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TELECOM ARGENTINA SA — Interim / Quarterly Report 2004
Nov 12, 2004
31224_ffr_2004-11-12_820e575e-4120-4b1c-bbe2-0649bd6742b6.zip
Interim / Quarterly Report
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6-K 1 d6k.htm REPORT OF FOREIGN ISSUER Report of Foreign Issuer
Table of Contents
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of November, 2004
Commission File Number: 001-13464
Telecom Argentina S.A.
(Translation of registrants name into English)
Alicia Moreau de Justo, No. 50, 1107
Buenos Aires, Argentina
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes No X
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes No X
Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes No X
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
Table of Contents
Telecom Argentina S.A.
TABLE OF CONTENTS
| Item | |
|---|---|
| 1. | Press Release, dated November 10, 2004, entitled, Telecom Argentina S.A. Announces Consolidated Nine-Month Period (9M04) and Third Quarter (3Q04) Results for Fiscal Year 2004. |
Table of Contents
FOR IMMEDIATE RELEASE
Market Cap: P$5,9 billion
(November 10, 2004)
| Contacts: | |
|---|---|
| Pedro Insussarry | Marlene Wechselblatt |
| Pablo Caride | Golin/Harris International |
| Telecom Argentina | (212) 373-6037 |
| (54-11) 4968-3627/3626 |
TELECOM ARGENTINA S.A. ANNOUNCES
CONSOLIDATED NINE-MONTH PERIOD (9M04)
AND THIRD QUARTER (3Q04) RESULTS
**FOR FISCAL YEAR 2004 ***
MAJOR EVENTS AND DEVELOPMENTS
During 9M04 the following results were recorded:
Ø Net Revenues amounted to P$3,211MM (+ P$500 MM or +18% vs. 9M03) mainly due to the expansion of the mobile business.
Ø Operating Profit amounted to P$208 MM (+P$184 MM vs. 9M03).
Ø Net loss of P$491 MM (P$ -1,270 MM vs 9M03) as a consequence of negative financial and holding results mainly due to higher interest and currency exchange losses.
Shareholders Equity amounted to P$677 MM (-P$919 MM or -58% vs. 9M03).
Net Financial Debt as of September 30, 2004 reached P$7,127 MM (-P$427 MM or -6%vs. 9M03).
Ø The Ratio Net Financial Debt / Operating Profit before Depreciation and Amortization decreased to 4.8x (from 5.2x as of September 30, 2003).
The operations of the Company are still being influenced by the pesification and freeze of regulated tariffs. Additionally, the results of the Company continue to be highly impacted by the fluctuation of the exchange rate of the Peso vs the Dollar and the Euro.
| As of September 30 — 2004 | 2003 | D $ | D % | |||
|---|---|---|---|---|---|---|
| Consolidated net revenues (in MM P$) | 3.211 | 2.711 | 500 | 18 % | ||
| Fixed Telephony | 1.998 | 1.890 | 108 | 6 % | ||
| Cellular | 1.205 | 817 | 388 | 47 % | ||
| Directories edition | 8 | 4 | 4 | 100 % | ||
| Operating Profit before D&A (in MM P$) | 1.482 | 1.447 | 35 | 2 % | ||
| Operating Profit (in MM P$) | 208 | 24 | 184 | 767 % | ||
| Net income/(Loss) (in MM P$) | (491 | ) | 779 | (1.270 | ) | -163 % |
| Shareholders equity (in MM P$) | 677 | 1.596 | (919 | ) | -58 % | |
| Net financial debt (in MM P$) | 7.127 | 7.554 | (427 | ) | -6 % | |
| CAPEX (in MM P$) | 250 | 54 | 196 | 363 % | ||
| Lines in service (Fixed lines -In thousands) | 3.750 | 3.623 | 127 | 4 % | ||
| Cellular customers (in thousands) | 3.833 | 2.944 | 889 | 30 % | ||
| Telecom Personal | 3.375 | 2.425 | 950 | 39 % | ||
| Núcleo (Paraguay) | 458 | 519 | (61 | ) | -12 % | |
| ADSL Total lines (in thousands) | 111 | 62 | 49 | 79 % | ||
| Arnet subscribers (in thousands) | 226 | 194 | 32 | 16 % | ||
| Dial-up | 156 | 154 | 2 | 1 % | ||
| ADSL | 70 | 40 | 30 | 75 % | ||
| Fixed traffic (in MM minutes) | 12.250 | 11.801 | 449 | 4 % | ||
| Incoming/Outgoing cellular traffic (in MM minutes) | 2.573 | 1.809 | 764 | 42 % | ||
| Average Revenue per user (ARPU ) Fixed Telephony (in P$) | 39 | 40 | (1 | ) | -3 % | |
| Average Revenue per user (ARPU ) Cellular Telephony (in P$) | 35 | 30 | 4 | 14 % |
- Non-financial data unaudited.
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Buenos Aires, November 10, 2004 Telecom Argentina (BASE: TECO2, NYSE: TEO), one of Argentinas largest telecommunications companies, announced today a consolidated net loss of P$491 million for the nine-month period ended September 30, 2004 (9M04). Comparatively, consolidated net income for the nine-month period ended September 30, 2003 (9M03) was P$779 million. Consolidated net loss for third quarter of fiscal year 2004 (3Q04) was P$261 million . Comparatively, consolidated net income for 3Q03 was P$509 million.
Earnings/loss per share and ADR for 9M04 amounted to P$(0.50) and P$(2.49) , respectively. Earnings per share/loss and ADR for 9M03, were P$0.79 and P$3.96 , respectively. Earnings/loss per share and ADR for 3Q04 amounted to P$(0.27) and P$(1.33) , respectively. In comparison, earnings/loss per share and ADR for 3Q03, were P$(0.52) and P$(2.59) , respectively.
Operating profit before depreciation and amortization, operating profit/(loss) and net income/(loss) for 9M04 represented, 46%, 6% and (15%) of net sales, respectively; compared with 53%, 1% and 29%, respectively, for 9M03. Operating profit before depreciation and amortization, operating profit/(loss) and net income/(loss) for 3Q04 represented, 44%, 7% and (23%) of net sales, respectively; compared with 52%, 3% and (53%), respectively, for 3Q03.
Company Activities
Evolution of Consolidated Net Revenues
(9M04 vs. 9M03 comparison)
Consolidated net revenues for 9M04 totaled P$3,211 million, an increase of P$500 million, or 18%, compared with P$2,711 million for 9M03. The increase can be largely attributed to the increase in demand, particularly in the cellular business in Argentina and in the Internet.
Fixed Telephony
In fixed telephony operations, local measured service revenues increased by P$19 million, or 5%, to P$377 million during 9M04. Domestic long distance revenues increased by P$7 million, or 2%, reaching P$322 million. Revenues from both local and domestic long distance telephony increased due to higher traffic.
