Earnings Release • Feb 28, 2007
Earnings Release
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Corporate | 28 February 2007 07:49
QSC posts strong revenue and profitability growth in 2006
QSC AG / Preliminary Results
Release of a Corporate-announcement, transmitted by DGAP - a company of
EquityStory AG.
The issuer is solely responsible for the content of this announcement.
QSC posts strong revenue and profitability growth in 2006
Cologne, February 28, 2007. According to preliminary results, QSC grew its
revenues by 35 percent during the past fiscal year to € 262.5 million, as
opposed to € 194.4 million the year before. The company posted its
strongest growth in business with wholesale partners and resellers. Here,
revenues grew by a strong 115 percent to € 65.4 million, boosted also by
the successful marketing launch of DSL lines through wholesale partners
like HanseNet and freenet. Strong growth also characterized the Large
Account and Business Customer segments; in 2006, revenues with large
accounts rose by 27 percent to € 65.5 million, revenues with business
customers were up by 31 percent to € 75.5 million. During the past fiscal
year, QSC was generating nearly 80 percent of its revenues in its three
strategic segments of Large Accounts, Business Customers and
Wholesale/Resellers.
This significantly higher revenue quality produced strong improvements in
profitability, as shown by the preliminary results. QSC grew its EBITDA to
€ 21.0 million, as opposed to € 5.8 million in 2005. The company’s net loss
improved to € -6.7 million, as opposed to € -18.2 million in 2005. In
consequence of the continuing profitability improvement, QSC generated its
first quarterly net income of € 1.4 million in the fourth quarter of 2006;
revenues for the same period totaled € 83.1 million, EBITDA € 9.3 million.
This strong and profitable growth is based upon QSC’s existing nationwide
Next Generation Network and upon its broadband infrastructure on the last
mile. QSC further expanded its network in 2006, upgrading it with ADSL2+
technology. As a result of high upfront expenses for new large customers,
resellers and wholesale partners as well as the start of the network
expansion in cooperation with TELE2, capital expenditures totaled € 42.7
million, as opposed to € 20.1 million in 2005. Plusnet that was formed as a
joint network operating company together with TELE2 in the summer of 2006
will be expanding the DSL network from more than 1,000 central offices to
nearly 2,000 central offices by year-end. It will then be operating one of
the largest DSL networks in Germany. This network expansion has been fully
funded through the € 50-million capital contribution by Plusnet’s
co-shareholder TELE2. During the current fiscal year, QSC plans to invest a
total of between € 60 and € 70 million in network expansion and for
contract-related upfront expenses for enterprise customers.
This network expansion will open up further growth potential to QSC in its
three strategic segments. The company is thus anticipating revenues of more
than € 350 million in 2007, as well as further strong profitability
improvements. For 2007, QSC expects its EBITDA to reach between € 50 and €
60 million, along with a net income of between € 15 and € 25 million.
Preliminary results in € million Q4 2006 Q4 2005 2006 2005
Net revenues 83.1 53.1 262.5 194,4
Network expenses* 59.3 37.8 180.4 143.7
Gross profit 23.8 15.3 82.1 50.7
EBITDA 9.3 0.8 21.0 5.8
Net income (loss) +1,4 -4,4 -6.7 -18.2
Capital expenditures 16.3 6.2 42.7 20.1
Net liquid assets on December 31 - - 108.0 52.1
Workforce on December 31 - - 675 450
*exclusive of depreciation and non-cash compensation
The full annual report will be available on March 29, 2007, at
http://www.qsc.de/en/investor_relations/index.html.
Queries to:
QSC AG
Arne Thull
Investor Relations
Fon: +49(0)221-6698-724
Fax: +49(0)221-6698-009
E-mail: [email protected]
Notes:
This corporate news contains forward-looking statements pursuant to the US
'Private Securities Litigation Act' of 1995. These forward-looking
statements are based on current expectations and forecasts of future events
by the management of QSC AG. Due to risks or mistaken assumptions, actual
results may deviate substantially from those made in such forward-looking
statements. The assumptions that may involve material deviations due to
unforeseeable developments include, but are not limited to, the demand for
our products and services, the competitive situation, the development,
dissemination and technical performance of DSL technology and its prices,
the development and dissemination of alternative broadband technologies and
their respective prices, changes in respect of telecommunications
regulation, legislation and adjudication, prices and timely availability of
essential third-party services and products, the timely development of
additional marketable value-added services, the ability to maintain and
enlarge upon marketing and distribution agreements and to conclude new
marketing and distribution agreements, the ability to obtain additional
financing in the event that management’s planning targets are not attained,
the punctual and full payment of outstanding debts by sales partners and
resellers of QSC AG, and the availability of sufficient skilled personnel.
Language: English
Issuer: QSC AG
Mathias-Brüggen-Straße 55
50829 Köln Deutschland
Phone: +49 (0)221 66 98-112
Fax: +49 (0)221 66 98-009
E-mail: [email protected]
WWW: www.qsc.de
ISIN: DE0005137004
WKN: 513700
Indices: TecDAX
Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin-Bremen, Hannover, Düsseldorf, München, Stuttgart
End of News DGAP News-Service
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