Versatel net loss widens on EUR69m impairment charge

24 Mar 2011

German fixed network operator Versatel has announced its results for the twelve months ended 31 December 2010, reporting revenues of EUR724.7 million (USD1.03 billion), down 1.4% compared to the EUR734.8 million generated in 2009, but exceeding the company’s forecast for the year of EUR710 million. Versatel attributed the decrease in turnover to fierce competition in the residential DSL market where it is concentrating on retaining customers. This led to an adjustment to assumptions on future performance in the residential business, resulting in the recognition of a EUR69 million impairment charge. This charge, coupled with a EUR23 million rise in one-off expenses from the firm’s restructuring programme, widened its net loss from EUR42.3 million in 2009 to EUR122 million a year later. Meanwhile, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 8% year-on-year to EUR171 million.

Versatel reported that turnover generated by its corporate business in full year 2010 increased 1.8% against 2009 to EUR208.5 million, driven by marketing of IP VPN services. However, residential revenues fell 13.3% year-on-year from EUR322.1 million to EUR279.1 million, thanks to a 9.9% drop in private DSL customers from 682,700 at 31 December 2009 to 615,000 a year later. Sales from the company’s wholesale segment grew 14.1% year-on-year to EUR237.2 million, including wholesale voice revenue of EUR159 million, up by EUR33 million over the previous year.

Germany, 1&1 Versatel