Helsinki, 2011-02-10 07:02 CET (GLOBE NEWSWIRE) -- Financial statements bulletin
10 February 2011 at 8.00 am
COMPTEL CORPORATION’S FINANCIAL STATEMENTS FOR 2010
Net sales and operating profit grew from the previous year.
Key Figures for the Fourth Quarter
- Net sales EUR 23.5 million, growth 8.9% (Q4 2009: 21.6)
- Operating profit EUR 4.9 million (3.1), 20.8% of net sales
- Earnings per share EUR 0.03 (0.01)
- Order backlog EUR 34.0 million (37.6)
Key Figures for the Full Year
- Net sales EUR 77.9 million, growth 4.0% (2009: 74.9)
- Operating profit EUR 8.9 million (1.0), 11.4% of net sales
- Earnings per share EUR 0.04 (-0.02)
- Number of employees at the year end 589 (587)
Board of Directors proposes a dividend of EUR 0.04 (0.03) per share be paid for 2010.
Comptel net sales are estimated to grow moderately in 2011. During this year, the company will invest in further development of its sales channels, and as a result the operating profit is estimated to remain at the previous year’s level.
The full year financial information in this stock exchange release is based on the company’s audited financial statements. The auditor's report was issued on 9 February 2011.
Juhani Hintikka, President and CEO:
”Comptel’s business developed favourably during the last quarter of the year. Net sales grew and profitability was good in Europe, Asia-Pacific and in the Americas. In the Middle East, the projects that had been delayed were started. License sales improved towards the end of the year and we also agreed on projects to consolidate and extend some of the systems that have been delivered earlier.
In 2010, the financial results improved from the previous year: growth remained low, but profitability improved significantly. Partner sales grew in line with our strategy. Our financial position remained strong.
We are accelerating our customer and partner intimacy business model by placing more experts in the growth markets. During this year we also aim to grow our solution business and increase the value-add of our expert services.”
Business Review
In the fourth quarter, Comptel’s net sales grew by 8.9 per cent compared to the previous year and were EUR 23.5 million (21.6). The growth was generated by license upgrades and improved license sales at the year end. Full year net sales grew by 4.0 per cent compared to the previous year and were EUR 77.9 million (74.9).
In the fourth quarter, operating profit rose to EUR 4.9 million (3.1) and operating profit margin was 20.8 per cent (14.5). Revenue recognition of major license upgrades improved the profitability. Full year operating profit was EUR 8.9 million (1.0), representing 11.4 per cent of net sales (1.4).
In 2010, net financial items were EUR -0.7 million (-0.7). Profit before taxes was EUR 8.5 million (0.4), which corresponds 10.9 per cent (0.5) of net sales. Net profit was EUR 4.7 million (-2.1). Earnings per share for the financial year were EUR 0.04 (-0.02).
Tax expense for the financial year was EUR 3.8 million (2.5). Including the withholding taxes credited during the first half of the year, the net amount of withholding taxes due to double taxation was EUR 0.2 million. The cumulative amount of outstanding double withholding taxes payment since 2004 is EUR 6.5 million.
The Group’s order backlog was EUR 34.0 million (37.6) at the end of the financial year. Maintenance agreements represent EUR 20.5 million (22.6) and other order backlog EUR 13.6 million (15.0) of the total.
The customer service centre in Bulgaria and its 26 employees were transferred to Comptel Group as of 1 April.
In June, Comptel Corporation and Telenor Norway concluded a five year long agreement on the license upgrades and maintenance of Comptel's major OSS products. At the same time, the maintenance of Telenor Norway’s old IT systems was removed from Comptel. As part of the arrangement, 16 of Comptel’s employees were transferred to Telenor as of 1 July.
Business Areas
|
Net sales, EUR million |
10-12 2010 | 10-12 2009 | Change % | 1-12 2010 | 1-12 2009 | Change % |
| Europe | 10.8 | 9.2 | 17.7 | 37.1 | 33.3 | 11.5 |
| Asia-Pacific | 7.1 | 6.0 | 18.9 | 23.1 | 20.5 | 13.0 |
| Middle East and Africa | 3.1 | 5.0 | -37.7 | 9.8 | 16.1 | -39.0 |
| Americas | 2.5 | 1.5 | 69.0 | 7.8 | 5.1 | 54.6 |
| Total | 23.5 | 21.6 | 8.9 | 77.9 | 74.9 | 4.0 |
|
Operating profit by area, EUR million |
||||||
| Europe | 6.2 | 4.7 | 30.8 | 19.8 | 15.4 | 29.0 |
| Asia-Pacific | 4.8 | 3.2 | 49.2 | 13.1 | 11.5 | 13.5 |
| Middle East and Africa | 1.6 | 2.3 | -30.3 | 2.5 | 8.3 | -70.1 |
| Americas | 1.8 | 0.2 | 1043.2 | 4.2 | 0.3 | 1421.3 |
| Unallocated costs | -9.5 | -7.3 | 30.7 | -30.6 | -34.4 | -11.0 |
| Total | 4.9 | 3.1 | 56.4 | 8.9 | 1.0 | 775.2 |
| Operating profit, % of net sales | ||||||
| Europe | 57.5 | 51.7 | -- | 53.4 | 46.1 | -- |
| Asia-Pacific | 67.8 | 54.1 | -- | 56.6 | 56.3 | -- |
| Middle East and Africa | 51.8 | 46.3 | -- | 25.3 | 51.6 | -- |
| Americas | 71.2 | 10.5 | -- | 53.5 | 5.4 | -- |
| Total | 20.8 | 14.5 | -- | 11.4 | 1.4 | -- |
Net sales grew in Europe, Asia-Pacific and especially in the Americas. In the Middle East, net sales decreased significantly compared to the previous year. However, the deliveries that had been delayed started in the region towards the end of the year.
