Warsaw, Poland – August 18, 2010 – GTS Central Europe (“GTS”), a leading infrastructure-based telecommunications operator in Central and Eastern Europe (CEE), is pleased to announce strong financial results for the first half of 2010. Year-on-year, the first half of 2010, revenue remained stable at €189.8 million, EBITDA grew 7.5% to €44.4 million. The improved EBITDA was a direct result of focused changes in product mix and continued optimisation of our cost structure.
Highlights compared to prior period:
· Revenue of € 189.8 million
· EBITDA grew 7.5% to € 44.4 million. EBITDA Margin % increased 100bps to 23%
· Cashflow (EBITDA minus CAPEX) grew 9% to € 26.4 million
Adam Sawicki, GTS Group CEO, commented: “The first half of 2010 results met our expectations as we were able to maintain our revenues and grow both our EBITDA and Cashflow. I believe our refocused business unit structure with five country-focused BUs and two region-wide BUs (International Service and Wholesale Voice) are providing improved customer service and operational efficiencies. Furthermore, many of our recent customer contracts show that our consultative sales and service approach are starting to pay dividends – more services, more locations, longer contact terms, higher ARPU – more satisfied customers.”
Although revenue remained flat in the first half of 2010 relative the first half of 2009, the improvement in EBITDA was driven by increasing margins and efficiency improvements. The Polish Business Unit continues to perform strongly with 13% year-on-year revenue growth. The acquisition of Romanian operator, Datek, closed in June while the acquisition of Hungarian data center operator, Interware, is expected to close in September 2010. These acquisitions will be included in the second half consolidated results.
“While year-on-year consolidated revenues were stable we continue to achieve growth in data and data center products which was offset by decline in our legacy voice business. The business continues to demonstrate EBITDA and Cashflow growth while maintaining CAPEX discipline. The acquisitions of Datek and Interware bring increased scale, additional corporate data and datacenter revenues and customers and is consistent with our strategic focus,” said Gerry Grace, GTS Group CFO.
During the second half of 2010, GTS will fully integrate the Datek and Interware acquisitions into the GTS BU structure. The Company will continue to invest in product enhancements in the Ethernet and IP VPN offerings as well as the broadening of the data center offerings. Also GTS will continue to actively participate in further CEE telecoms consolidation where the acquiree provides unique value to the Company’s customers and shareholders.
