QSC's focus on IP-based revenue drives rise in net income

German fixed line services provider QS Communications (QSC) has announced its results for the three months ended 30 September 2010, reporting revenue of EUR105.6 million (USD148 million), a slight increase of around 1% compared to the EUR104.4 million generated in the same period a year earlier. Reflecting its transformation from a network operator to a service provider, QSC said sales from network operator products as call-by-call and ADSL2+ decreased by EUR7.2 million to EUR32.5 million during the third quarter of 2010, while revenue generated by higher-margin IP-based products and services rose by EUR8.4 million to EUR73.1 million in the same period, accounting for around 69% of total turnover. By focusing on IP-based revenues, the firm said it was able to improve its earnings before interest, tax, depreciation and amortisation (EBITDA) by EUR1.1 million over the third quarter of 2009 to EUR20.3 million, while operating profit grew EUR3.4 million year-on-year to EUR6.5 million. QSC’s net income for the third quarter of 2010 totalled EUR5.8 million, nearly treble the EUR2.1 million reported in the same period a year earlier and higher than the EUR5.5 million for the full 2009 fiscal year. Commenting on the results, QSC’s CEO, Bernd Schlobohm, said: ‘QSC will be sustaining its transformation process in the coming quarters and rigorously raising the percentage of IP-based revenues. This will further strengthen our financial position and profitability.’ The company is reiterating its guidance for the current fiscal year: it plans to grow its revenues and EBITDA, as well as triple net income to more than EUR16 million, compared to EUR5.5 million in fiscal 2009.