Total traffic volume (Local and DLD), measured in minutes, increased by 4%.
Monthly charges increased by P$23 million, or 5%, to P$471 million for 9M04, mainly due to the increase in customer lines. Customer lines as of September 30, 2004 increased to approximately
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3,453,000, due to the recovery in demand, compared to approximately 3,328,000 as of September 30, 2003. However, the current level of lines in service is still 4% lower than before the economic crisis (December 2001). Moreover, monthly charges remained stable after the pesification and freeze enforced by the Argentine Government in January 6, 2002.
Revenues generated by interconnection services increased by P$31 million, or 26%, to P$150 million, mainly due to the increase of traffic transported by the fixed and cellular networks.
Regarding the international telephony activities during 9M04, revenues reached P$158 million increasing by P$2 million or 1%, mainly due to higher traffic.
Internet and Data Transmission
Revenues generated by the data transmission business totaled P$251 million, representing an increase of P$4 million, or 2%, mainly due to higher Internet traffic and to the increase in monthly fees charged to other operators of wholesale services for ADSL and dial-up connections, partially off-set by lower prices for data transmission services. As of September 30, 2004 total lines in service with ADSL connections amounted to 111,000, an increase of 49,000, or 79%, compared to approximately 62,000 as of September 30, 2003. Internet minutes represented 33% of total traffic measured in minutes transported over the fixed-line network.
Internet revenues from the Arnet unit increased by P$13 million, or 30%, to P$57 million, mainly due to a higher number of subscribers in ADSL high-speed accesses. As of September 30, 2004, the number of Arnets ADSL subscribers reached approximately 70,000, while Internet dial-up customers reached approximately 156,000, increasing by 75% and 1%, respectively.
Cellular Telephony
The revenues generated by the cellular business during 9M04 increased by P$388 million, or 47%, to P$1,205 million.
Revenues of Telecom Personal in Argentina increased by P$378 million, or 54%, to P$1,084 million, mainly due to the higher number of subscribers, to the increase in outgoing and incoming traffic, and to the increase in sales of
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handsets as a consequence of the increase in the demand for cellular services and the development of the GSM network.
Furthermore, the average revenue per user increased by 14% (to P$35 per customer, including revenues for TLRD or termination of calls coming from other cellular operators). Likewise, total cellular traffic increased by 42%.
Total cellular subscribers of Telecom Personal in Argentina reached approximately 3,375,000 at September 30, 2004, representing an increase of approximately 950,000 customers, or 39%.
Since the beginning of this fiscal year, the level of competition in the cellular market has increased significantly after the launch of GSM services. Accordingly, Telecom Personal continued to increase the coverage and capacity of its GSM network and has continued its marketing campaigns and promotions aimed to reposition its brand and strengthen its market leadership.
The customer base as of September 30, 2004 amounted to approximately 2,568,000 prepaid subscribers, representing 76% of the total customer base, and approximately 807,000 postpaid subscribers, representing the remaining 24%. These percentages were 82% and 18% respectively as of September 30, 2003.
Núcleo, Telecom Personals subsidiary that provides cellular services in Paraguay, generated P$121 million in revenues during 9M04, which are consolidated into the mobile telephony business together with the revenues of Telecom Personal. Nucleos 9M04 revenues represented an increase of P$10 million, or 9%.
As of September 30, 2004, Núcleo had approximately 458,000 customers, a decrease of approximately 12% due to the loss of dormant prepaid customers whose elimination from Nucleos customer base was ordered by the Paraguayan regulatory authority.
Directories
In the telephone directories publishing business, revenues from the affiliated company Publicom increased by P$4 million to P$8 million during 9M04 due to higher sales of advertising space in Paginas Amarillas directories and the launch of several new special directories.
Evolution of Operating Costs
The cost of services provided, administrative expenses and selling expenses for 9M04 increased by P$316 million, or 12%, to P$3,003 million, mainly due to the increase in commissions for handset sales, cost of handsets, TLRD costs, in labor, materials and supplies, and advertising
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expenses. The evolution of costs is mainly related to the increase in sales and increasing competition in the mobile telephony business.
Salaries and social security contributions increased by P$71 million, or 20%, to P$434 million primarily due to the increase in headcount in Telecom Argentina as a consequence of the addition since October 1, 2003 of employees previously employed by third parties and whose costs were previously accounted for under Services Fees. Additionally, labor cost rose as a consequence of the increase in salaries granted during the second semester of last year. As of September 30, 2004, the headcount totaled 14,263, compared to 12,882 as of September 30, 2003.
The allowance for doubtful accounts decreased by P$18 million, or 95%, to P$1 million. This positive evolution was related to the improvement in the levels of collection and the recovery of past due accounts mainly in the fixed telephony business.
Sales commissions increased by P$54 million, or 79%, to P$122 million for 9M04, as a consequence of higher commissions paid for new customers and higher sales of cellular prepaid cards.
Costs related to advertising increased by P$48 million, or 300%, to P$64 million for 9M04. This increase was mainly due to higher media advertising expenses for the Internet and cellular businesses.
In the cellular telephony business, TLRD costs, which have been accounted since mid-2003, reached P$90 million. Additionally, in 9M04 the cost of cellular handsets increased by P$145 million reaching P$150, million mainly due to the increase in handsets sales as a consequence of the cellular business growth after the launch of GSM service.
Depreciation of fixed and intangible assets decreased by P$149 million, or 10%, to P$1,274 million during 9M04 as a consequence of the end of the amortization period of certain assets.
Financial and Holding Results
The loss resulting from financial and holding results reached P$622 million for 9M04 as compared to a gain of P$529 million in 9M03. The difference can be largely attributed to a decrease of P$935 million relating to net currency exchange differences. The gap was a consequence of the effect that the appreciation of the Argentine Peso against the Dollar and the EURO had on the financial debt of the Company during the 9M03 that was reversed in 9M04. Moreover, the depreciation of the Argentine Peso against the Dollar and the EURO during 9M04 prompted additional currency exchange losses.
Other Expenses
Other expenses (net) decreased by P$69 million, or 50%, to P$69 million for the 9M04 mainly as a result of lower severance payments and lower provisions for lawsuits.
Cash flow and Net Financial Debt
Net Debt (Loans minus Cash and Banks plus Investments) decreased by P$427 million, or 6%, to P$7,127 million for 9M04 compared with 9M03 (P$7,554 million), as a consequence of the cash flow generation of the company partially offset by accrued interest and exchange rate differences.
Investments
Of the total amount of P$250 million invested during 9M04, P$73 million, or 29%, corresponds to fixed-line telephony, data transmission and Internet, and P$177 million or 71% to the cellular business as Telecom Personal continues with the deployment of its GSM network.
