Terra Networks SA American Dep (NASDAQ:TRRA)
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Terra Reports an Increase of 7% in Revenues in the First Quarter
of 2005
Net income improved by 36 million euros vs. 1Q04
MADRID, Spain, May 12 /PRNewswire-FirstCall/ -- Terra Networks, S.A., (MC:
TRR; Nasdaq: TRRA), the world's leading Spanish and Portuguese internet group
today released its financial results for the first quarter to 2005, and
comparisons with the same period in 2004. The financial information contained
in this document has been prepared according to the International Financial
Reporting Standards (IFRS), which the Terra Group has adopted since the 1st of
January 2005.
According to this new rules, the disinvestments in Lycos Inc. and
OneTravel.com, that took place in October 2004 and April 2005, must be
considered as "discontinued activities". This is the reason why the figures
related to Lycos Inc. and OneTravel.com in the first quarter of 2004 and 2005
have been eliminated, and they have been included in the line named "Results
from the discontinued activities".
Revenues
The group reported net revenues of 113 million euros in the first three months
of 2005, an increase of 7.2% on the same period last year.
The access business accounted for 49% of revenues; communication, portal and
content services for 29%; other corporate and SME services and other revenues
for 12%; and advertising and e-commerce accounted for 10%.
Operating expenses
Operating expenses fell by 1%. The group reported total expenses of 102.4
million euros in the first quarter of 2005, compared to 103.3 million euros in
the same period last year.
Operating income before depreciation and amortisation (OIBDA)
Terra reported OIBDA (operating income before depreciation and amortisation) of
14.3 million euros in 1Q05 vs. 1.5 million euros in the same period last year,
due to higher revenues recorded in the company's main markets and to tighter
cost control in the past few quarters.
The OIBDA margin was 12.7% at the close of the first quarter 2005, on the back
of higher revenues in Spain and Brazil (Terra's main markets) and costs savings
made on virtually all operating expense items. We highlight the decline in
personnel costs following the restructuring carried out last year.
Net income
Terra reported net income of -1.6 million euros in 1Q05, an increase of 36
million euros vs. the first three months of 2004.
Cash
The cash balance was 544 million euros, a fall of 1,074 million euros vs. March
2004, due mainly to the distribution of 1,136 million euros in dividends (2
euros per share) made at the end of July 2004.
Operating Results: 6.8 million customers
Terra had 6.8 million paid access and portal services customers in 1Q05, a rise
of 28% vs. 1Q04.
The Group had a total of 1.84 million paid access subscribers at March 31,
2005. We would highlight the 58% increase in broadband subscribers, mainly
ADSL, compared to March 2004. The Group had 1.1 million broad band customers,
of which 68% were in Brazil, 16% in Spain and 12% in Chile.
We would also highlight the rise in paid communication and portal services
customers (4.93 million at March 2005). This figure is 40% up on the same
period last year.
In 1Q05 Terra promoted its client-orientated model and launched new value-
added products and services. Highlights of these include:
-- The upgrade and improvement of broadband communication services, such
as doubling speeds in Spain and Latin America.
-- The launch of e-mail plus with 1Gb capacity, in Brazil. Terra is the
first ISP to offer 1 gigabyte email services in the Brazilian internet
sector, increasing capacity to allow users to save thousands of
messages, receive photos, music and videos in their email accounts.
-- The launch of the Fotolog service in Colombia and Argentina (the number
of subscribers in the latter rose to 30,000 in one month).
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousand of Euros - NIIF)
Unaudited
Three months
Mar-31
2005 2004
(1)
Revenues 112,971 105,412
Internal expenditures 108 182
Operating expenses
Supplies -53,346 -52,127
Personnel -16,769 -19,974
Subcontracts -29,756 -29,113
Taxes -2,562 -2,087
Other net operating income
(expense) 3,454 -1,676
Gain (loss) on sale of fixed asset 216 865
Impairment of goodwill and other
asset 0 0
Operating income before D&A OIBDA 14,316 1,482
Depreciation and amortization -19,752 -24,422
Operating income -5,436 -22,940
Profit from associated companies -2,280 -4,850
Net financial income (expense) 2,917 7,075
Income before taxes -4,799 -20,715
Income taxes 3,185 10,541
Income from continuing operations -1,614 -10,174
Income (loss) from discontinued
operations 43 -29,764
Minority interest 3 2,018
Net income -1,568 -37,920
Average shares 561,302 561,012
(1) Revenue by business line and some operating expenses show slight
variations from previously reported figures due to
reclassifications
CONSOLIDATED BALANCE SHEET
(in thousands of Euros - Spanish GAAP)
Audited
Mar-31
2005 2004
Assets
Non-current Assets:
Intangible assets 202,128 268,205
Goodwill 72,415 138,060
Property, plant and equipment
and investment property 10,949 41,641
Long term financial asset and
other noncurrent assets 234,653 294,152
Deferred tax asset 9,060 15,780
Total Non-current Assets: 529,205 757,838
Current assets
Cash and cash equivalent 865,666 1,607,727
Other current assets 140,239 131,326
Total current Assets: 1,005,905 1,739,053
TOTAL ASSETS 1,535,110 2,496,891
Liabilities
Equity attributable to equity
holders of the parent 1,308,514 2,215,642
Minority interest 0 904
Non current liabilities 76,528 96,078
Current Liabilities 150,068 184,267
TOTAL LIABILITIES 1,535,110 2,496,891
OIBDA
Mar-31
2005 2004 %
Operating loss (5,436) (22,940) 76%
Depreciation and amortization 19,752 24,422 19%
OIBDA 14,316 1,482 866%
OIBDA MARGIN 12.7% 1.4% 11,3 b.p.
OPERATING DATA
(in thousands)
Mar-31
2005 2004 %
Total Paid Subscribers (1) 6,767 5,273 28%
Access:
Narrowband 688 1,020 -33%
Broadband 1,149 726 58%
Total 1,837 1,746 5%
VAS (CSP/Portal): 4,930 3,528 40%
Broadband Access Subscribers:
Spain 185 184 1%
Latam 964 542 78%
Total 1,149 726 58%
(1) Based on number of services delivered. Some subscribers may be
contracting access and Value Added Services at the same time.
DATASOURCE: Terra Networks, S.A.
CONTACT: Pablo Fuentes, Corporate Communications, +34-91-452-4248,
, or Investors, Miguel von Bernard,
+34-91-452-3922, , both of Terra Networks,
S.A.