Versatel 1Q revenue, EBITDA down slightly

15 May 2009

Versatel Communications has posted its fiscal results for the three months ended 31 March 2009, recording a 1.7% fall in total revenue to EUR182.1 million (USD247.5 million) in line with the expected trend in the residential segment. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for 1Q 2009 totalled EUR45.6 million, compared with EUR47.3 million in the same period of 2008. The company attributed the 3.6% decrease to the dip in revenue and ongoing price pressure. Versatel generated a positive free cash flow of EUR19.1 million in the first three months of 2009, compared to a negative free cash flow in the first quarter of 2008 of EUR19.6 million. The firm has reaffirmed its forecast of a positive free cash flow of at least EUR40 million for full-year 2009 and based on first quarter market conditions expects annual revenue of at least EUR740 million and adjusted EBITDA of approximately EUR180 million.

In terms of subscribers, Versatel slightly increased the number of residential DSL contracts in the first quarter of 2009 by 3,000, compared with 2008 first quarter net adds of 30,000. At 31 March 2009 the company recorded 712,000 residential customers. Meanwhile, cable customers totalled 160,000 at the end of the period. The slight growth in DSL customer numbers was not enough to make up for ongoing decline in average revenue per user (ARPU), resulting in residential revenue falling to USD84 million, down 6% on the same period a year earlier. Business segment revenue increased by 0.4% in the first quarter of 2009 to USD49.5 million, thanks to the reorganisation of this sector at the start of 3Q 2008 and wholesale revenue climbed to EUR48.6 million, a 5% improvement compared with the first quarter of the previous year.

Germany, 1&1 Versatel