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Note : Materials and supplies not included
Other Matters
Debt Restructuring
On August 23, 2004 Telecom Argentina announced that it had achieved 94.47% participation in its Acuerdo Preventivo Extrajudicial , ( APE ) solicitation process launched on June 22, 2004.
The APE was filed with the courts in Argentina on October 21 st , 2004.
Telecom Argentina cannot predict the timing of the court approval for its APE but expects to complete its APE process and issue the new notes and pay the cash consideration contemplated in the APE in the first half of 2005.
Additionally, Telecom Personal announced on October 6, 2004 that it had achieved 100% participation in its Acuerdo Preventivo Extrajudicial ( APE ) solicitation process. Given this strong participation and support from its creditor base, Telecom Personal is pursuing an out-of-court restructuring without seeking court approval of the APE . Telecom Personal expects to end its restructuring before the end of this fiscal year.
Telecom is the parent company of a leading telecommunications group in Argentina, where it offers directly or through its controlled subsidiaries local and long distance fixed-line telephony, cellular, PCS, data transmission, and Internet services, among other services. Additionally, through a controlled subsidiary the Telecom Group offers cellular services in Paraguay. The Company commenced operations on November 8, 1990, upon the Argentine Governments transfer of the telecommunications system in the northern region.
Nortel Inversora S.A. (Nortel), which acquired the majority of the Company from the Argentine government, holds 54.74% of Telecoms common stock. Nortel is a holding company where the common stock (approximately 68% of capital stock) is owned by Sofora Telecomunicaciones S.A.. Additionally, the capital stock of Nortel is comprised of preferred shares that are held by minority shareholders.
On September 30, 2004, Telecom had 984,380,978 shares outstanding.
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For more information, please contact Financial
Planning & Investor Relations Department:
Pedro Insussarry
54-11-4968-3743
Moira Colombo
54-11-4968-3628
Gastón Urbina
54-11-4968-3627
Mensajes: 54-11-4968-3627
Fax: 54-11-4313-5842
For information about Telecom Group services visit:
www.telecom.com.ar
www.telecompersonal.com.ar
www.arnet.com.ar
epymes.com.ar
www.highway.arnet.com.ar
www.paginasamarillas.com.ar
Disclaimer
This document may contain statements that could constitute forward-looking statements, including, but not limited to the Companys expectations for its future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity and capital structure; the outcome of its debt restructuring process; the impact of emergency laws enacted by the Argentine Government; and the impact of rate changes and competition on the Companys future financial performance. Forward looking statements may be identified by words such as believes, expects, anticipates, projects, intends, should, seeks, estimates, future or other similar expressions. Forward-looking statements involve risks and uncertainties that could significantly affect the Companys expected results. The risks and uncertainties include, but are not limited to, uncertainties concerning the outcome of the court proceedings relating to the debt restructuring, the impact of emergency laws enacted by the Argentine Government which have resulted in the repeal of Argentinas Convertibility law, the devaluation of the peso, various changes in restrictions on the ability to exchange pesos into foreign currencies, and currency transfer policy generally, the pesification of tariffs charged for public services, the elimination of indexes to adjust rates charged for public services and the Executive branch announcement to renegotiate the terms of the concessions granted to public service providers, including Telecom. Due to extensive changes in laws and economic and business conditions in Argentina, it is difficult to predict the impact of these changes on the Companys financial condition. Other factors may include, but are not limited to, the current and on-going recession in Argentina, growing inflationary pressure and reduction in consumer spending and the outcome of certain legal proceedings. Readers are cautioned not to place undue reliance on forward looking statements, which speak only as the date of this document. The Company undertakes no obligation to release publicly the results of any revisions to forward looking statements which may be made to reflect events and circumstances after the date of this press release, including, without limitation, changes in the Companys business or to reflect the occurrence of unanticipated events. Readers
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are encouraged to consult the Companys Annual Report and Form 20-F as well as periodic filings made on Form 6-K, which are filed with or furnished to the United States Securities and Exchange Commission for further information concerning risks and uncertainties faced by Telecom.
(Financial tables follow)
Alberto Messano
Director
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TELECOM ARGENTINA S.A.
Consolidated information
NINE MONTH PERIOD AND THIRD QUARTER- FISCAL YEAR 2004 .
(In millions of Argentine pesos, except statistical data )
1- Consolidated Balance Sheet
| Sep-30 2004 | Dec-31 2003 | D $ | D % | ||
