STOCKHOLM, Sweden, Oct. 29, 2002 (PRIMEZONE) -- Aspiro:
- Net sales amounted to SEK 29.5 m (SEK 35.2 m).
- The result after financial items amounted to SEK -77.6 m (SEK -132.5 m).
- The Group's liquid funds totaled SEK 19.6 m (SEK 47.3 m) at the end of the period, whereof SEK 8.5 m available for the parent company.
- Aspiro signed 32 new sales agreements during the period including nine in the last three months. Sales within the core business area, mobile applications, are proceeding according to plan.
- In August, Aspiro acquired Picofun AB. The agreement doubled Aspiro's customer base and considerably expanded the company's product range, with amongst others items, Java-based mobile games.
- In August, Aspiro decided to carry out additional cost saving measures of SEK 12-15 m annually. 17 employees were affected by the measures.
- In September, the subsidiary Aspiro Mobile TextPhone AB was divested as part of Aspiro's continuing process to focus its activities.
- Aspiro is presently in discussions regarding an infusion of capital to strengthen the company's financial position. The discussions also involve possible industrial consolidations, in accordance with Aspiro's earlier stated consolidation strategy.
Net sales and result
The Group's result during the first nine months amounted to SEK 29.5 m (SEK 35.2 m). Third quarter net sales amounted to SEK 7.8 m (SEK 10.9 m). Of net sales for the period, 16% (41%) are attributable to sales in Sweden, 59% (55%) in Europe and 25% (4%) to the rest of the world. Sales within the core business area, mobile applications, are proceeding according to plan, while the business area, SMS traffic, has experienced decreased volumes.
The result after financial items amounted to SEK -77.6 m (SEK -132.5 m). The period's result has been affected by restructuring costs totaling SEK 11.5 m (SEK 22.8 m) and a write-down in goodwill totaling SEK 4.7 m (SEK16.4 m).
The result after financial items for the third quarter amounted to SEK -22.8 m (SEK -48.0 m). Compared with the second quarter of 2002 operating result, excluding write-downs, restructuring costs, and dissolution of negative goodwill, improved by SEK 3.0 m. Other external costs and personnel costs have been reduced by SEK 0.7 m and SEK 2.8 m respectively compared with the second quarter.
The sale of Aspiro Mobile TextPhone AB resulted in a group-wise loss of SEK 0.09 m, which has been taken as a restructuring cost. The divestment of the Fleet Management business area announced in the interim report for January - March 2002 has not yet been carried out.
Earnings per share amounted to SEK -2.14 (SEK -2.09). Earnings per share are effected by the write-down in deferred taxes reported in the second and third quarters as this key ratio is calculated based on the recorded result after tax. Outstanding option rights involve no dilution of the company's stock.
In order to adjust the company's costs to its earnings capacity, additional cost saving measures have been carried out. In August, the company decided to adopt a comprehensive plan of action aimed at retaining its delivery capacity despite a reduction of 17 employees. This will be achieved by, among other things, fewer internal development projects and the distribution of products and services via third parties. Total annual cost savings from these measures are estimated at SEK 12-15 m.
Parent Company
The Parent Company's net sales during the period amounted to SEK 25.3 m (SEK 30.9 m) yielding a result after financial items of SEK -67.1 m (SEK -127.7 m).
Investments
Group investments during the period amounted to SEK 0.8 m (SEK 9.5 m). Investments in tangible assets totaled SEK 0.8 m (SEK 5.6 m). Of total investments, SEK 0.7 m (SEK 4.6 m) is related to finance leasing agreements.
Liquidity and financing
The Group's liquid funds totaled SEK 19.6 m (SEK 47.3 m) at the end of the period, whereof SEK 8.5 m available for the parent company.
Aspiro is presently in discussions regarding an infusion of capital to strengthen the company's financial position. The discussions also include possible industrial consolidations, in accordance with Aspiro's earlier stated consolidation strategy.
Aspiro's stock
Aspiro's stock is traded on Stockholmsborsen's O-list.
The number of outstanding shares at the end of the period amounted to 97,999,811. If all outstanding option rights are exercised to subscribe for shares, the number of additional shares will amount to 1,015,750, each with a nominal value of SEK 0.02.