In October - December, Comptel sold six (6) new core licenses, one Comptel Fulfillment, Comptel Provisioning and Activation, Comptel Catalog, Comptel Convergent Mediation, Comptel Policy Control and Comptel Interconnect Billing solution. In addition, Comptel agreed on significant projects to extend some of the earlier delivered Comptel Control & Charge and Comptel Fulfillment solutions.
In 2010, Comptel sold 16 (19) new core licenses: three Comptel Fulfillment, Comptel Convergent Mediation, Comptel Interconnect Billing, and Comptel Provisioning and Activation solutions, two Comptel Policy Control, and one Comptel Catalog and Comptel Dynamic SIM Management solution. Six licenses were sold in the Middle East and Africa, five in Europe, three in the Americas and two in Asia-Pacific. Comptel reports as new core licenses the software license deliveries which value exceeds EUR 100,000.
|
Net sales breakdown by type, EUR million |
10-12 2010 | 10-12 2009 | Change % | 1-12 2010 | 1-12 2009 | Change% |
| Licenses | 10.8 | 8.1 | 33.6 | 26.2 | 19.7 | 33.4 |
| Services | 4.3 | 5.4 | -20.7 | 18.3 | 22.8 | -19.8 |
| Maintenance agreements | 8.5 | 8.2 | 4.1 | 33.4 | 32.4 | 2.9 |
| Total | 23.5 | 21.6 | 8.9 | 77.9 | 74.9 | 4.0 |
License sales grew compared to the previous year. A lower amount of larger system deliveries decreased the share of service revenue. Maintenance revenue consists of maintenance and support of the delivered systems.
| Net sales by sales channel, EUR million | 10-12 2010 | 10-12 2009 | Change % | 1-12 2010 | 1-12 2009 | Change % |
| Direct sales | 12.2 | 14.3 | -14.7 | 48.7 | 51.7 | -5.8 |
| Partner sales | 11.4 | 7.3 | 54.9 | 29.2 | 23.1 | 26.0 |
| Total | 23.5 | 21.6 | 8.9 | 77.9 | 74.9 | 4.0 |
The share of partner sales grew especially during the last quarter, in line with Comptel’s strategy. Comptel’s key strategic partners are Alcatel-Lucent, Cisco and IBM.
Financial Position
| EUR million | 31 Dec 2010 | 31 Dec 2009 | Change % |
| Statement of financial position total | 76.4 | 82.6 | -7.6 |
| Liquid assets | 7.0 | 6.7 | 4.4 |
| Trade receivables, gross | 25.1 | 25.0 | 0.5 |
| Bad debt provision | -0.8 | -1.4 | -41.4 |
| Trade receivables, net | 24.3 | 23.6 | 3.0 |
| Accrued income | 7.6 | 13.5 | -43.6 |
| Deferred income related to partial debiting | 1.9 | 1.6 | 19.7 |
| Interest-bearing debt | 0.1 | 8.0 | -98.7 |
| Equity ratio, per cent | 71.6 | 62.6 | 14.5 |
Statement of financial position total on 31 December 2010 was EUR 76.4 million (82.6), of which liquid assets amounted to EUR 7.0 million (6.7). The dividends of EUR 3.2 million (4.3) were paid during the financial year.
Operating cash flow was EUR 1.7 million (1.4) in the last quarter, and EUR 16.6 million (6.3) during the financial year.
The trade receivables were EUR 24.3 million (23.6) at the end of the year. Accrued income was EUR 7.6 million (13.5). Deferred income related to partial debiting was EUR 1.9 million (1.6).
During the financial year, the Group amortised its interest-bearing debt by EUR 8.0 million and at the date of financial statements the Group had EUR 0.1 million (8.0) of interest-bearing debt. Comptel Corporation has fully available a revolving credit facility of EUR 15.0 million maturing in the year 2013. Equity ratio was 71.6 per cent (62.6) and the gearing ratio was 14.1 per cent negative (2.8).