|---|---|---|---|---|---|
| Cash, equivalents and investments | 3.624 | 2.467 | 1.157 | 47 % | |
| Trade receivables | 599 | 581 | 18 | 3 % | |
| Other current assets | 193 | 136 | 57 | 42 % | |
| TOTAL CURRENT ASSETS | 4.416 | 3.184 | 1.232 | 39 % | |
| Fixed & Intangible assets | 7.841 | 8.846 | (1.005 | ) | -11 % |
| Other non-current assets | 259 | 240 | 19 | 8 % | |
| TOTAL NON - CURRENT ASSETS | 8.100 | 9.086 | (986 | ) | -11 % |
| TOTAL ASSETS | 12.516 | 12.270 | 246 | 2 % | |
| Accounts payable | 507 | 451 | 56 | 12 % | |
| Loans | 10.726 | 9.996 | 730 | 7 % | |
| Reserves | 25 | 15 | 10 | 67 % | |
| Other current liabilities | 207 | 222 | (15 | ) | -7 % |
| TOTAL CURRENT LIABILITIES | 11.465 | 10.684 | 781 | 7 % | |
| Loans | 25 | 86 | (61 | ) | -71 % |
| Reserves | 226 | 210 | 16 | 8 % | |
| Other non-current liabilities | 70 | 69 | 1 | 1 % | |
| TOTAL NON - CURRENT LIABILITIES | 321 | 365 | (44 | ) | -12 % |
| TOTAL LIABILITIES | 11.786 | 11.049 | 737 | 7 % | |
| Minority Interest | 30 | 32 | (2 | ) | -6 % |
| Temporary differences from transaltion | 23 | 21 | 2 | 10 % | |
| Shareholders equity | 677 | 1.168 | (491 | ) | -42 % |
| TOTAL LIABILITIES AND EQUITY | 12.516 | 12.270 | 246 | 2 % |
2- Consolidated Loans
| Sep-30 2004 | Dec-31 2003 | D $ | D % | ||
|---|---|---|---|---|---|
| Corporate Bonds | 4.943 | 4.912 | 31 | 1 % | |
| Banks | 1.737 | 1.638 | 99 | 6 % | |
| On purchase of fixed assets and inventories | 2.642 | 2.595 | 47 | 2 % | |
| Accrued interest | 1.194 | 747 | 447 | 60 % | |
| Penalties or default interest | 210 | 104 | 106 | 102 % | |
| TOTAL CURRENT LOANS | 10.726 | 9.996 | 730 | 7 % | |
| Banks | 25 | 86 | (61 | ) | -71 % |
| TOTAL NON - CURRENT LOANS | 25 | 86 | (61 | ) | -71 % |
| TOTAL LOANS | 10.751 | 10.082 | 669 | 7 % |
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3- Consolidated Income Statement
Nine - Month Comparison
| Sep-30 — 2004 | 2003 | D $ | D % | ||||
|---|---|---|---|---|---|---|---|
| Net revenues | 3.211 | 2.711 | 500 | 18 % | |||
| Cost of services provided | (2.153 | ) | (1.929 | ) | (224 | ) | 12 % |
| GROSS PROFIT | 1.058 | 782 | 276 | 35 % | |||
| Administrative expenses | (184 | ) | (182 | ) | (2 | ) | 1 % |
| Selling expenses | (666 | ) | (576 | ) | (90 | ) | 16 % |
| OPERATING (LOSS)/PROFIT | 208 | 24 | 184 | 767 % | |||
| Net financial & holding results | (622 | ) | 529 | (1.151 | ) | -218 % | |
| Debt Restructuring Results | | 375 | (375 | ) | -100 % | ||
| Other incomes & expenses | (69 | ) | (138 | ) | 69 | -50 % | |
| RESULTS FROM ORDINARY OPERATIONS | (484 | ) | 792 | (1.276 | ) | -161 % | |
| Taxes on income | (9 | ) | | (9 | ) | | |
| Minority interest | 2 | (13 | ) | 15 | -115 % | ||
| NET (LOSS)/INCOME | (491 | ) | 779 | (1.270 | ) | -163 % | |
| Operating (Loss)/Profit before D&A | 1.482 | 1.447 | 35 | 2 % | |||
| As a % of Net Revenues | 46 | % | 53 | % | |||
| Consolidated Income Statement | |||||||
| Three - Month Comparison | |||||||
| Sep-30 | |||||||
| 2004 | 2003 | D $ | D % | ||||
| Net revenues | 1.141 | 961 | 180 | 19 % | |||
| Cost of services provided | (770 | ) | (685 | ) | (85 | ) | 12 % |
| GROSS PROFIT | 371 | 276 | 95 | 35 % | |||
| Administrative expenses | (59 | ) | (45 | ) | (14 | ) | 31 % |
| Selling expenses | (236 | ) | (200 | ) | (36 | ) | 18 % |
| OPERATING (LOSS)/PROFIT | 76 | 31 | 45 | 147 % | |||
| Net financial & holding results | (324 | ) | (490 | ) | 166 | -34 % | |
| Debt Restructuring Results | | 1 | (1 | ) | -100 % | ||
| Other incomes & expenses | (14 | ) | (52 | ) | 38 | -73 % | |
| RESULTS FROM ORDINARY OPERATIONS | (263 | ) | (508 | ) | 245 | -48 % | |
| Taxes on income | (1 | ) | | (1 | ) | | |
| Minority interest | 3 | (1 | ) | 4 | -400 % | ||
| NET (LOSS)/INCOME | (261 | ) | (509 | ) | 248 | -49 % | |
| Operating (Loss)/Profit before D&A | 499 | 504 | (5 | ) | -1 % | ||
| As a % of Net Revenues | 44 | % | 52 | % |
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4- Consolidated Statement of Cash Flow
Nine - Month Comparison
| Sep-30 — 2004 | 2003 | D $ | D % | ||||
|---|---|---|---|---|---|---|---|
| Net income | (491 | ) | 779 | (1.270 | ) | -163 % | |
| Depreciation and Amortization | 1.274 | 1.423 | (149 | ) | -10 % | ||
| Increase in provisions | 59 | 21 | 38 | 181 % | |||
| (Increase)/decrease in assets | (163 | ) | (297 | ) | 134 | 45 % | |
| (Decrease)/increase in liabilities | 19 | 233 | (214 | ) | -92 % | ||
| Others, net | 774 | (781 | ) | 1.555 | 199 % | ||
| Total Funds generated by Operating Activities | 1.472 | 1.378 | 94 | 7 % | |||
| Total Funds applied to Investing Activities | (112 | ) | (285 | ) | 173 | 61 % | |
| Increase in financial debt, net | (6 | ) | (8 | ) | 2 | 25 % | |
| Debt Restructuring Results | (421 | ) | 421 | -100 % | |||
| Interests and financial expenses | (12 | ) | (332 | ) | 320 | 96 % | |
| Total Funds applied to Financing Activities | (18 | ) | (761 | ) | 743 | 98 % | |
| Increase/(decrease) of Funds | 1.342 | 332 | 1.010 | 304 % | |||
| Consolidated Statement of Cash Flow | |||||||
| Three - Month Comparison | |||||||
| Sep-30 | |||||||
| 2004 | 2003 | D $ | D % | ||||
| Net income | (261 | ) | (509 | ) | 248 | 49 % | |
| Depreciation and Amortization | 423 | 473 | (50 | ) | -11 % | ||
| Increase in provisions | (3 | ) | 5 | (8 | ) | -160 % | |
| (Increase)/decrease in assets | (69 | ) | (67 | ) | (2 | ) | -3 % |
| (Decrease)/increase in liabilities | 25 | 75 | (50 | ) | -67 % | ||
| Others, net | 418 | 617 | (199 | ) | -32 % | ||
