non-current liabilites 22.208 11.038 11.170
Current liabilities 10.432 18.819 (8.387)
Total liabilities 32.640 29.857 2.783
Total equity and liabilites 36.788 35.697 1.091
The main changes in the Balance Sheet from 1 October 2006 are due to:
" The purchase of Digital Island at ISK 2.050 million, increasing intangible assets and decreasing short term receivables by ISK 1.400 million.
" The company's real estate, at recorded value of close to ISK 1 billion, were sold at the end of the year 2006
" The company increased it's shareholding in Hands holding in the period and recorded share of loss from the associate
" Own shares were purchased for ISK 432 million
" Short-term liabilities converted into long-term liabilities by refinancing of the company
" Foreign currency loss from long-term liabilities amounted to ISK 927 million
Interest bearing liabilities after cash from operations amounted to ISK 27,3 billion at the end of 2006. The equity ratio was 11,3% and the current ratio 0,51 at the end of 2006.
Cash flow
Cash generated to operations amounted to ISK 141 million, investing activities amounted to ISK 1.056 million and cash flow from financing activities amounted to ISK 713 million. Cash and cash equivalents at the end of 2006 amounted to ISK 633 million. Sale of real estate, purchase of broadcasting network and refinancing influenced the balance sheet significantly as well as the cash flow in the period.
Operating plan of 2007
The company's management assumes that Teymi's turnover in 2007 will amount to ISK 21 to 22,5 billion and EBITDA around ISK 4,0 to 4,4 billion which is between 19 and 19,5% EBITDA ratio.
Presentation
A presentation for shareholders and market participants will be held at 8:30 am 16 February 2007 at Teymi's offices, Skutuvogur 2, Reykjavik. Árni Pétur Jónsson CEO and Ólafur Þór Jóhannesson CFO will present the company's annual results and operations.
The presentation will be accessible at the company's website www.teymi.is after the meeting, and at the website OMX Nordic Exchange in Iceland, www.icex.is. The company's annual statements will be accessible at the company's offices in Skutuvogur 2, Reykjavík.
Dividends
The Board of Directors of Teymi does not intend to propose the payment of dividends for 2006.
Endorsement
The Board of Directors of Teymi approved the annual statement for the period of October to December at a board meeting on 15 February 2006. The statements have been audited by the company's auditors without any comments or reservations.
Financial calendar 2007
Financial calendar 2007:
" Q1 2007: 8 May 2007
" Q2 2007: 31 July 2007
" Q3 2007: 31 October 2007
" Q4 and annual results 2007: 31 January 2008
For further information contact:
Árni Pétur Jónsson, CEO
Ólafur Þór Jóhannesson CFO
Tel: + 354 595-5000.