Research and Development (R&D)
| EUR million | 10-12 2010 |
10-12 2009 |
Change% |
1-12 2010 |
1-12 2009 | Change% |
| Direct R&D expenditure | 3.7 | 3.7 | -1.1 | 13.4 | 15.6 | -13.9 |
| Capitalisation of R&D expenditure according to IAS 38 | -1.0 | -1.4 | -30.0 | -3.9 | -3.9 | 0.7 |
| R&D depreciation and impairment charges | 1.1 | 0.9 | 17.7 | 3.7 | 3.0 | 22.9 |
| R&D expenditure, net | 3.8 | 3.3 | 16.2 | 13.2 | 14.7 | -10.2 |
In the first half of the financial year, the number of R&D personnel was lower than in the previous year, which resulted as a decreased R&D expenditure for the full year. Direct R&D expenditure of the previous year’s last quarter has been adjusted to be comparable.
Comptel’s R&D expenditure was mainly targeted at developing new dynamic end-to-end solutions, which enable service providers to shorten time-to-market for new services and to charge for them. The company is especially focusing on development of fulfillment solutions in IP-based environment, in which area the demand is growing.
Investments
| EUR million | 10-12 2010 |
10-12 2009 |
Change% |
1-12 2010 |
1-12 2009 | Change% |
| Gross investments in property, plant and equipment and intangible assets |
0.2 |
0.1 |
181.7 |
1.1 |
0.7 |
63.8 |
Gross investments in the financial year comprised of investments in devices, software and furnishings. The investments were funded through cash flow from operations.
Personnel
| 31 Dec 2010 | 31 Dec 2009 | Change, % | |
| Number of employees at the end of period | 589 | 587 | 0.3 |
| 1-12 2010 | 1-12 2009 | Change, % | |
| Average number of personnel during the period | 586 | 613 | -4.4 |
The number of employees remained at the level of previous year’s end.
In the last quarter, the personnel expenses were 38.6 per cent of net sales (40.9). In the financial year, the personnel expenses were 45.6 per cent of net sales (51.0 including one-off items).
At the year end 38.0 per cent (41.1) of the personnel were located in Finland, 23.6 per cent (20.4) in Malaysia, 7.0 per cent (12.1) in Norway, 8.8 per cent (9.7) in the United Kingdom, and 22.6 per cent (16.7) in other countries where Comptel operates.
Comptel share
The closing share price of the financial year was EUR 0.69 (0.78). Comptel’s market value at the year end was EUR 73.5 million (83.3).
| Comptel share | 10-12 2010 | 10-12 2009 | Change % | 1-12 2010 | 1-12 2009 | Change % |
| Shares traded, million | 26.1 | 3.9 | 567.1 | 38.3 | 35.8 | 6.9 |
| Shares traded, EUR million | 18.9 | 3.0 | 524.2 | 29.0 | 24.3 | 19.6 |
| Highest price, EUR | 0.90 | 0.82 | 9.8 | 0.95 | 0.96 | -1.0 |
| Lowest price, EUR | 0.68 | 0.72 | -5.6 | 0.68 | 0.57 | 19.3 |
Of Comptel’s outstanding shares, 6.6 per cent (6.4) were nominee registered or held by foreign shareholders at the end of the financial year.
During the year, Comptel Corporation allotted 202,042 shares as part of share-based incentives to persons involved in the program and 84,447 shares to the members of the Board of Directors as part of their annual compensation.
During the year, a total of 1,250,000 share options 2009B have been distributed to the key personnel of the Group. The current share subscription price is EUR 0.87, which corresponds to the trade volume weighted average quotation of the Comptel share on the NASDAQ OMX Helsinki during 1 April - 30 April 2010.
Share options 2006C were listed on NASDAQ OMX Helsinki commencing from 1 November 2010. The trading code is CTL1VEW306 and ISIN code is FI0009652416. The current share subscription price is EUR 1.41 which corresponds to the trade volume weighted average quotation of the Comptel share on the Helsinki stock exchange during 1 April - 30 April 2008 deducted by the dividends paid.
The share subscription period of 2006A share options expired on 30 November 2010. During the subscription period no shares were subscribed.
In April, the company completed its share buy-back programme during which a number of 791,081 own shares were purchased through public trading on NASDAQ OMX Helsinki. The average price per share was approximately EUR 0.79 and the total purchase price approximately EUR 627,885.
The company held 599,905 of its own shares at the end of the financial year, which is 0.56 per cent of the total number of its shares. The total counter-book value of the shares held by the company was EUR 11,998.