| Total Funds generated by Operating Activities | 533 | 594 | (61 | ) | -10 % | ||
| Total Funds applied to Investing Activities | (51 | ) | (258 | ) | 207 | 80 % | |
| Increase in financial debt, net | (4 | ) | (3 | ) | (1 | ) | -25 % |
| Debt Restructuring Results | | | (2 | ) | -29 % | ||
| Interests and financial expenses | (5 | ) | (4 | ) | (1 | ) | -33 % |
| Total Funds applied to Financing Activities | (9 | ) | (7 | ) | (2 | ) | -29 % |
| Increase/(decrease) of Funds | 473 | 329 | 144 | 44 % |
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5- Consolidated Revenues Breakdown
Nine - Month Comparison
| Sep-30 — 2004 | 2003 | D $ | D % | ||
|---|---|---|---|---|---|
| Fixed Telephony | 1.532 | 1.443 | 89 | 6 % | |
| Measured service | |||||
| Local | 377 | 358 | 19 | 5 % | |
| DLD | 322 | 315 | 7 | 2 % | |
| Monthly charges | 471 | 448 | 23 | 5 % | |
| Public telephones | 128 | 126 | 2 | 2 % | |
| Interconnection | 150 | 119 | 31 | 26 % | |
| Others | 84 | 77 | 7 | 9 % | |
| International Telephony | 158 | 156 | 2 | 1 % | |
| Data transmission | 251 | 247 | 4 | 2 % | |
| Data transmission Services | 116 | 145 | (29 | ) | -20 % |
| Monthly charges & Internet Traffic | 119 | 95 | 24 | 25 % | |
| Others | 16 | 7 | 9 | 129 % | |
| Internet | 57 | 44 | 13 | 30 % | |
| Cellular Telephony | 1.205 | 817 | 388 | 47 % | |
| Telecom Personal | 1.084 | 706 | 378 | 54 % | |
| Monthly fee and measured service | 230 | 185 | 45 | 24 % | |
| Pre-paid card | 248 | 177 | 71 | 40 % | |
| Calling Party Pays | 270 | 227 | 43 | 19 % | |
| TLRD * | 98 | 34 | 64 | 188 % | |
| Others | 238 | 83 | 155 | 187 % | |
| Núcleo | 121 | 111 | 10 | 9 % | |
| Monthly fee and measured service | 26 | 26 | | 0 % | |
| Pre-paid card | 43 | 26 | 17 | 65 % | |
| Calling Party Pays | 31 | 37 | (6 | ) | -16 % |
| TLRD * | 12 | 11 | 1 | 9 % | |
| Others | 9 | 11 | (2 | ) | -18 % |
| Telephone Directories (Publicom) | 8 | 4 | 4 | 100 % | |
| TOTAL NET REVENUES | 3.211 | 2.711 | 500 | 18 % | |
| Consolidated Revenues Breakdown | |||||
| Three - Month Comparison | |||||
| Sep-30 | |||||
| 2004 | 2003 | D $ | D % | ||
| Fixed Telephony | 524 | 503 | 21 | 4 % | |
| Measured service | |||||
| Local | 131 | 128 | 3 | 2 % | |
| DLD | 110 | 111 | (1 | ) | -1 % |
| Monthly charges | 160 | 151 | 9 | 6 % | |
| Public telephones | 44 | 42 | 2 | 5 % | |
| Interconnection | 52 | 49 | 3 | 6 % | |
| Others | 27 | 22 | 5 | 23 % | |
| International Telephony | 53 | 54 | (1 | ) | -2 % |
| Data transmission | 89 | 81 | 8 | 10 % | |
| Data transmission Services | 39 | 45 | (6 | ) | -13 % |
| Monthly charges & Internet Traffic | 46 | 33 | 13 | 39 % | |
| Others | 4 | 3 | 1 | 33 % | |
| Internet | 21 | 16 | 5 | 31 % | |
| Cellular Telephony | 452 | 305 | 147 | 48 % | |
| Telecom Personal | 414 | 264 | 150 | 57 % | |
| Monthly fee and measured service | 88 | 68 | 20 | 29 % | |
| Pre-paid card | 92 | 63 | 29 | 46 % | |
| Calling Party Pays | 96 | 85 | 11 | 13 % | |
| TLRD * | 40 | 18 | 22 | 122 % | |
| Others | 98 | 30 | 68 | 227 % | |
| Núcleo | 38 | 41 | (3 | ) | -7 % |
| Monthly fee and measured service | 9 | 9 | | 0 % | |
| Pre-paid card | 15 | 11 | 4 | 36 % | |
| Calling Party Pays | 8 | 7 | 1 | 14 % | |
| TLRD * | 4 | 11 | (7 | ) | -64 % |
| Others | 2 | 3 | (1 | ) | -33 % |
| Telephone Directories (Publicom) | 2 | 2 | | 0 % | |
| TOTAL NET REVENUES | 1.141 | 961 | 180 | 19 % |
- Charges for the temination of calls of the cellular operators.
12
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6- Consolidated Income Statement by Activities
Nine-month period - FY 2004 (01/01/04 - 09/30/04)
(In million of Argentine pesos )
| Activities — Fixed Telephony | Cellular Telephony | Publishing Directories | Consolidated Activities | Variation vs 1H03 — D $ | D % | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| NET REVENUES | 1.998 | 1.205 | 8 | 3.211 | 500 | 18 % | |||||
| Salaries and social security contributions | (363 | ) | (64 | ) | (7 | ) | (434 | ) | (71 | ) | 20 % |
| Taxes | (106 | ) | (109 | ) | (1 | ) | (216 | ) | (27 | ) | 14 % |
| Materials and supplies | (131 | ) | (23 | ) | (2 | ) | (156 | ) | (48 | ) | 44 % |
| Allowance for doubtful accounts | 8 | (9 | ) | | (1 | ) | 18 | -95 | |||
| Settlement charges | (60 | ) | | | (60 | ) | (3 | ) | 5 % | ||
| Interconnection cost | (101 | ) | | | (101 | ) | (1 | ) | 1 % | ||
| Lease of lines and circuits | (25 | ) | (2 | ) | | (27 | ) | 9 | -25 % | ||
| Service fees | (41 | ) | (13 | ) | (1 | ) | (55 | ) | 20 | -27 % | |
| Advertising | (19 | ) | (43 | ) | (2 | ) | (64 | ) | (48 | ) | 300 % |
| Sales commissions | (14 | ) | (108 | ) | | (122 | ) | (54 | ) | 79 % | |
| Others | (130 | ) | (363 | ) | | (493 | ) | (260 | ) | 112 % | |
| Operating (Loss)/Profit before D&A | 1.016 | 471 | (5 | ) | 1.482 | 35 | 2 % | ||||
| Operating (Loss)/Profit before D&A Margin | 51 | % | 39 | % | 63 | % | 46 | % | (0 | ) | -14 % |
| Depreciation of fixed assets | (958 | ) | (234 | ) | (2 | ) | (1.194 | ) | 148 | -11 % | |
| Amortization of intangible assets | (46 | ) | (33 | ) | (1 | ) | (80 | ) | 1 | -1 % | |
| OPERATING RESULTS | 12 | 204 | (8 | ) | 208 | 184 | 767 % | ||||
| Interest on assets | 37 | 18 | 1 | 56 | 95 | -244 % | |||||
| Interest on liabilities | (522 | ) | (156 | ) | | (678 | ) | (1.246 | ) | -219 % | |
| FINANCIAL AND HOLDING INCOME | (485 | ) | (138 | ) | 1 | (622 | ) | (1.151 | ) | -218 % | |
| DEBT RESTRUCTURING INCOME | | | | | (375 | ) | -100 % | ||||
