Colt records first year of profitability

21-02-2008

by Charlie Taylor

Colt Telecom saw full-year revenue slide by 6.7 percent to EUR1.6 billion for fiscal 2007, but profits were up for the telco.

The firm -- which provides telephony and IT services to businesses in Ireland and across Europe -- recorded full year revenue of EUR1.8 billion in 2006.

However, while full-year revenue was down, the company posted its first full financial year of profitability. The telco announced that pretax profits increased by a whopping EUR48.7 million during 2007 to EUR39.2 million, as against a loss of EUR9.5 million a year ago.

When announcing its 2006 results a year ago, Colt had unsettled investors by refusing to give an outlook for 2007, due to a review being undertaken by chief executive officer Rakesh Bhasin who had recently taken over as the company's fifth CEO in six years.

Back then, Bhasin said that the outcome for 2007 was "harder than normal to predict" because of the potential investment consequences of his review, but he advised that the firm did expect further progress during the year.

As a result of its internal review, Colt changed its operating model during 2007 and formed three new customer facing business divisions: Major Enterprise, Small and Medium Enterprises (SME) and Wholesale, supported by four Service Divisions and the Country Division.

The company said on Thursday that data revenue for the year increased by 9.8 percent to EUR842.6 million as against EUR767.2 million for fiscal 2006. Data revenue comprised 50.2 percent of total revenues, up 10 percent on the previous year. Meanwhile, voice revenue for the year decreased by 19 percent to EUR837.0 million. Annual operating profit increased by EUR30.6 million to EUR55.3 million in 2007.

Colt, which currently employs 30 people in Ireland, said that during the year it invested in four new data centres, bringing the total number of centres to 18 across Europe.

Looking at the firm's fourth quarter figures, Colt said revenue decreased by 5.5 percent to EUR424.6 million. For the same quarter in fiscal 2006, the company posted revenues of EUR449.2 million.

The company saw fourth quarter pre-tax profit increase by EUR4.6 million from EUR8.9 million in 2006 to EUR13.5 million in 2007.

Data revenue for the quarter reached EUR220.9 million, up 10 percent year-on-year, while voice revenue declined by 18 percent to EUR203.7 million.

"This was our first full financial year of profitability. The results for the fourth quarter also show sustained progress: Data revenues grew by 10 percent, margins were up by 3.7 percentage points, EBITDA was up 1.3 percent and profit grew by EUR4.6 million," said Bhasin in a statement.

"We expect 2008 to be another year of progress for our business," he added.