Versatel meets revenue and earnings expectations for 2008

19 Mar 2009

Versatel Communications has reported its 2008 full-year results, posting a rise in revenue of 8.8% to EUR762 million (USD996.8 million), and an increase in adjusted EBITDA by 10.4% to EUR210.9 million. The company has attributed the growth to its restructuring programme and efficiency drive during the year. A major streamlining of Versatel’s cost base helped narrow its consolidated loss by EUR38 million to EUR51 million at the end of 2008 and capital expenditure was scaled back by nearly 25% to EUR143 million.

Versatel grew the number of residential broadband subscribers by 12% to 709,000 in 2008, but its fixed telephony customer base fell to 20,488 in the same period, down from 44,920 in 2007. Average revenue per user (ARPU) declined by 15% year-on-year from EUR45.1 to EUR38.1 in 2008. The company does not release subscriber figures for its business segment, but did reveal that revenues for the sector declined by 3% to EUR195.5 million in 2008, due to strong price pressure and competition. Versatel began reorganising its business segment at the beginning of the third quarter of 2008, which led to a pronounced recovery in this segment during the second half of the year.

Versatel forecasts that its DSL customer base will grow by only two million in 2009 compared to 3.5 million in 2008, but the company predicts the wholesale segment will benefit in 2009 from strong demand for its proprietary infrastructure. Based on the projected performance of its three segments, Versatel expects to generate a positive free cash flow of at least EUR40 million in 2009. Versatel CEO, Peer Knauer, commented: ‘I am pleased with the solid set of results for the past financial year. Given the general economic trend and increasingly fierce competition combined with ongoing price erosion, the 2009 financial year presents Versatel with a challenge. With our strategic focus on profitability and cash flow, we have laid the foundations in 2008 to face this challenge with renewed strength.’

Germany, 1&1 Versatel