Tiscali 2008 Annual Report Download - page 37

Consolidated net result
The net result for 2008 presented a loss of EUR 242.7 million,
down with respect to the net loss of EUR 65.3 million in 2007. The
net result was influenced by financial charges for EUR 96.4 million
and writedowns and provisions amounting to approximately EUR
86 million. These charges mainly relate to reorganization costs
linked to the merger of Pipex and the corporate reorganization
process of the Italian subsidiaries.
Equity and financial position
CONSOLIDATED BALANCE SHEET (in abridged form) 31.12.2008 31.12.2007
EUR (mln)
Non-current assets 890.9 1,210.7
Current assets 258.1 389.2
Assets held for sale 56.8 -
Total Assets 1.205.8 1.599.9
Group shareholders’ equity 10.8 169.6
Shareholders’ equity pertaining to minority shareholders (6.0) 37.3
Total Shareholders’ equity 4.8 207.0
Non-current liabilities 229.7 786.6
Current liabilities 949.1 606.3
Liabilities directly related to assets held for sale 22.3 -
Total Liabilities and Shareholders’ equity 1.205.8 1.599.9
Assets
Non-current assets
Non-current assets at 31 December 2008, amounting to EUR
890.9 million, are lower with respect to the figure at 31 December
2007, equating to EUR 1,210.7 million.
This is mainly attributable to the reduction in the value of the
Goodwill allocated to the UK subsidiaries for EUR 76.3 million
(due exclusively to the exchange effect), the reduction of the
amount recorded for prepaid taxes, totalling EUR 96.7 million
and the change in the consolidation area (TiNet Group).
The extension of the unbundling network and the consequent
operating investments relating to the connection and activation
of new ADSL customers generated new investments during the
year of around EUR 174.3 million, including EUR 113 million for
investments in intangible assets and around EUR 61.3 million
for investments in tangible fixed assets.
Investments in Italy came to around EUR 58.2 million, while in
the UK they totalled approximately EUR 116.0 million. At 31
December 2008, Tiscali’s unbundling network included more
than 486 sites in Italy and around 951 sites in the UK.
REPORT ON OPERATIONS
36
Operational Income Statement – Italy
EUR (mln) 31.12.2008 31.12.2007
Revenues 313.5 292.0
Gross Operating Margin (Gross Margin) 185.8 169.3
Indirect operating costs 105.4 103.2
Marketing & sales 35.5 41.8
Payroll and related costs 41.3 40.6
Other indirect operating costs 28.5 20.8
Gross operating result
(adjusted EBITDA) 76.3 62.9
Operating result (EBIT) (17.4) (2.4)
Tiscali Italia S.p.A closed 2008 with a gross operating result
(adjusted EBITDA) of EUR 76.3 million (24.3% of revenues), up
with respect to the figure of EUR 62.9 million (21.5% of revenues)
in 2007. The Gross Margin, indicator of the industrial performance
of the Italian subsidiary, increased by around 10% on an annual
basis and by one percentage point in terms of incidence on
revenues. Operating costs which rose from EUR 103.2 million in
2007 to EUR 105.4 million in 2008 (+ 2.1%), include marketing
costs which fell 14.9% in absolute value on an annual basis (from
EUR 41.8 million in 2007 to EUR 35.5 million in 2008).
With regard to the operating result (EBIT), in 2008 Tiscali Italia
S.p.A. generated a loss of EUR 17.4 million compared to the loss
of EUR 2.4 million in 2007, a difference attributable to provisions
and restructuring costs for around EUR 20.5 million linked to the
restructuring programme and reduction on operating and indirect
costs. In detail, at 31st December 2008, Tiscali Italia saw a
reduction of 49 individuals, by means of incentive redundancies,
and the additional outsourcing of 36 individuals.
Operational Income Statement – United Kingdom
EUR (mln) 31.12.2008 31.12.2007
Revenues 683.6 608.7
Gross Operating Margin (Gross Margin) 276.9 249.6
Indirect operating costs 152.2 131.2
Marketing & sales 48.3 41.1
Payroll and related costs 40.0 40.5
Other indirect operating costs 63.9 49.6
Gross operating result (adjusted EBITDA) 108.1 98.6
Operating result (EBIT) (88.6) (54.2)
The gross operating result (adjusted EBITDA) generated by the
subsidiary Tiscali UK (United Kingdom) in 2008 came to EUR
108.1 million (15.8% of revenues) with respect to EUR 98.6
million (16.2% of revenues) in 2007. The result reflects the effects
of the Pipex acquisition in September 2007.
At operating result level (EBIT), Tiscali UK generated a negative
result of EUR 88.6 million in 2008, compared with a loss of EUR
54.2 million in 2007, attributable mainly to provisions and
restructuring costs for the Pipex division.