Tiscali 2014 Annual Report Download - page 132

Annual financial report as at 31 December 2014
Date
File Name
Status
Page
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Annual Report as at 31
December 2014
132
6.6 Explanatory Notes
Tiscali S.p.A. is a limited company incorporated under the laws of the Republic of Italy at the Cagliari
Companies’ Register. Tiscali S.p.A. is the Parent Company of the Tiscali Group which offers
integrated Internet access services, telephony and multimedia services in particular positioning itself in
the segment of IP technology services which makes it possible to provide voice and internet traffic on
the same technological platform.
The financial information included in these statements is presented in euro (EUR) which is the
currency used to conduct most of the parent company’s operations.
The income statement and statement of financial position, cash flow statement, statement of changes
in shareholders’ equity are presented in Euro while the values indicated in the explanatory notes are
presented in thousands of Euro.
Assessment of the business as a going-concern and future outlook
Events and uncertainties regarding the business continuity
Tiscali S.p.A. closed its financial statements as at 31 December 2014 with a profit of EUR 0.5 million
and shareholders’ equity of EUR 61.7 million; the company heads up a group (the “Tiscali Group”)
which, as at the same date, closed the financial statements with a consolidated loss of EUR 16.4
million and negative consolidated shareholders’ equity of EUR 168.8 million. Furthermore, as at 31
December 2014, the Group had a gross financial debt of EUR 204.3 million and current liabilities
greater than current assets (non-financial) for EUR 108.9 million.
As of 31 December 2013, the consolidated loss amounted to EUR 4.8 million, with negative
consolidated shareholders’ equity of EUR 151.9 million. Furthermore, as at 31 December 2013, the
Group had a gross financial debt of EUR 201.7 million and current liabilities greater than current
assets (non-financial) for EUR 106.5 million.
As from 2009, the Group, after having completed the disposal of Tinet and the UK subsidiaries,
allocating the proceeds of the sale to the repayment of part of the debt, implemented action with the
aim of achieving economic, equity and financial balance over the long term, and launching a phase of
recovery for the sales activities, which has been reflected in the business and financial plan.
In a recessionary context, the transformation under way for some years in the telecommunications
market has led to greater competitiveness and erosion of the revenues and the margin for the
operators.
Progressive saturation for the fixed network broadband market, the sharp competition of the data
proposals on the mobile networks and the possibility for customers to migrate from one provider to
another has generated a greater response from the customers to promotions and consequently a
declining trend of the prices.
In the presence of such factors (and other collateral ones such as the progressive replacement of the
fixed lines with mobile ones, the increasing weight of the costs linked to customer service, the
establishment of the so-called Over-The-Top products), Tiscali, like the other telecommunications
companies, has rationalised its internal processes implementing rigorous cost cutting programmes to
preserve margins and maintain the competitive position, as well as to try and diversify its revenue
streams in web and Over-The-Top services.
During 2014, from an operational perspective and within a context involving competitive pressure in
the market of accesses from a fixed network, management continued to pursue the following: