GROWTH IN DNA’S NET SALES AND PROFIT
SUMMARY
April–June 2012
• Net sales increased to EUR 191.5 million (178.7 million) year-on-year. This growth was fuelled in particular by terminal device sales, an increase in the number of mobile subscriptions, added value services and the 2011 Forte acquisition.
• EBITDA increased to EUR 49.6 million (47.3 million), or 25.9 per cent of net sales. The increase was due to higher sales volumes and reduced terminal subventions.
• Operating profit increased to EUR 17.2 million (12.1 million), or 9.0 per cent (6.8 per cent) of net sales.
• The mobile communication subscription base grew 9.8 per cent from the end of the comparable period, reaching 2,376,000 in total (2,163,000).
o Revenue per user (ARPU) for mobile communications amounted to EUR 20.2 (20.7).
o Mobile communication subscription turnover rate (CHURN) was 13.5 per cent (15.1 per cent).
• Due to the fall in the number of telephone subscriptions, DNA’s fixed-line subscription base fell to 1,034,000 (1,036,000) subscriptions (telephone, broadband and cable television) from the end of the comparable period.
January–June 2012
• Net sales increased to EUR 378.1 million (351.9 million) year-on-year. This growth was fuelled by similar factors to those in the second quarter.
• EBITDA decreased to EUR 88.2 million (97.2 million), or 23.3 per cent of net sales (27.6 per cent). The decline was due to higher network, service, personnel and marketing costs in the first quarter, as well as a provision recognised in the quarter due to cooperation negotiations.
Key figures
Figures are unaudited.
|
EUR million
|
4-6/2012
|
4-6/2011
|
1-6/2012
|
1-6/2011
|
|
Net sales
|
191.5
|
178.7
|
378.1
|
351.9
|
|
EBITDA
|
49.6
|
47.3
|
88.2*
|
97.2
|
|
- % of net sales
|
25.9
|
26.5
|
23.3*
|
27.6
|
|
Depreciation
|
32.4
|
35.2
|
63.6
|
70.7
|
|
Operating profit
|
17.2
|
12.1
|
24.6*
|
26.4
|
|
- % of net sales
|
9.0
|
6.8
|
6.5*
|
7.5
|
|
Profit before tax
|
14.9
|
11.2
|
20.7*
|
24.6
|
|
Profit/loss for the financial period
|
11.8
|
8.3
|
16.1*
|
18.1
|
|
Return on investment (ROI), %**
|
8.8
|
6.7
|
6.3*
|
7.0
|
|
Return on equity (ROE), %**
|
9.4
|
5.5
|
5.7*
|
5.8
|
|
Investments
|
36.6
|
27.4
|
60.1
|
45.4
|
|
Cash flow after investments***
|
21.6
|
7.3
|
12.7
|
33.2
|
|
Net debt, EUR million
|
|
|
276.7
|
124.4
|
|
Net debt/EBITDA
|
|
|
1.57
|
0.64
|
|
Gearing, %
|
|
|
54.3
|
20.5
|
|
Equity ratio, %
|
|
|
52.4
|
64.0
|
|
Personnel at the end of period
|
|
|
1,529
|
1,009
|
*includes a EUR 2.5 million provision due to cooperation negotiations
**adjusted to 12 months
***includes business combinations and financial lease agreements
CEO’s review
We improved our ability to compete
DNA’s net sales for April-June increased to EUR 191.5 million (178.7 million) and EBITDA to EUR 49.6 million (47.3 million). Profit grew by 42 per cent to EUR 17.2 million (12.1 million). This growth was mainly fuelled by terminal device sales, the Forte acquisition a year ago as well as the increased sales volume for added value services. The mobile communication subscription turnover rate (CHURN) improved and came to 13.5 per cent (15.1 per cent).
We renewed our business structure during the spring to streamline operations, improving our operational efficiency and competitiveness in a business environment that requires ever growing agility and efficiency. Some effects of these changes can already be seen in this quarter, as we have cut some costs which we will continue doing.
While improving our operational efficiency, we have strengthened our customer service function. At the end of June, we acquired a customer service entity from GoExcellent, an outsourcing partner that has served us for the past five years. The number of DNA personnel increased by some 480 employees. This business transfer helps us to provide better customer service, clarify our operations and increase our cost-efficiency.
Our terrestrial TV network was completed in full on 20 June, as the TV transmitter in Palomäki, Kouvola, was switched on. Today, our network covers some 85 per cent of households and provides, among other entertainment, the popular DNA Welho pay-TV channel offering, with a number of high definition channels.
Quickly evolving terminal devices, fast networks and new viewing habits will modify the market rapidly in the near future. We acquired a 20 per cent share in Booxmedia in June, and launched close cooperation with the company. We have introduced a new service with Booxmedia, enabling our customers to view and store selected television content on their smart phones and tablets.
We expect the economic situation in Finland and Europe to remain turbulent. However, the impact of the weakening economic situation will be slow and post-cyclical in the telecommunications market. The competitive situation remains tight.
Our outlook for 2012 remains unchanged. The Group’s financial position should remain good in 2012 and net sales are expected to grow. EBITDA (in euros) and operating profit are forecast to be slightly lower than in 2011; however, the restructuring of operations in March-May will improve these figures further.
Riitta Tiuraniemi
Additional information (20 July from 11 am onwards):
Riitta Tiuraniemi, President and CEO, DNA Ltd, tel. +358 44 044 1000, riitta.tiuraniemi (a) dna.fi
DNA Corporate Communications, tel. + 358 44 044 8000, viestinta (a) dna.fi
DNA Ltd’s Interim Report January−June 2012 (online report)