Corporate Governance
The Annual General Meeting (AGM), held on 22 March 2010, elected the following members for the Board of Directors: Mr Olli Riikkala, Mr Hannu Vaajoensuu, Mr Timo Kotilainen, Mr Juhani Lassila, Mr Petteri Walldén and Mr Henri Österlund. In its meeting held after the AGM, the Board of Directors re-elected Mr Olli Riikkala as chairman and Mr Hannu Vaajoensuu as vice chairman. Mr Juhani Lassila continued as chairman of the audit committee and Mr Petteri Walldén and Mr Henri Österlund were elected as members. Mr Olli Riikkala continued as chairman of the compensation committee and Mr Timo Kotilainen and Mr Hannu Vaajoensuu were elected as members.
The AGM approved the Board of Directors’ proposal for a dividend, according to which a dividend of EUR 0.03 per share was paid for 2009. The AGM authorised the Board of Directors to decide on share issues amounting to a maximum of 21,400,000 new shares and on repurchase of the company's own shares up to a maximum number of 10,700,000 shares. The authorisations are valid until 30 June 2011.
Mr Sami Erviö was President and CEO of Comptel Corporation until 25 October 2010, after which Mr Simo Sääskilahti was the Acting President and CEO until 2 January 2011.
On 26 October 2010, the Board of Directors of Comptel Corporation appointed Mr Juhani Hintikka, M.Sc. (Eng.), as the new President and CEO of the company as of 3 January 2011. He joined Comptel from Nokia Siemens Networks where his most recent position was the global Head of Operations Support Solutions (OSS) Business Line.
Mr Mikko Hytönen, M.Sc. (Eng.), was appointed as the new Chief Financial Officer, effective as of 1 March 2011, when Mr Markku Pirskanen will join another employer. Mr Hytönen acted earlier as Group Controller for Comptel.
Subsequent Events
On 10 January 2011, Comptel announced to accelerate its customer and partner intimate business model by having more resources closer to key customers and partners in certain growth markets. At the same time, Comptel started statutory cooperation negotiations to address the potential personnel impacts in Finland due to restructuring of the European and MEA business units. It is estimated that the maximum reduction need is 30 persons. The negotiation process is expected to be completed during February 2011. Due to the investments in the other markets the total Group headcount is not expected to decrease.
Near-term Risks and Uncertainties
Comptel develops dynamic end-to-end solutions for leading operators globally in the telecom field. This requires Comptel to understand correctly the trends taking place in its business environment and the needs of its customers and resellers by each region. Failure to identify market conditions, address customers’ needs and develop its products in a timely way may significantly undermine the growth of Comptel’s business and its profitability.
Characteristics for Comptel’s field of industry are significant variations of net sales and profit, which are related to customers’ purchasing behaviour and the timing of major single deals.
Comptel operates globally so it is exposed to risks arising from different currency positions. Exchange rate changes between the Euro, which is the company’s reporting currency, and the US Dollar, UK Pound Sterling and Norwegian Krone affect the company’s net sales, expenses and net profit.
The application process to prevent Comptel’s double taxation is still partly pending with the Ministry of Finance in Finland. The company believes the treatment of its withholding taxation will be changed also concerning the countries where the issue is still unsolved.
The risks and uncertainties of Comptel are described more in detail as a part of the financial statements and the report of the Board of Directors for 2010.
Outlook
Comptel net sales are estimated to grow moderately in 2011. During this year, the company will invest in further development of its sales channels, and as a result the operating profit is estimated to remain at the previous year’s level.
Board of Directors' Proposal for the Disposal of Profits
The Group parent company’s distributable equity on 31 December 2010 was EUR 24,980,408.87 (29,167,506.81).
The Board of Directors proposes to the General Meeting that a dividend of EUR 0.04 (0.03) per share be paid, totalling EUR 4,258,196.20 (3,197,119.68).
TABLE PART
The full year financial information in this stock exchange release is based on the company's audited financial statements. The auditor's report was issued on 9 February 2011.
The release has been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU. The accounting policies and methods of computation adopted in the financial statements are consistent with those of the annual financial statements for the year ended 2009 except for the application of new or amended standards and interpretations as set forth in note 1.
All figures in the financial report have been rounded and consequently the sum of the individual figures can deviate from the sum figure.
