QSC posts first-quarter loss of EUR4.1 million

15 May 2008

German fixed network operator QS Communications (QSC) has reported its figures for the first three months of 2008. During the period, the firm connected 124,700 unbundled local loops, nearly twice as many as in the fourth quarter of 2007, which increased the total to more than 370,000. As a result of the additional custom, revenues grew by 27% in the first quarter of 2008 to EUR97.5 million (USD150.7 million) compared with the EUR76.8 million posted in the same quarter last year. The highest revenue growth came from its Wholesale/Reseller division, where revenues were up 90% year-on-year to EUR49.3 million. Turnover in the Managed Services segment rose by 9% yearly to EUR17.6 million, but sales in the Products sector declined by 12% to EUR30.5 million, as a result of the sustained price war in conventional telephony, particularly in the residential arena.

The rise in revenues was the main factor in the 28% year-on-year increase in first-quarter EBITDA, to EUR11.4 million. EBITDA margin for the first three months of 2008 was 12%. The company’s bottom line was a net loss of EUR4.1 million, compared to a net profit of EUR1.1 million in the year-earlier period. This was blamed on growing customer-related capital expenditures (CAPEX) commensurate with the the growing customer base, as well as a near-doubling of the number of central offices since the start of 2007, from around 1,000 to about 1,800 at 31 March 2008, leading to an increase in operating expenses. CAPEX totalled EUR28.6 million in the first quarter of 2008, up from EUR10.6 million for the same quarter the year before.

QSC’s full-year forecast is for around EUR400 million in revenues and EBITDA of up to EUR60 million.

Germany, QSC