| OTHER INCOMES AND EXPENSES | (61 | ) | (11 | ) | (1 | ) | (73 | ) | 65 | -47 % | |
| INCOME FROM ORDINARY OPERATIONS | (530 | ) | 55 | (9 | ) | (484 | ) | (1.276 | ) | -161 % | |
| Taxes on income | | (12 | ) | 3 | (9 | ) | (9 | ) | | ||
| Minority interest | | 2 | | 2 | 15 | -115 % | |||||
| NET (LOSS)/INCOME | (530 | ) | 45 | (6 | ) | (491 | ) | (1.270 | ) | -163 % |
Consolidated Income Statement by Activities
Nine-month period FY 2003 (01/01/03 - 09/30/03)
(In million of Argentine pesos )
| Activities — Fixed Telephony | Cellular Telephony | Publishing Directories | Consolidated Activities | |||||
|---|---|---|---|---|---|---|---|---|
| NET REVENUES | 1.890 | 817 | 4 | 2.711 | ||||
| Salaries and social security contributions | (304 | ) | (54 | ) | (5 | ) | (363 | ) |
| Taxes | (112 | ) | (77 | ) | | (189 | ) | |
| Materials and supplies | (83 | ) | (23 | ) | (2 | ) | (108 | ) |
| Allowance for doubtful accounts | (4 | ) | (11 | ) | (4 | ) | (19 | ) |
| Settlement charges | (57 | ) | | | (57 | ) | ||
| Interconnection cost | (100 | ) | | | (100 | ) | ||
| Lease of lines and circuits | (22 | ) | (14 | ) | | (36 | ) | |
| Service fees | (65 | ) | (9 | ) | (1 | ) | (75 | ) |
| Advertising | (9 | ) | (7 | ) | | (16 | ) | |
| Sales commissions | (17 | ) | (51 | ) | | (68 | ) | |
| Others | (103 | ) | (129 | ) | (1 | ) | (233 | ) |
| Operating (Loss)/Profit before D&A | 1.014 | 442 | (9 | ) | 1.447 | |||
| Operating (Loss)/Profit before D&A Margin | 54 | % | 54 | % | -225 | % | 53 | % |
| Depreciation of fixed assets | (1.094 | ) | (245 | ) | (3 | ) | (1.342 | ) |
| Amortization of intangible assets | (47 | ) | (34 | ) | | (81 | ) | |
| OPERATING RESULTS | (127 | ) | 163 | (12 | ) | 24 | ||
| Interest on assets | (19 | ) | (30 | ) | 10 | (39 | ) | |
| Interest on liabilities | 342 | 224 | 2 | 568 | ||||
| FINANCIAL AND HOLDING INCOME | 323 | 194 | 12 | 529 | ||||
| DEBT RESTRUCTURING INCOME | 280 | 90 | 5 | 375 | ||||
| OTHER INCOMES AND EXPENSES | (88 | ) | (40 | ) | (10 | ) | (138 | ) |
| INCOME FROM ORDINARY OPERATIONS | 388 | 407 | (3 | ) | 792 | |||
| Taxes on income | | | | | ||||
| Minority interest | | (13 | ) | | (13 | ) | ||
| NET (LOSS)/INCOME | 388 | 394 | (3 | ) | 779 |
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7- Consolidated Income Statement by Activities
Three-month period FY 2004 (06/30/04 - 09/30/04)
(In million of Argentine pesos )
| Activities — Fixed Telephony | Cellular Telephony | Publishing Directories | Consolidated Activities | Variación vs 3Q03 — D $ | D % | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| NET REVENUES | 687 | 452 | 2 | 1.141 | 180 | 19 % | |||||
| Salaries and social security contributions | (123 | ) | (23 | ) | (2 | ) | (148 | ) | (13 | ) | 10 % |
| Taxes | (36 | ) | (39 | ) | | (75 | ) | (11 | ) | 17 % | |
| Materials and supplies | (53 | ) | (6 | ) | | (59 | ) | (20 | ) | 51 % | |
| Allowance for doubtful accounts | 2 | (2 | ) | 1 | 1 | 7 | -117 % | ||||
| Settlement charges | (21 | ) | | | (21 | ) | (1 | ) | 5 % | ||
| Interconnection cost | (35 | ) | | | (35 | ) | 5 | -13 % | |||
| Lease of lines and circuits | (9 | ) | (1 | ) | | (10 | ) | 3 | -23 % | ||
| Service fees | (17 | ) | (8 | ) | | (25 | ) | (2 | ) | 9 % | |
| Advertising | (8 | ) | (15 | ) | (2 | ) | (25 | ) | (17 | ) | 213 % |
| Sales commissions | (5 | ) | (41 | ) | | (46 | ) | (19 | ) | 70 % | |
| Others | (46 | ) | (153 | ) | | (199 | ) | (117 | ) | 143 % | |
| Operating (Loss)/Profit before D&A | 336 | 164 | (1 | ) | 499 | (5 | ) | -1 % | |||
| Operating (Loss)/Profit before D&A Margin | -1 | % | -2 | % | 4 | % | -1 | % | (1 | ) | -103 % |
| Depreciation of fixed assets | (315 | ) | (80 | ) | (1 | ) | (396 | ) | 51 | -11 % | |
| Amortization of intangible assets | (15 | ) | (11 | ) | (1 | ) | (27 | ) | (1 | ) | 4 % |
| OPERATING RESULTS | 6 | 73 | (3 | ) | 76 | 45 | 145 % | ||||
| Interest on assets | 68 | 10 | | 78 | 6 | 8 % | |||||
| Interest on liabilities | (334 | ) | (68 | ) | | (402 | ) | 160 | -28 % | ||
| FINANCIAL AND HOLDING INCOME | (266 | ) | (58 | ) | | (324 | ) | 166 | -34 % | ||
| DEBT RESTRUCTURING INCOME | | | | | (1 | ) | -100 % | ||||
| OTHER INCOMES AND EXPENSES | (23 | ) | 5 | | (18 | ) | 34 | -65 % | |||
| INCOME FROM ORDINARY OPERATIONS | (279 | ) | 20 | (4 | ) | (263 | ) | 245 | -48 % | ||
| Taxes on income | | (3 | ) | 2 | (1 | ) | (1 | ) | | ||
| Minority interest | | 3 | | 3 | 4 | -400 % | |||||
| NET (LOSS)/INCOME | (279 | ) | 20 | (2 | ) | (261 | ) | 248 | -49 % |
Consolidated Income Statement by Activities
Three-month period FY 2003 (06/30/03 - 09/30/03)
(In million of Argentine pesos )
| Activities — Fixed Telephony | Cellular Telephony | Publishing Directories | Consolidated Activities | |||||
|---|---|---|---|---|---|---|---|---|
| NET REVENUES | 654 | 305 | 2 | 961 | ||||
| Salaries and social security contributions | (113 | ) | (20 | ) | (2 | ) | (135 | ) |
| Taxes | (38 | ) | (26 | ) | | (64 | ) | |
| Materials and supplies | (29 | ) | (9 | ) | (1 | ) | (39 | ) |
| Allowance for doubtful accounts | 1 | (4 | ) | (3 | ) | (6 | ) | |
| Settlement charges | (20 | ) | | | (20 | ) | ||
| Interconnection cost | (40 | ) | | | (40 | ) | ||
| Lease of lines and circuits | (9 | ) | (4 | ) | | (13 | ) | |
| Service fees | (20 | ) | (3 | ) | | (23 | ) | |
| Advertising | (5 | ) | (3 | ) | | (8 | ) | |
| Sales commissions | (5 | ) | (22 | ) | | (27 | ) | |
| Others | (35 | ) | (47 | ) | | (82 | ) | |
| Operating (Loss)/Profit before D&A | 341 | 167 | (4 | ) | 504 | |||