| Consolidated Statement of Comprehensive Income (EUR 1,000) |
1 Jan -- 31 Dec 2010 |
1 Jan – 31 Dec 2009 |
1 Oct – 31 Dec 2010 |
1 Oct – 31 Dec 2009 |
| Net sales | 77,888 | 74,896 | 23,544 | 21,619 |
| Other operating income | 426 | 102 | 6 | 15 |
| Materials and services | -2,607 | -5,828 | -831 | -1,408 |
| Employee benefits | -35,522 | -38,231 | -9,088 | -8,834 |
| Depreciation, amortisation and impairment charges | -5,941 | -5,654 | -1,443 | -1,546 |
| Other operating expenses | -25,337 | -24,268 | -7,288 | -6,713 |
| -69,407 | -73,980 | -18,649 | -18,501 | |
| Operating profit/loss | 8,908 | 1,018 | 4,900 | 3,132 |
| Financial income | 864 | 1,156 | 139 | 286 |
| Financial expenses | -1,574 | -1,825 | -248 | -454 |
| Share of result of associated companies | 314 | 40 | 314 | 40 |
| Profit/loss before income taxes | 8,512 | 388 | 5,105 | 3,005 |
| Income taxes | -3,811 | -2,526 | -1,984 | -1,421 |
| Profit/loss for the period | 4,702 | -2,138 | 3,121 | 1,584 |
| Other comprehensive income | ||||
| Cash flow hedges | 8 | -176 | -242 | -71 |
| Translation differences | 900 | 743 | 180 | 294 |
| Income tax relating to components of other comprehensive income | -2 | 46 | 63 | 18 |
| Total comprehensive income for the period | 5,607 | -1,525 | 3,121 | 1,825 |
| Profit/loss attributable to: | ||||
| Equity holders of the parent company | 4,702 | -2,138 | 3,121 | 1,584 |
| Non-controlling interest | -- | -- | -- | -- |
| Total comprehensive income attributable to: | ||||
| Equity holders of the parent company | 5,607 | -1,525 | 3,121 | 1,825 |
| Non-controlling interest | -- | -- | -- | -- |
| Shareholders of the parent company: | ||||
| Earnings per share, EUR | 0.04 | -0.02 | 0.03 | 0.01 |
| Earnings per share, diluted, EUR | 0.04 | -0.02 | 0.03 | 0.01 |
| Consolidated Statement of Financial Position (EUR 1,000) | 31 Dec 2010 | 31 Dec 2009 |
| Assets | ||
| Non-current assets | ||
| Goodwill | 19,626 | 19,355 |
| Other intangible assets | 10,948 | 11,806 |
| Tangible assets | 1,842 | 1,589 |
| Investments in associates | 1,003 | 689 |
| Available-for sale financial assets | 87 | 87 |
| Deferred tax assets | 783 | 1,243 |
| Other non-current receivables | 432 | 346 |
| 34,721 | 35,116 | |
| Current assets | ||
| Trade and other receivables | 34,580 | 38,668 |
| Current tax assets | 36 | 2,093 |
| Cash and cash equivalents | 7,028 | 6,730 |
| 41,644 | 47,491 | |
| Total assets | 76,365 | 82,607 |
| Equity and liabilities | ||
| Equity attributable to equity holders of the parent company | ||
| Share capital | 2,141 | 2,141 |
| Fund of invested non-restricted equity | 7,575 | 7,499 |
| Translation difference | -858 | -1,757 |
| Retained earnings | 40,287 | 38,416 |
| 49,146 | 46,299 | |
| Total equity | 49,146 | 46,299 |
| Non-current liabilities | ||
| Deferred tax liabilities | 5,762 | 5,458 |
| Provisions | 1,954 | 2,541 |
| Non-current financial liabilities | 68 | -- |
| Other non-current liabilities | 1 | 1 |
| 7,784 | 8,000 | |
| Current liabilities | ||
| Trade and other current liabilities | 18,819 | 20,117 |
| Current tax liabilities | 579 | 179 |
| Current financial liabilities | 36 | 8,012 |
| 19,435 | 28,308 | |
| Total liabilities | 27,219 | 36,308 |
| Total equity and liabilities | 76,365 | 82,607 |
|
Consolidated Statement of Cash Flows (EUR 1,000) |
1 Jan – 31 Dec 2010 |
1 Jan – 31 Dec 2009 |
| Cash flows from operating activities | ||
| Profit/loss for the period | 4,702 | -2,138 |
| Adjustments: | ||
| Non-cash transactions or items that are not part of cash flows from operating activities | 7,111 | 6,840 |
| Interest and other financial expenses | 139 | 336 |
| Interest income | -37 | -64 |
| Income taxes | 3,811 | 2,526 |
| Change in working capital: | ||
| Change in trade and other receivables | 4,082 | 273 |
| Change in trade and other current liabilities | -1,711 | 1,648 |
| Change in provisions | -587 | -396 |
| Interest paid | -163 | -315 |
| Interest received | 29 | 108 |
| Income taxes paid and tax returns received | -820 | -2,517 |
| Net cash from operating activities | 16,556 | 6,301 |
| Cash flows from investing activities | ||
| Purchase price adjustments | -- | 268 |
| Investments in tangible assets | -1,085 | -458 |
| Investments in intangible assets | -39 | -228 |
| Investments in development projects | -3,932 | -3,906 |
| Proceeds from sale of tangible and intangible assets | -- | 341 |
| Loans granted | -- | -75 |
| Change in other non-current receivables | -3 | 5 |
| Net cash used in investing activities | -5,059 | -4,053 |
| Cash flows from financing activities | ||
| Dividends paid | -3,191 | -4,278 |
| Acquisition of Corporation’s own shares | -468 | -295 |
