Tiscali 2007 Annual Report Download - page 46

ative balance of EUR 6.4 million, a significant improvement
with respect to the operating loss of EUR 13.0 million during
2006.
The gross operating result generated by the subsidiary Tiscali
UK (United Kingdom) during 2007, inclusive of Pipex’s broad-
band and voice division since 13 September 2007 and infra-
Group costs for information technology services provided by
Tiscali Services S.r.l. , amounted to EUR 98.6 million (16% of
revenues), up by 52% compared with the EUR 65.1 million
(15% of revenues) in 2006. The “systematic” figure, i.e. that
not inclusive of the Pipex acquisition, came to EUR 88.2 mil-
lion, up by 35% when compared with 2006.
The 2007 operating result presented a negative balance of
EUR 54.2 million, an improvement with respect to the loss of
EUR 59.5 million in 2006.
Result from operating activities
The 2007 accounting period closed with a negative net result
from operating activities (on-going) of EUR 153.8 million, com-
pared with a loss of EUR 59.7 million generated on a like-for-
like basis in 2006. This result in particular reflected financial
charges totalling EUR 90.7 million during the year, compared
with EUR 51.7 million in 2006.
Result from assets destined to be disposed of
At 31 December 2007, this item, as in 2006, included the net
results of subsidiaries held for sale. In particular, the balance
of this item includes the results of business operations held
by Tiscali in the Czech Republic, Germany and the Nether-
lands which proved to meet the conditions for treatment under
the terms of IFRS 5 (
non current assets held for sale and dis-
continued operations
).
During 2007, the net result from assets destined to be dis-
posed of presented a positive balance of EUR 78.5 million,
compared with a negative balance of EUR 76.9 million in the
same period of 2006. In order to more fully explain this result,
see Note 16 of the financial statements.
Net result
At 31 December 2007, the overall result for the year dis-
closed a loss of EUR 75.3 million, compared with a loss of
EUR 136.6 million in 2006. The figure includes net financial
charges totalling EUR 90.7 million, compared with EUR 51.7
million in 2006 and deferred tax assets for EUR 19.9 million
relating to the Dutch tax consolidation system.
It was considered advisable to make a provision for tax assets
on the Dutch tax unit amounting to EUR 18.2 million. This
provision equates to the tax liability estimated for 2008-2010,
determined in relation to the profits of the tax unit estimat-
ed in the business plan, whose total value equals EUR 34.3
million.
Financial position
Shareholders are informed that, as envisaged by IFRS 5, the
residual balance sheet balances of the Netherlands, Germany
and Czech Republic for 2007 have been consolidated line-
by-line, whilst for 2006 the balance sheet balances for these
assets had been recorded under the consolidated balance
sheet items “assets held for sale” and “liabilities directly relat-
ed to assets held for sale”.
Assets
Non-current assets
Non-current assets include a goodwill value of EUR 515 mil-
lion (EUR 316.6 million at 31 December 2006). The item under
review essentially relates to UK business operations, including
the goodwill value attributed to Pipex. Other intangible and
tangible fixed assets relating to properties, plant and machin-
ery are recorded with a total value at 31 December 2007 of
EUR 558.3 million (EUR 399.5 million at 31 December 2006).
Non-current assets also include EUR 28.3 million for other
financial assets and EUR 2.5 million for equity investments
carried at equity.
Investments
The expansion of the unbundling network and subsequent oper-
ational investments relating to the connection and activation of
new ADSL customers have generated total investments in 2007
of EUR 193.5 million, EUR 103.3 million of which is attributable
to investments in intangible assets and around EUR 90.2 million
to investments in tangible assets. The investments in intangible
assets mainly refer to costs in relation to ADSL customer activa-
tion and the stipulation of IRU (Indefeasible Rights of Use) con-
REPORT ON OPERATIONS
45
CONSOLIDATED BALANCE SHEET - EUR (000) 31.12.2007 31.12.2006
Non current assets 1,210,692 876,465
Current assets 389,249 195,641
Assets held for sale - 158,642
Total Assets 1,599,941 1,230,748
Group shareholders’ Equity 169,647 242,829
Shareholders’ equity pertaining to minority shareholders 37,322 26,733
Total Shareholders’ equity 206,970 269,561
Non current liabilities 786,623 222,299
Current liabilities 606,348 673,957
Liabilities directly related to assets held for sale - 64,932
Total liabilities and shareholders’ equity 1,599,941 1,230,748