| Operating (Loss)/Profit before D&A Margin | 52 | % | 55 | % | -200 | % | 52 | % |
| Depreciation of fixed assets | (363 | ) | (83 | ) | (1 | ) | (447 | ) |
| Amortization of intangible assets | (15 | ) | (11 | ) | | (26 | ) | |
| OPERATING RESULTS | (37 | ) | 73 | (5 | ) | 31 | ||
| Interest on assets | 64 | 7 | 1 | 72 | ||||
| Interest on liabilities | (479 | ) | (83 | ) | | (562 | ) | |
| FINANCIAL AND HOLDING INCOME | (415 | ) | (76 | ) | 1 | (490 | ) | |
| DEBT RESTRUCTURING INCOME | 1 | | | 1 | ||||
| OTHER INCOMES AND EXPENSES | (43 | ) | (10 | ) | 1 | (52 | ) | |
| INCOME FROM ORDINARY OPERATIONS | (494 | ) | (13 | ) | (1 | ) | (508 | ) |
| Taxes on income | | | | | ||||
| Minority interest | | (1 | ) | | (1 | ) | ||
| NET (LOSS)/INCOME | (494 | ) | (14 | ) | (1 | ) | (509 | ) |
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8- Ratios
| Liquidity | 09/30/2004 — 0,4 | 12/31/2003 — 0,3 | |
|---|---|---|---|
| Consolidated Financial Indebtedness (*) | 10,5 | 6,5 | |
| Total Consolidated Indebtedness | 16,7 | 9,2 | |
| Return on equity (**) | (0,4 | ) | 2,0 |
(*) Financial indebtedness = (Loans - Cash, equiv. & Investments) / ShareholdersEquity.
(**) Return on equity = Profit from ordinary operations / (Shareholders Equity - net income for the period).
9- Statistical Data
| FIXED TELEPHONY | |||||||
|---|---|---|---|---|---|---|---|
| 30-Sep-04 | 30-Sep-03 | ||||||
| TELECOM | Acumul. | 9m | 3m | Acumul. | 9m | 3m | |
| (1) | (1) | ||||||
| Installed lines | 3.800.672 | 587 | -738 | 3.800.604 | (1.860 | ) | 304 |
| Lines in service (1) | 3.749.964 | 94.105 | 49.342 | 3.622.749 | 32.465 | 44.192 | |
| Customer lines | 3.453.026 | 91.685 | 43.765 | 3.327.514 | 33.562 | 42.444 | |
| Public telephony lines | 83.286 | 3.159 | 1.875 | 79.446 | (366 | ) | 86 |
| Digitalization (%) | 100 | 0 | 100 | 100 | 0 | 100 | |
| Fixed lines in service per 100 inhabitants (northern region) | 19,9 | 0 | 0 | 19,4 | 0,0 | 0,2 |
(1) Includes direct inward dialing numbers connected to digital trunk lines
15
Table of Contents
TELECOM ARGENTINA S.A.
Unconsolidated Information
NINE MONTH PERIOD AND THIRD QUARTER- FISCAL YEAR 2004 .
(In millions of Argentine pesos)
10- Balance Sheet
| Sep-30 2004 | Dec-31 2003 | ||||
|---|---|---|---|---|---|
| D $ | D % | ||||
| Cash, equivalents and investments | 3.126 | 2.028 | 1.098 | 54 % | |
| Trade receivables | 337 | 317 | 20 | 6 % | |
| Other current assets | 48 | 119 | (71 | ) | -60 % |
| TOTAL CURRENT ASSETS | 3.511 | 2.464 | 1.047 | 42 % | |
| Fixed & Intangible assets | 6.331 | 6.552 | (221 | ) | -3 % |
| Other non-current assets | 210 | 980 | (770 | ) | -79 % |
| TOTAL NON-CURRENT ASSETS | 6.541 | 7.532 | (991 | ) | -13 % |
| TOTAL ASSETS | 10.052 | 9.996 | 56 | 1 % | |
| Accounts payable | 263 | 243 | 20 | 8 % | |
| Loans | 8.730 | 8.206 | 524 | 6 % | |
| Reserves | 10 | 10 | | 0 % | |
| Other current liabilities | 157 | 166 | (9 | ) | -5 % |
| TOTAL CURRENT LIABILITIES | 9.160 | 8.625 | 535 | 6 % | |
| Compensation and social benefits payable | 31 | 30 | 1 | 3 % | |
| Others liabilities | 34 | 34 | | 0 % | |
| Reserves | 150 | 139 | 11 | 8 % | |
| TOTAL NON-CURRENT LIABILITIES | 215 | 203 | 12 | 6 % | |
| TOTAL LIABILITIES | 9.375 | 8.828 | 547 | 6 % | |
| Shareholders equity | 677 | 1.168 | (491 | ) | -42 % |
| TOTAL LIABILITIES AND EQUITY | 10.052 | 9.996 | 56 | 1 % |
11- Income Statement
Nine -Month Comparison
| 30-Sep — 2004 | 2003 | D $ | D % | ||||
|---|---|---|---|---|---|---|---|
| Net revenues | 2.105 | 1.975 | 130 | 7 % | |||
| Cost of services provided | (1.445 | ) | (1.486 | ) | 41 | 3 % | |
| GROSS PROFIT | 660 | 489 | 171 | 35 % | |||
| Administrative expenses | (111 | ) | (101 | ) | (10 | ) | -10 % |
| Selling expenses | (429 | ) | (431 | ) | 2 | 0 % | |
| OPERATING (LOSS)/PROFIT | 120 | (43 | ) | 163 | 379 % | ||
| Equity income from related companies | (70 | ) | 298 | (368 | ) | -123 % | |
| Net financial & holding results | (483 | ) | 329 | (812 | ) | -247 % | |
| Debt Restructuring Results | | 280 | (280 | ) | -100 % | ||
| Other incomes & expenses | (58 | ) | (85 | ) | 27 | 32 % | |
| RESULTS FROM ORDINARY OPERATIONS | (491 | ) | 779 | (1.270 | ) | -163 % | |
| Taxes on income | | | | | |||
| NET (LOSS)/INCOME | (491 | ) | 779 | (1.270 | ) | -163 % | |
| Operating (Loss)/Profit before D&A | 1.124 | 1.098 | 26 | 2 % | |||
| As a % of Net Revenues | 53 | % | 56 | % | |||
| Income Statement | |||||||
| Three -Month Comparison | |||||||
| 30-Sep | |||||||
| 2004 | 2003 | D $ | D % | ||||
| Net revenues | 727 | 683 | 44 | 6 % | |||
| Cost of services provided | (496 | ) | (527 | ) | 31 | 6 % | |
| GROSS PROFIT | 231 | 156 | 75 | 48 % | |||
| Administrative expenses | (40 | ) | (18 | ) | (22 | ) | -122 % |
| Selling expenses | (145 | ) | (144 | ) | (1 | ) | -1 % |
| OPERATING (LOSS)/PROFIT | 46 | (6 | ) | 52 | 867 % | ||
| Equity income from related companies | (20 | ) | (49 | ) | 29 | 59 % | |
| Net financial & holding results | (265 | ) | (414 | ) | 149 | 36 % | |
| Debt Restructuring Results | | 1 | (1 | ) | -100 % | ||
| Other incomes & expenses | (22 | ) | (41 | ) | 19 | 46 % | |
| RESULTS FROM ORDINARY OPERATIONS | (261 | ) | (509 | ) | 248 | 49 % | |
| Taxes on income | | | | | |||
| NET (LOSS)/INCOME | (261 | ) | (509 | ) | 248 | -49 % | |
| Operating (Loss)/Profit before D&A | 376 | 372 | 4 | 1 % | |||
| As a % of Net Revenues | 52 | % | 54 | % |
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Table of Contents
TELECOM PERSONAL S.A.