| Proceeds from borrowings | 6,000 | 8,000 |
| Repayment of borrowings | -14,000 | -5,000 |
| Change in other non-current liabilities | -- | -11 |
| Net cash used in financing activities | -11,659 | -1,585 |
| Net change in cash and cash equivalents | -163 | 663 |
| Cash and cash equivalents at the beginning of the period | 6,730 | 6,135 |
| Cash and cash equivalents at the end of the period | 7,028 | 6,730 |
| Change | 298 | 595 |
| Effects of changes in foreign exchange rates | 461 | -68 |
Consolidated Statement of Changes in Equity
| Equity attributable to equity holders of the parent company | Non-control-ling interest | Equity total | |||||||
| EUR 1,000 |
Share capital |
Other reserves |
Trans-lation diffe-rences |
Fair value reserve |
Treasury shares |
Retained earnings |
Total |
||
|
Equity at 31 Dec 2008 |
2,141 |
7,433 |
-2,500 |
85 |
-125 |
44,541 |
51,576 |
-- |
51,576 |
| Dividends | -4,278 | -4,278 | -4,278 | ||||||
| Acquisition of Corporation’s own shares | -336 | -336 | -336 | ||||||
| Transfer of treasury shares | 67 | 174 | -174 | 67 | 67 | ||||
| Share-based compensation | 797 | 797 | 797 | ||||||
| Total comprehensive income for the period | 743 | -130 | -2,138 | -1,525 | -1,525 | ||||
|
Equity at 31 Dec 2009 |
2,141 |
7,499 |
-1,757 |
-45 |
-287 |
38,748 |
46,299 |
-- |
46,299 |
| Equity attributable to equity holders of the parent company | Non-control-ling interest | Equity total | |||||||
| EUR 1,000 |
Share capital |
Other reserves |
Trans-lation diffe-rences |
Fair value reserve |
Treasury shares |
Retained earnings |
Total |
||
|
Equity at 31 Dec 2009 |
2,141 |
7,499 |
-1,757 |
-45 |
-287 |
38,748 |
46,299 |
-- |
46,299 |
| Dividends | -3,191 | -3,191 | -3,191 | ||||||
| Acquisition of Corporation’s own shares | -468 | -468 | -468 | ||||||
| Transfer of treasury shares | 76 | 155 | -155 | 76 | 76 | ||||
| Share-based compensation | 824 | 824 | 824 | ||||||
| Total comprehensive income for the period | 900 | 6 | 4,702 | 5,607 | 5,607 | ||||
|
Equity at 31 Dec 2010 |
2,141 | 7,575 | -858 | -40 | -600 | 40,927 | 49,146 | -- | 49,146 |
Notes
1. Application of new or amended standards and interpretations
On 1 January 2010 the Group adopted the following new and amended standards and interpretations endorsed by the EU and that are applicable to Comptel:
Revised IFRS 3 Business Combinations. The scope of the revised IFRS 3 is broader than before. In respect of Comptel several significant amendments have been made to the standard. The amendments impact the amount of goodwill to be recognised on business combinations and sales results of businesses. The amendments also have an effect on the amounts to be recognised in profit or loss both on the financial year when the business combination is effected and in those financial years when contingent consideration is paid or further acquisitions are made. Under the transitional provisions of the standard those business combinations where control is transferred prior to the effective date of the revised standard are not adjusted to comply with the new rules.
Amended IAS 27 Consolidated and Separate Financial Statements. If the parent company retains control, the amended standard requires impacts from changes in ownership in a subsidiary be recognised directly in Group’s equity. When control is lost, the remaining interest is measured at fair value through profit or loss. A similar accounting treatment will be extended to investments in associated companies (IAS 28) and interests in joint ventures (IAS 31) in the future. Resulting from the amendments losses of a subsidiary may be allocated to non-controlling interest (minority) also when they exceed the value of the minority shareholders’ investment.
Amendment to IAS 39 Financial Instruments: Recognition and Measurement (Eligible Hedged Items). The amendment deals with hedge accounting and relate to designation of a one-sided risk in a hedged item and designation of inflation in a financial hedged item.
IFRIC 17 Distributions of Non-Cash Assets to Owners. The interpretation gives guidelines to a situation when owners receive dividends in other forms than cash or the owners have the possibility to select whether they will receive non-cash assets or cash.
Improvements to IFRSs (April 2009) (mainly effective for financial periods beginning on or after 1 January 2010). Under this procedure minor and non-urgent amendments are grouped together and carried out through a single document annually. The related amendments deal with 12 standards. Impacts vary by standard but the amendments did not have a significant impact on the consolidated financial statements.
