Panafon Hellenic Telecom Co S.A.
15 November 2000
Interim Results
Continued growth in revenues and profit
Revenues of GRD 148bn - Euro 445m
EBITDA GRD 64bn - Euro 192m
43% EBITDA MARGIN
Panafon Hellenic Telecommunications Company S.A. ('Panafon'), the
leading provider of mobile telecommunications in Greece, announces
continued profitable growth for the six months ended 30 September 2000
(based on International Accounting Standards (IAS).
Panafon's total customer base reached 2,060,000 at the end of
September 2000, a 38.4% increase compared with the end of September
1999, emphasizing Panafon's position as the leading mobile operator in
Greece. The increase in customers was mainly driven by growth in the
prepay segment. Net additions for the six-month period to 30 September
2000 totalled 287,171 out of which 243,311 were prepay.
Panafon's market share reached 38.1% and penetration in the Greek
cellular market reached 51.4% of the population at the period end.
Revenues for the period increased to GRD 148.5bn, a 7.3% increase
compared with the six months to September 1999. Airtime and data
revenue increased significantly to GRD 119.6bn, a 21% increase over
the previous first half of 1999, despite sharp tariff reductions by
26% for contract and 33% for prepay, due to intense commercial
pressures during the period. Airtime and data revenues now account for
81% of total revenue.
Merchandise sales (handset sales) decreased by 24% (from GRD 11.5bn to
GRD 8.8bn for the period), reflecting increased sales of prepay
through connection only packs rather than promotion packs (which
include a handset).
Monthly access revenues decreased from GRD 26.1 billion to GRD 18.0
billion (a 31% decrease), due to the sharp tariff reductions referred
to earlier in this statement.
Data revenues (which include SMS and WAP revenues) increased
significantly to a record GRD 8.9 billion, representing 6% of total
revenue compared with 2% (or GRD 2.9 billion) for the same period last
year, reflecting the success of Panafon's data services and mobile
internet offering.
Internet and leased line revenues almost doubled from GRD 485 million
to GRD 903 million for the six month period.
EBITDA (earnings before interest, tax, depreciation and amortisation)
increased by 7.7% to GRD 64bn, compared with the same period last
year. Income after taxes increased to GRD 30.6bn, up 4.8% compared
with same period last year.
EBITDA and net income margins remained at healthy levels of 43.1% and
20.6% respectively, reflecting productivity improvements and
operational efficiencies.
As anticipated, the increasing proportion of prepay customers, who
traditionally have lower levels of usage, has driven the gross
average revenue per user ('ARPU') to GRD 12,874 for the period,
compared with GRD 17,362 for the six months ended September 1999 and
GRD 15,313 for the twelve months ended March 2000. Data contributed
GRD 970 in gross ARPU terms compared with 454 for the six months ended
September 1999 and GRD 608 for the twelve months ended March 2000, a
114% increase from September 1999 and a 60% increase from March 2000.
Net operating cash flow reached GRD 43bn, demonstrating the company's
unique ability to generate significantly positive cash flows. This
operating cash flow fully funds the aggressive capital expenditure of
GRD 43bn which was almost double the amount of capital expenditure
during the six months to September 1999 and is expected to reach GRD
75bn by March 2001.
George Koronias, CEO of Panafon, commented:
'Our first half financial results demonstrate three things: Panafon's
leadership in the market, significant growth and profitability despite
intense competition and the success of our strategy to expand our
business in data and Internet services. Panafon's significant
investments in its network, cash flow capacity, leadership in a
growing competitive market as well as the distinct synergies developed
with our parent company, Vodafone, are the foundations to the
continued delivery of shareholder value and profitable growth'.
Summary Consolidated Financial Results
CONSOLIDATED IAS FINANCIAL STATEMENTS (unaudited)
April-September 1999/00 2000/01 00/01 Increase
In GRD m In GRD m In Euro m %
Revenues 138,336 148,455 444.5 7.3%
Gross Profit 73,952 79,144 237.0 7.0%
% of Revenues 53.5% 53.3%
EBITDA 59,400 63,947 191.5 7.7%
% of Revenues 42.9% 43.1%
Income before
income taxes 45,453 47,100 141.0 3.6%
% of Revenues 32.9% 31.7%
Income taxes
16,261 16,503 49.4 1.5%
Income after
income taxes 29,192 30,597 91.6 4.8%
% of Revenues 21.1% 20.6%
EPS (in GRD/Euro) 56.96 59.70 0.179 4.8%
Weighted average
common shares
outstanding 512,500,000 512,500,000
Overview:
* Recently Panafon announced its intention to merge with Panafon
Emporiki S.A and Unifon S.A. under a corporate scheme whereby
Panafon will acquire the whole of the issued share capital of both
Panafon Emporiki and Unifon that it does not already own. This
merger will give Panafon direct control of more than 66% of its
customer base, an exclusive extensive nation-wide distribution
network of retail outlets, and significant synergies and economies
of scale. Finally, the merger will further add to Panafon's strong
cash flow structure and generate shareholder value. The merger is
subject to approval from the shareholders' general assembly as well
as clearance from legal and regulatory authorities.
