Tiscali 2001 Annual Report Download - page 42
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34
B2B
Revenues from business-to-business services totalled EUR 3.9mn, an incremental rise of
11% on the previous year.
During 2001, an internal technical and business unit dedicated to B2B services was set up,
while the range of services offered was expanded and streamlined in the second half of
the year. This will allow Tiscali's technical infrastructure in Italy, as well as its international
backbone, to be fully exploited.
Voice
Voice revenues were EUR 18.8mn, down 58% on 2000. This decrease was due mainly to
the Group's strategic refocus on Internet services, as well as to growing competition on
the domestic voice market.
Operating costs
Operating costs totalled EUR 138.7mn, a fall of 4% on 2000.
In particular, line rental costs went down by 9%, while traffic purchasing costs decreased
by 54%. This reduced incidence of direct industrial costs was reflected in the gross margin,
which went up from 33% in 2000 to 39% in 2001.
Salaries and associated costs rose by EUR 7.6mn to about EUR 19.2mn (17% of revenues)
owing to the increased workforce: the number of employees rose from 601 at December
31, 2000 to 731 at December 31, 2001. This cost item also includes staff dedicated
specifically to holding Company activities, who accounted for EUR 6.2mn.
Depreciation, amortisation and provisions increased by 34%, from EUR 24.2mn in 2000 to
EUR 33.2mn in 2001. The increase was due to the growth in non-current assets following
investments carried out in 2001.
Net financial charges were negative as a consequence of debts payable to the subsidiaries
Tiscali International BV and Tiscali Finance SA.
Extraordinary items were negative to the tune of EUR -978.9mn. This result was mainly due
to the reestablishment in the value of subsidiaries since December 31, 2000, and is made
up of income of EUR 767mn as a consequence of new takeovers, and charges of EUR
924mn, of which about EUR 922mn were due to write-downs. These write-downs were
effected to redefine the book value of the Companies acquired. As a rule, for takeovers
effected by the issue of new Tiscali shares, the original costs were adjusted to the value of
Tiscali shares as recorded in January 2002. Further write-downs were effected following
the restructuring plan (as mentioned above). Please refer to the Notes to the Financial
Statements for further details. Other costs were related to charges not reported in
previous financial years, and to the depreciation of non-current assets to their current
value.