2. Segment information
Net sales by segment
| EUR 1,000 |
1 Jan – 31 Dec 2010 |
1 Jan – 31 Dec 2009 |
1 Oct – 31 Dec 2010 |
1 Oct – 31 Dec 2009 |
| Europe | 37,127 | 33,296 | 10,776 | 9,155 |
| Asia-Pacific | 23,118 | 20,455 | 7,147 | 6,009 |
| Middle East and Africa | 9,810 | 16,078 | 3,084 | 4,954 |
| Americas | 7,832 | 5,067 | 2,536 | 1,501 |
| Group total | 77,888 | 74,896 | 23,544 | 21,619 |
Operating profit/loss by segment
| EUR 1,000 |
1 Jan – 31 Dec 2010 |
1 Jan – 31 Dec 2009 |
1 Oct – 31 Dec 2010 |
1 Oct – 31 Dec 2009 |
| Europe | 19,810 | 15,359 | 6,193 | 4,735 |
| Asia-Pacific | 13,076 | 11,517 | 4,847 | 3,249 |
| Middle East and Africa | 2,482 | 8,301 | 1,598 | 2,294 |
| Americas | 4,189 | 275 | 1,806 | 158 |
| Group unallocated expenses | -30,649 | -34,436 | -9,543 | -7,303 |
| Group operating profit/loss total | 8,908 | 1,018 | 4,900 | 3,132 |
| Financial income and expenses | -710 | -670 | -109 | -168 |
| Share of result of associated companies | 314 | 40 | 314 | 40 |
| Group profit/loss before income taxes | 8,512 | 388 | 5,105 | 3,005 |
3. Income tax expense
The tax expense according to the statement of comprehensive income for the period was EUR 3,811 thousand (EUR 2,526 thousand 2009).
In 2006, Adjustment of the Tax Office for Major Corporations refused to accept the crediting of taxes withheld at source in taxation of 2004 and 2005.
The Ministry of Finance has come to an agreement with Greece and Romania. Relating to these countries, Comptel has booked EUR 595 thousand tax receivables for taxes withheld in 2004 -2008. The refund process pertaining to these countries is still pending with the relevant tax authorities. Comptel is pursuing the negotiations with the Ministry of Finance and other countries that have withheld tax at source to avoid double taxation. Comptel believes the treatment of its withholding taxation will be changed.
According to the Board of Adjustment’s decision currently in force, Comptel Corporation has expensed taxes withheld at source amounting to EUR 1,006 thousand in January – December 2010 (EUR 1,234 thousand).
In June 2010, the Finnish tax authority credited a total of EUR 844 thousand for the withholding taxes Comptel has paid in Brazil and China and which had been collected again in Finland.
4. Tangible assets
| EUR 1,000 | 1 Jan – 31 Dec 2010 | 1 Jan – 31 Dec 2009 |
| Additions | 1,190 | 458 |
| Disposals | -38 | -343 |
5. Related party transactions
The Comptel Group has a related party relationship with its associates, the Board of Directors, the Corporate Executives and also with people and companies under Comptel management’s influence.
Transactions, which have been entered into with related parties are as follows:
| EUR 1,000 | 1 Jan – 31 Dec 2010 | 1 Jan – 31 Dec 2009 |
| Associates | ||
| Purchases of goods and services | 100 | 635 |
| Interest income | 7 | 4 |
| Companies under management’s influence | ||
| Purchases of goods and services | 43 | 35 |
| EUR 1,000 | 31 Dec 2010 | 31 Dec 2009 |
| Associates | ||
| Non-current receivables | 83 | 76 |
| Companies under management’s influence | ||
| Trade and other current liabilities | 1 | 1 |
Remuneration to key management
The key management personnel compensation includes the employee benefits of the members of the Board of Directors and the Corporate Executives.
| EUR 1,000 | 1 Jan–31 Dec 2010 | 1 Jan–31 Dec 2009 |
| Salaries and other short-term employee benefits | 2,560 | 2,249 |
| Share-based payments | 519 | 409 |
| Total | 3,078 | 2,657 |
6. Commitments
Minimum lease payments on non-cancellable office facilities and other operating leases are payable as follows:
| EUR 1,000 | 31 Dec 2010 | 31 Dec 2009 |
| Less than one year | 3,597 | 3,904 |
| Between one and five years | 11,226 | 12,783 |
| More than five years | 751 | 2,248 |
| Total | 15,574 | 18,935 |
The group had no material capital commitments for the purchase of tangible assets at 31 December 2010 and 31 December 2009.
7. Contingent liabilities
| EUR 1,000 | 31 Dec 2010 | 31 Dec 2009 |
| Bank guarantees | 2,061 | 1,616 |
8. Subsequent events
On 10 January 2011, Comptel announced to accelerate its customer and partner intimate business model by having more resources closer to key customers and partners in certain growth markets. At the same time, Comptel started statutory cooperation negotiations to address the potential personnel impacts in Finland due to restructuring of the European and MEA business units. It is estimated that the maximum reduction need is 30 persons. The negotiation process is expected to be completed during February 2011. Due to the investments in the other markets the total Group headcount is not expected to decrease.
