- Forthnet turned EBITDA positive in Q3 '08 (excluding NOVA)
- 25.8% revenue growth in Q3 '08 (excluding NOVA)
- 26.1 k new ULL customers in Q3 '08
- 32% market share in Q3 '08 ULL activations
- 172k active ULL customers at the end of September '08
- 196k active ULL customers at the end of November '08
- Consolidation of NOVA started from 1/9/08
- 4.5% increase in NOVA's customer base
- Overall improvement in NOVA's financial performance for the Quarter July- September '08.
- NOVA products and services are now offered through Forthnet's retail chain.
Local Loop Unbundling
Forthnet continued its progress in unbundling with improving market share in the ULL market in the seasonally weak Q3.
Forthnet ULL Customer Base Q3 '08 Q2 '08 Q1 '08 Q4 '07 Q3 '07
New ULL net activations 26,085 38,590 30,810 33,820 27,300
Market Share in New Adds 32% 37% 32% 30% 42%
Total ULL 171,885 145,800 107,210 76,400 42,580
Overall Market Share 31% 31% 30% 28% 26%
Forthnet is the leading unbundler in Greece with an overall market share of 31%. It reached 32% in new activations in Q3. Forthnet at the end of November '08 had reached 196k active ULL customers. Forthnet 2Play continuous its strong uptake, constituting 74% of Forthnet's active ULL subscriber base, with monthly ARPU for Q3 at euro 40.3 (excl. VAT).
Forthnet Broadband Customer Base 30/09/08 30/06/08 31/03/08 21/12/07
Forthnet Broadband subscribers(1) 250,480 230,710 216,776 200,346
Quarterly net additions 19,770 13,934 16,429 11,089
Forthnet active ULL subs 171,885 145,800 107,210 76,400
The number of Broadband customers at the end of September stood at 250,480 customers, with 19,770 additions in Q3. ULL is the key growth driver for the Company, while demand for Broadband, 2play and other ULL services, is expected to remain strong.
PAY-TV Services
Nova subscriber base continues to grow at steady pace. At the end of September '08 the total number of NOVA subscribers had reached 359,579, recording a 4.5% increase versus the same period last year.
Pay-TV Subscribers 30/09/08 30/09/07 Δ % change
Cyprus 16,026 12,986 3,040 23.4%
Greece (Analog) 43,266 55,156 -11,890 -21.6%
Greece (Digital) 300,287 275,924 24,363 8.8%
Total NetMed 359,579 344,066 15,513 4.5%
Forthnet Financials - Excluding Pay-TV operations
As a result of the fast increase in ULL customers and against the seasonal weakness of the summer months, Forthnet turned EBITDA positive in Q3, earlier than originally anticipated.
Forthnet Excluding Pay-TV Operations
(in '000 euro) Q3 '08 Q2 '08 Q1 '08 Q3 '07
Revenue 36,915 35,670 33,613 29,347
Adjusted EBITDA(Stock Options)(2) 878 -1,670 -3,413 -4,196
EBITDA Margin 2.38% -4.68% -10.15% -14.29%
Capital Expenditures 12,593 22,679 18,411 14,205
Capital expenditure for Q3 euro '08 was euro 12.6m, down from euro 14.6 m for Q3 '07.
Revenue Breakdown (in '000 euro) Q3 '08 Q3 '07 % change
Direct Retail Services 17,796 3,454 415%
Indirect Retal Services 7,726 15,821 -51%
Business Services & Applications 11,393 10,072 13%
Total Revenues 36,915 29,347 25.8%
Revenue growth continued in Q3, with an increase of 25.8% compared to the same period of 2007, mostly because of the strong ULL related revenue growth (Direct Retail Services).
NOVA Q3 financials
NetMed's improving performance has continued in the Q3 08. Due to seasonality, Q3 is also the weakest quarter of the year for the Pay-TV operations.
NOVA
(in '000 euro) Q3 '08 Q3 '07 Change
Revenue 47,340 45,704 3.6%
EBITDA 10,086 9,436 6.9%
EBITDA Margin 21.31% 20.65%
Consolidated Q3, 9M
From 1/9/08 NOVA is consolidated in Forthnet Group.
Consolidated Results
Key Results (in '000 euro)
9M '08 9M '07 Q3 '08 Q3 '07
Turnover 123,377 86,022 54,094 29,347
Reported EBITDA -7,186 -18,169 4,346 -4,838
Stock Option Plan valuation 6,448 2,193 - 642
Adjusted EBITDA (Stock Options) -737 -15,977 4,346 -4,195
Pre-tax Loss -35,812 -31,578 -8,463 -9,981
Adjusted Pre-tax Loss -29,364 -29,386 -8,463 -9,338
Losses after tax and minority rights -32,106 -24,975 -9,934 -7,970
Capital Expenditures 53,790 33,903 12,701 14,205
Liquidity and Debt
As of September 30th 2008, Forthnet Group had cash and cash equivalent of euro 78.3m, while there are further ?80 m of undrawn committed syndicated long term bank facilities. The total bank debt for the group at September 30th stood at euro 306.5m of which euro 300.4m was long term leading to a net bank debt position of euro 228.3m. It is worth noting that the total long term debt that is maturing over the next 12 months is euro 10.1m.
Recent Developments
To date, OTE has delivered 153 Exchanges corresponding to a footprint of c65% local loop coverage whilst the Company is already offering its ULL services through 152 Exchanges.
In an effort to increase further its appeal to the consumer market, Forthnet is expanding the retail network of Forthnet branded shops. Today, the number of Forthnet Broadband shops, through mainly franchised stores is 97. From December 1st , Forthnet shops will be selling Pay-TV products and Services.
On Pay-TV content, there is significant effort to improve the domestic football league offering. As a result it has been announced that NOVA is the preferred bidder for the football rights for the seasons 2009-2011 for 14 out 16 teams. At the same time Champions League rights for the same period were not renewed.
Forthnet/NOVA is the largest alternative broadband and pay TV operator in Greece. It provides data, Internet, fixed line telephony services to 500,000 customers and pay TV services to 350.000 customers in Greece and Cyprus.
(1)Active & pending activation wholesale ADSL and 2Play customers, plus active & pending activation Unbundled customers.
(2)The are no adjustments for Q3 '08