On 28 January 2016, the Board of TEO LT, AB (hereinafter – “Teo” or “the Company”) approved unaudited TEO LT, AB Consolidated Interim Financial Statements, prepared according to International Financial Reporting Standards as adopted by the European Union, for the twelve months period ended 31 December 2015.
Exceptional quarter and improving annual results
Q4 2015 review
- The total revenue increased by 1.4% and reached EUR 54.2 million (EUR 53.4 million a year ago) – the highest quarterly revenue over the last 3 years.
- EBITDA, excluding non-recurring items, increased by 13.9% and amounted EUR 22.4 million (EUR 19.7 million) – the best quarterly EBITDA over the last 2 years.
- Free cash flow amounted to EUR 8.2 million and was by 15.4% lower than during the same period a year ago due to higher investments and increase in amounts receivables.
Full year 2015 review
- The total revenue was growing 3 out of 4 quarters and increased by 1.1% up to EUR 204.6 million (EUR 202.3 million). It is the first time since 2012 that Teo has demonstrated annual revenue increase.
- EBITDA, excluding non-recurring items, was EUR 80.8 million and compared with the year 2014 (EUR 83.1 million) was by 2.9% lower.
- Free cash flow was by 25.5% lower than a year ago and amounted to EUR 30.3 million.
Management comment
Teo strategy to develop a new generation IT and telecommunications business is working – the last quarter of 2015 was exceptional in terms of the best revenue and EBITDA figures over the last couple of years, and annual revenue started to grow.
In the last quarter improved profitability ratios also reflects a particular attention that during 2015 was given to streamlining and efficiency of activities.
In 2015, developing its business Teo continued investing into a next-generation fiber optic network and by the end of the year already 70% (or 854 thousand) of households in Lithuania had the possibility to use the fast broadband access. In total, investments into upgrade and development of network and IT systems amounted to EUR 34.6 million, an increase by 15.7% over the year 2014.
Throughout the year 2015 number of IPTV and broadband Internet customers continued to grow:
- Number of IPTV customers increased by 23.9% and reached 163 thousand.
- Number of broadband Internet customers increased by 5.5% and the total number of broadband connections amounted to 391 thousand, whereof 225 thousand were fiber-optic.
Changing services mix ensured positive revenue dynamics in 2015:
- Stable revenue from Internet, TV and IT growth fully offset declining revenue from retail voice telephony.
- Revenue from IT services and IT equipment sales to business customers was up by 8.9%.
- Revenue from equipment sales to residential customers over the year increased by 2.4 times.
- Revenue from voice transit services remained on the same level as a year ago.
Consistently transforming from traditional telecommunications operator into a new generation IT and telco company, Teo in October 2015 announced about the decision to acquire mobile operator Omnitel.
While preparing for a new company’s development stage, Teo continued to streamline its activities and simplify Group’s structure. In December 2015, subsidiaries Hostex and Hosting were merged into Baltic Data Center.
On 4 January 2016, a milestone for creation of a new generation telco was laid – Teo acquired a 100 per cent stake in Omnitel from TeliaSonera and the joined management team that was formed already in December started to run a new business.
ENCL.:
- TEO LT, AB Consolidated Interim Financial Statements for the nine months period ended 31 December 2015.
- Presentation of TEO LT, AB Group results for the 12 months of 2015.
Darius Džiaugys,
Head of Investor Relations,
tel. +370 5 236 7878