9. Key figures
| Financial summary | 1 Jan – 31 Dec 2010 | 1 Jan – 31 Dec 2009 |
| Net sales, EUR 1,000 | 77,888 | 74,896 |
| Net sales, change % | 4.0 | -11.7 |
| Operating profit/loss, EUR 1,000 | 8,908 | 1,018 |
| Operating profit/loss, change % | 775.2 | -91.1 |
| Operating profit/loss, as % of net sales | 11.4 | 1.4 |
| Profit/loss before taxes, EUR 1,000 | 8,512 | 388 |
| Profit/loss before taxes, as % of net sales | 10.9 | 0.5 |
| Return on equity, % | 9.9 | -4.4 |
| Return on investment, % | 16.3 | 1.1 |
| Equity ratio, % | 71.6 | 62.6 |
| Gross investments in tangible and intangible assets, EUR 1,0001) | 1,124 | 686 |
| Gross investments in tangible and intangible assets, as % of net sales | 1.4 | 0.9 |
| Capitalisations according to IAS 38 to intangible assets | 3,932 | 3,906 |
| Research and development expenditure, EUR 1,000 | 13,414 | 15,582 |
| Research and development expenditure, as % of net sales | 17.2 | 20.8 |
| Order backlog, EUR 1,000 2) | 34,049 | 37,554 |
| Average number of employees during the period | 586 | 613 |
| Interest-bearing net liabilities, EUR 1,000 | -6,923 | 1,282 |
| Gearing ratio, % | -14.1 | 2.8 |
|
1) The figure does not include investments in development projects. 2) The order book may vary significantly during the financial period. |
||
| Per share data | 1 Jan – 31 Dec 2010 | 1 Jan – 31 Dec 2009 |
| Earnings per share (EPS), EUR | 0.04 | -0.02 |
| EPS diluted, EUR | 0.04 | -0.02 |
| Equity per share, EUR | 0.46 | 0.43 |
| Dividend per share, EUR3) | 0.04 | 0.03 |
| Dividend per earnings, %3) | 90.6 | -150.1 |
| Effective dividend yield, %3) | 5.8 | 3.8 |
| P/E ratio | 15.6 | -39.0 |
| Adjusted number of shares at the end of the period | 107,054,810 | 107,054,810 |
| - of which the number of treasury shares | 599,905 | 304,004 |
| Outstanding shares | 106,454,905 | 106,750,806 |
| Adjusted average number of shares during the period | 106,477,113 | 106,953,918 |
| Average number of shares, dilution included | 107,398,488 | 107,078,252 |
| 3) The Board’s proposal |
10. Definition of key figures
| Operating margin % | = | Operating profit/loss | x 100 |
| Net sales | |||
| Profit margin (before income taxes) % | = | Profit/loss before taxes | x 100 |
| Net sales | |||
| Return on equity % (ROE) | = | Profit/loss | x 100 |
| Total equity (average during year) | |||
| Return on investment % (ROI) | = | Profit/loss before taxes + financial expenses | x 100 |
|
Total equity + interest bearing liabilities (average during the year) |
|||
| Equity ratio % | = | Total equity | x 100 |
| Statement of financial position total – advances received | |||
| Gross investments in tangible and intangible assets, as % of net sales |
= |
Gross investments in tangible and intangible assets |
x 100 |
| Net sales | |||
| Research and development expenditure, as % of net sales |
= |
Research and development expenditure |
x 100 |
| Net sales | |||
| Gearing ratio % | = | Interest-bearing liabilities – cash and cash equivalents | x 100 |
| Total equity | |||
| Earnings per share (EPS) | = | Profit/loss for the financial year attributable to equity shareholders | |
| Average number of outstanding shares for the financial year | |||
| Equity per share | = | Equity attributable to the equity holders of the parent company | |
| Adjusted number of shares at end of period | |||
| Dividend per share | = | Dividend | |
| Adjusted number of shares at end of period | |||
| Dividend per earnings % | = | Dividend per share | x 100 |
| Earnings per share (EPS) | |||
| Effective dividend yield % | = | Dividend per share | x 100 |
| Share closing price at end of period | |||
| P/E ratio | = | Share closing price at end of period | |
| Earnings per share (EPS) |
Comptel Corporation’s Annual General Meeting will be held on 23 March 2011 at 11 am in Helsinki.
The Financial Statements and the report of the Board of Directors for 2010 can be obtained from Comptel’s website www.comptel.com in week 9.
Schedule for Comptel’s interim reports in 2011:
January-March 15 April
January-June 20 July
January-September 21 October
COMPTEL CORPORATION
Board of Directors
Additional information:
Mr Juhani Hintikka, President and CEO, tel. +358 9 700 1131
Mr Markku Pirskanen, CFO, tel. +358 40 517 4606
Mr Samppa Seppälä, Director, IR and Corporate Communications, tel. +358 50 568 0533
Distribution:
NASDAQ OMX Helsinki
Major media