* Also Panafon recently introduced a new innovative prepay product
targeted at the young generation, branded CU. This is the first
product in the market that directly links GSM and Internet.
* During this period, Panafon was the first mobile operator to be
positioned in fixed and mobile Internet with its ISP Panafonet and
its portal Pan.gr offering Internet connectivity, content, WAP
services (GoWap), personalized internet pages (MyPan) and many
other value added services such as Pan.search and Pan.auctions
aiming to exploit the full range of opportunities arising from the
Internet mobile convergence.
* In line with its strategy to provide corporate customers with value
added services and products, Panafon has introduced MVPN, a new
integrated system for the management of a company's
telecommunications needs.
* Panafon has also announced its participation with a 30% stake in
'Business Exchanges', a new B2B company, to be established in co-
operation with EFG EUROBANK ERGASIAS S.A., one of the leading Greek
Banks and HELLAS ON LINE, a major Greek Internet Service Provider.
The new company aims to offer a wide range of products and services
in the field of e-commerce and become Greece's largest B2B service
provider.
* During this period, Panafon and its subsidiary Panafon Services
undertook the project of delivering the Customer Service Center to
Safaricom, one of the biggest mobile GSM network operators in
Kenya. This project reflects Panafon's ability to provide foreign
operators and is in line with Panafon's international expansion
strategy.
* Panafon Services, (Panafon's 100% subsidiary) today announces the
strategic partnership of its subsidiary Panafon Services with
Portal Software Inc., the leading US provider of customer
management and billing software for Internet and emerging, next-
generation services. This partnership is strengthening Panafon
Services' position as an ASP (Applications Service Provider).
* Panafon also announces today the strategic partnership of its
subsidiary Panafon Services with Hewlett Packard. HP will promote
Panafon Services solutions to its world-wide customer base. The two
companies will join forces in developing and marketing ASP
(Application Service Provision), BRS (business recovery service)
and Data Center Services (computer systems operations outsourcing
services). This collaboration is currently focused primarily on
Telecom companies in Eastern Europe, Middle East & Africa. The
agreement will become worldwide in due course.
George Stefanopoulos
Panafon Group Investor Relations Executive, Tel: +301 6160406,
[email protected], website www.panafon.gr
Lulu Bridges,
Tavistock Communications, Tel: +(44) 20 7600 2288
Nicolas Bornozis ,
Capital Link, Tel: + (212) 661 7566
Notes to Editors:
1. Panafon's shares are quoted on the Athens Stock Exchange and its
GDSs are quoted on the London Stock Exchange. The shares began
trading on Monday 7 December 1998.
2. Panafon has 512,500,000 shares in issue.
3. Panafon is a shareholder in:
Panafon Emporiki (previously Panavox) 100.00 per cent
Panafon Services 100.00 per cent
Panafon Multimedia 100.00 per cent
Radio Korassidis Telecom 26.11 per cent
Unifon 19.56 per cent
Mobitel 25.01 per cent
Citicom 11.518 per cent
Ideal Telecom 51.00 per cent (following
completion of all
legal procedures)
4. Panafon was awarded a license to operate a GSM network in Greece
for a period of 20 years in August 1992. The network commenced
operations on 1 July 1993.
5. Panafon's shareholding structure is as follows:
Vodafone Group Plc 55 per cent
France Telecom 3 per cent
Intracom S.A. 10 per cent
Free float 32 per cent
PANAFON listings:
Shares: Athens SE, Reuters PANr.AT. Bloomberg PANF GA. Nominal value
GRD 100. ISIN GRS 307 333 005. SEDOL 556 0349.
GDRs: LSE . Reuters PANq.L. Bloomberg PFH GR, PFHD LI. ISIN US 6981
132 060. SEDOL 556 0361.
Rule 144A: Bloomberg Nasdaq 2250Q US. ISIN US 6981 131 070. SEDOL 230
2629
Indices: FTSE/ASE 20, FTASE, 3.267%. Bloomberg Europe, BE500, .140%.
BBG Eur Telecom, BETELES, 1.190%. BBG Europ Techn, BETECH, 1.237%.