Unconsolidated Information
NINE MONTH PERIOD AND THIRD QUARTER- FISCAL YEAR 2004 .
(In millions of Argentine pesos)
12- Balance Sheet
| Sep-30 2004 | Dec-31 2003 | D $ | D % | ||
|---|---|---|---|---|---|
| Cash, equivalents and investments | 516 | 452 | 64 | 14 % | |
| Trade receivables | 218 | 173 | 45 | 26 % | |
| Other current assets | 136 | 41 | 95 | 232 % | |
| TOTAL CURRENT ASSETS | 870 | 666 | 204 | 31 % | |
| Trade receivables | 95 | 77 | 18 | 23 % | |
| Fixed & Intangible assets | 1.898 | 1.942 | (44 | ) | -2 % |
| Other non-current assets | 65 | 68 | (3 | ) | -4 % |
| TOTAL NON-CURRENT ASSETS | 2.058 | 2.087 | (29 | ) | -1 % |
| TOTAL ASSETS | 2.928 | 2.753 | 175 | 6 % | |
| Accounts payable | 255 | 212 | 43 | 20 % | |
| Loans | 1.905 | 1.681 | 224 | 13 % | |
| Reserves | 14 | 3 | 11 | 367 % | |
| Other current liabilities | 43 | 49 | (6 | ) | -12 % |
| TOTAL CURRENT LIABILITIES | 2.217 | 1.945 | 272 | 14 % | |
| Reserves | 69 | 64 | 5 | 8 % | |
| Loans | | 59 | (59 | ) | -100 % |
| Other non-current liabilities | 4 | 4 | | 0 % | |
| TOTAL NON-CURRENT LIABILITIES | 73 | 127 | (54 | ) | -43 % |
| TOTAL LIABILITIES | 2.290 | 2.072 | 218 | 11 % | |
| Temporary differences from transaltion | 23 | 21 | 2 | 10 % | |
| Shareholders equity | 615 | 660 | (45 | ) | -7 % |
| TOTAL LIABILITIES AND EQUITY | 2.928 | 2.753 | 175 | 6 % |
13- Income Statement
Six - Month Comparison
| 30-Sep — 2004 | 2003 | D $ | D % | ||||
|---|---|---|---|---|---|---|---|
| Net revenues | 1.094 | 714 | 380 | 53 % | |||
| Cost of services provided | (723 | ) | (449 | ) | (274 | ) | -61 % |
| GROSS PROFIT | 371 | 265 | 106 | 40 % | |||
| Administrative expenses | (52 | ) | (61 | ) | 9 | 15 % | |
| Selling expenses | (218 | ) | (124 | ) | (94 | ) | -76 % |
| OPERATING (LOSS)/PROFIT | 101 | 80 | 21 | 26 % | |||
| Equity income from related companies | (5 | ) | 27 | (32 | ) | -119 % | |
| Financial & holding results | (130 | ) | 162 | (292 | ) | 180 % | |
| Debt Restructuring Results | | 90 | (90 | ) | -100 % | ||
| Other incomes & expenses | (11 | ) | (40 | ) | 29 | 73 % | |
| RESULTS FROM ORDINARY OPERATIONS | (45 | ) | 319 | (364 | ) | -114 % | |
| Taxes on income | | | | | |||
| NET (LOSS)/INCOME | (45 | ) | 319 | (364 | ) | -114 % | |
| Operating (Loss)/Profit before D&A | 306 | 301 | 5 | 2 % | |||
| As a % of Net Revenues | 28 | % | 42 | % | |||
| Income Statement | |||||||
| Three -Month Comparison | |||||||
| Sep-30 | |||||||
| 2004 | 2003 | D $ | D % | ||||
| Net revenues | 419 | 266 | 153 | 58 % | |||
| Cost of services provided | (285 | ) | (156 | ) | (129 | ) | -83 % |
| GROSS PROFIT | 134 | 110 | 24 | 22 % | |||
| Administrative expenses | (13 | ) | (21 | ) | 8 | 38 % | |
| Selling expenses | (84 | ) | (46 | ) | (38 | ) | -83 % |
| OPERATING (LOSS)/PROFIT | 37 | 43 | (6 | ) | -14 % | ||
| Equity income from related companies | (6 | ) | 3 | (9 | ) | -300 % | |
| Financial & holding results | (50 | ) | (77 | ) | 27 | 35 % | |
| Other incomes & expenses | 5 | (11 | ) | 16 | 145 % | ||
| RESULTS FROM ORDINARY OPERATIONS | (14 | ) | (42 | ) | 28 | 67 % | |
| Taxes on income | | | | | |||
| NET (LOSS)/INCOME | (14 | ) | (42 | ) | 28 | -67 % | |
| Operating (Loss)/Profit before D&A | 106 | 114 | (8 | ) | -7 % | ||
| As a % of Net Revenues | 25 | % | 43 | % |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Telecom Argentina S.A. — By: | /s/ Alberto Yamandú Messano |
|---|---|
| Name: | Alberto Yamandú Messano |
| Title: | Director |