At an extra general meeting of shareholders, in August, an increase in the company's share capital through two new directed share issues for a total of 12,900,000 new shares in connection with the acquisition of Picofun AB, was authorized. The new share issues generated a dilution effect of approximately 15% for current shareholders.
Market situation and sales achievements
The market for mobile consumer services was dominated during the period by the prevailing financial crisis among telecommunication companies, lower forecasts for mobile phone usage and the risk that the rollout of 3G will be delayed still further. However, the operators' revenues from mobile data continue to rise, indicating a steadily growing market.
Operators have expressed a significant interest for Aspiro's MMS and Java based services. In particular interest has been exhibited for game and entertainment applications, which are Aspiro's core business.
During the third quarter Aspiro signed nine commercial agreements. Aspiro had, at the end of the period, agreements with 34 operators and portals within the business area Mobile Applications and with over 40 customers for SMS traffic.
Aspiro's drop in sales during the third quarter is primarily the result of reduced SMS traffic. The business area for SMS traffic has had problems with spamming. In addition, activities to improve the margins for SMS traffic have also had an effect upon traffic volumes. The business area is presently under review. Revenues for the Aspiro's core business, Mobile Applications, have increased compared to the second quarter.
Application Sales
Proximus (Belgium) has purchased additional mobile services from Aspiro. Vodafone D2 (Germany) has upgraded their Mobile Chat service from Aspiro (former Mgage). T-Mobile has during the third quarter launched its first Java game from Aspiro in the United Kingdom. mmO2 (United Kingdom) has signed a frame agreement with Aspiro for the delivery of mobile games to mmO2's operators in the United Kingdom, Germany, the Netherlands and Ireland. The first applications are scheduled for launch in October. AT&T Wireless (USA) has during the third quarter launched two new services. MMS trials have been sold to Telefonica (Spain), Polkomtel (Poland) and Etisalat (United Arab Emirates).
SMS Traffic Sales
New agreements for SMS traffic have been signed with Sonera ZED, Kiala (Belgium), SMS.ac (USA) and Unimobile (USA).
Personnel and organization
At the end of the period Aspiro had a total of 54 (67) employees spread over 50.1 (64.1) full-time positions. Aspiro's cost savings measures, announced in August, have proceeded according to plan. The result of this, as per the 29th of October, is that Aspiro has 39 employees and four short-term contract employees spread over 38.7 full-time positions. A further three individuals will leave the company within a month.
Aspiro's subsidiary Aspiro Mobile TextPhone AB was sold in September as a part of the company's strategy to focus upon core business areas.
In August, Aspiro acquired Picofun AB. Picofun is a leading distributor of mobile games and entertainment applications with a portfolio of some 80 different applications. It boasts a customer base of 27 mobile operators to whom Picofun delivers games and entertainment services regularly, thus complementing perfectly Aspiro's own existing portfolio of products and customer base. The acquisition of Picofun also gives Aspiro invaluable knowledge of the youth sector. The acquisition, which was financed by two new non-cash share issues totaling 12.9 million shares and a cash purchase sum of SEK 5.5 million, will have a marginal effect on Aspiro's results and liquidity during 2002.
Aspiro intends to continue its strategy of being a leading player in the present industry consolidation to maintain its position as leading supplier of mobile services to operators as well as increase its market share. Aspiro is holding discussions with other companies that could further strengthen Aspiro's customer base and distribution network.
Events after the end of the period
Aspiro has signed a further two sales agreements with Comtrade (Serbia) and TNC (Dubai) after the end of the period. TNC will also be a reseller of Aspiro services in the Middle East. In addition, a consulting agreement has been signed for MMS service strategies with a leading European operator.
The Asian market is judged to be one of the fastest growing for mobile applications. Aspiro has signed a Memorandum of Understanding with Hong Kong-based Imoeba Ltd for mutual distribution of each company's respective applications after the end of the third quarter. Imoeba will sell Aspiro's products in China, Hong Kong, Singapore as well as Taiwan. Aspiro will become a reseller of Imoeba's products in Europe and North America.
For more information
CEO, Hakan Persson will be available at phone number +46(0)708-368130, to answer questions regarding the interim report from October 30th, at 8:00 a.m. (CET).
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