PANAFON HELLENIC TELECOMMUNICATIONS COMPANY S.A. & SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF 30 SEPTEMBER 2000 AND 31 MARCH 2000 (IAS)
30 September 31 March
2000 2000
(In thousands of
Greek Drachma)
ASSETS
Non-Current Assets
Network infrastructure, net 176,689,505 146,725,405
Cellular license, net 18,854,336 19,637,564
Fixed and other assets, net 17,901,645 16,406,547
Trademark 2,937,363 3,154,945
Goodwill 10,535,000 4,484,550
Investments in associates 8,311,301 7,693,047
Investments 1,251,000 1,200,000
Deferred income taxes 232,874 967,397
-------- --------
Total Non-Current Assets 236,713,024 200,269,455
-------- --------
Current Assets
Inventories 2,055,010 3,065,524
Prepaid rent and other
current assets 5,315,013 4,986,664
Accounts receivable, net 56,379,381 42,093,137
Related companies - 331,766
Cash and cash equivalents 940,141 1,044,013
-------- --------
Total Current Assets 64,689,545 51,521,104
-------- --------
TOTAL ASSETS 301,402,569 251,790,559
======== ========
PANAFON HELLENIC TELECOMMUNICATIONS COMPANY S.A. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
30 SEPTEMBER 2000 AND 31 MARCH 2000 (IAS)
30 September 31 March
2000 2000
(In thousands of Greek Drachma)
LIABILITIES & SHAREHOLDERS'
EQUITY
Shareholders' Equity
Share capital 51,250,000 51,250,000
Reserves 12,492,592 12,492,592
Retained earnings 68,894,251 38,297,581
-------- --------
Total Shareholders' Equity 132,636,843 102,040,173
-------- --------
Commitments and Contingencies - -
Long-Term Liabilities
Deferred income taxes 136,552 -
Provision for retirement benefits 787,014 697,584
-------- --------
Total long-term liabilities 923,566 697,584
-------- --------
Current Liabilities
Accounts payable 30,068,181 28,987,046
Short-term borrowings
from related company 70,000,000 63,900,000
Short-term borrowings 1,910,000
Related companies 344,801 -
Taxes other than income 4,308,841 1,972,284
Income taxes payable 20,806,042 20,422,271
Dividends payable 19,001,828 19,013,892
Deferred revenue 11,046,339 8,125,289
Other current liabilities 10,356,128 6,632,020
-------- --------
Total Current Liabilities 167,842,160 149,052,802
-------- --------
Total Liabilities 168,765,726 149,750,386
-------- --------
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY 301,402,569 251,790,559
======== ========
PANAFON HELLENIC TELECOMMUNICATIONS COMPANY S.A. & SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR
THE SIX MONTH PERIODS ENDED 30 SEPTEMBER 2000 AND 1999 (IAS)
30 September 30 September
2000 1999
(In thousands of Greek Drachma
except share numbers
and per share data)
Revenues 148,455,489 138,335,779
Cost of sales (69,314,257) (64,383,408)
-------- --------
Gross profit 79,141,232 73,952,371
Selling, general and
administrative expenses (29,143,673) (24,713,821)
-------- --------
Operating income 49,997,559 49,238,550
Interest Income/(Expense)
Interest income 72,912 34,507
Interest expense (3,037,742) (3,875,095)
-------- --------
Net interest expense 2,964,830 3,840,588
-------- --------
Equity in earnings of associated
companies 67,308 54,860
Income before income taxes 47,100,037 45,452,822
-------- --------
Income tax expense (16,503,367) (16,261,348)
-------- --------
Net income 30,596,670 29,191,474
======== ========
Earnings per share (GRD) 59.70 56.96
======== ========
Weighted average common shares
outstanding (retrospectively
adjusted for the bonus share issue) 512,500,000 512,500,000
======== ========
PANAFON HELLENIC TELECOMMUNICATIONS COMPANY S.A. & SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED 30 SEPTEMBER 2000 AND 1999 (IAS)
30 September 30 September
2000 1999
(In thousands of Greek Drachma)
Net income 30,596,670 29,191,474
Adjustments to reconcile
to net cash provided by
operating activities: 15,644,926 11,773,928
Changes in operating assets
and liabilities:
Accounts receivables (14,888,048) (17,452,085)
Amounts due from related companies 331,766 1,704,417
Inventories 810,514 428,322
Other current assets (328,349) (2,496,482)
Accounts payable 1,081,135 (704,951)
Amounts due to related companies 344,801 (136,443)
Taxes other than income 2,336,557 2,446,964
Income taxes payable 383,771 2,771,057
Dividends paid (12,064) -
Deferred revenue 2,921,050 -
Other current liabilities 3,724,108 9,994,954
-------- --------
Total changes in operating assets
and liabilities (3,294,759) (3,444,247)
Net cash provided by operating
activities 42,946,837 37,521,155
-------- --------
Cash flows from investing activities:
Purchase of investments (8,051,000) -
Dividends received 373,062 -
Capital expenditures (43,382,771) (21,937,949)
-------- --------
Net cash utilized in investing
activities (51,060,709) (21,937,949)
-------- --------
Cash flows from financing activities:
Proceeds/(repayments) of short-term
borrowings 8,010,000 (15,090,000)
-------- --------
Net cash provided by/(utilized in)
financing activities 8,010,000 (15,090,000)
-------- --------
Net increase/(decrease) in cash
and cash equivalents (103,872) 493,206
Cash and cash equivalents at
beginning of period 1,044,013 578,690
-------- --------
Cash and cash equivalents
at end of period 940,141 1,071,896
======== ========