Tiscali 2013 Annual Report Download - page 127

Annual financial report as at 31 December 2013
Date
File Name
Status
Page
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Annual Report as at 31
December 2013
127
7.6 Notes to the financial statements
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 balance sheet, 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.
Evaluation of the company as a going-concern and future outlook
Tiscali S.p.A. closed its financial statements as at 31 December 2013 with a loss of EUR 0.8 million
and shareholders’ equity of EUR 61.1 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 4.8 million
and negative consolidated shareholders’ equity of EUR 151.9 million. Furthermore, again 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 of 31 December 2012, the Group’s consolidated loss amounted to EUR 15.8 million, with negative
Group consolidated shareholders’ equity of EUR 147.2 million. Furthermore, as at 31 December 2012,
the Group had a gross financial debt of EUR 197.2 million and current liabilities greater than current
assets (non-financial) for EUR 119.6 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 underway 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 operator to
another with minimum inconvenience and costs, led to greater acceptance by customers of
promotions, and as a consequence a tendency for prices to drop.
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 2013, from an operational point of view, action by the Group continued aimed at improving
efficiency via the rationalisation of the operating and commercial costs and overheads, in particular:
 management continued with action aimed at containing costs and, therefore, the greater
profitability of the telecommunications services;