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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of November, 2007
Commission File Number: 001-13464
Telecom Argentina S.A.
(Translation of registrant’s name into English)
Alicia Moreau de Justo, No. 50, 1107
Buenos Aires, Argentina
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes ¨ No x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ¨ No x
Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes ¨ No x
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
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Telecom Argentina S.A.
| Item | ||
| 1. |
Table of Contents
FOR IMMEDIATE RELEASE
Market Cap: P$15 billion
(November 8, 2007)
Contacts:
Pedro Insussarry
Pablo Caride
Telecom Argentina
(54-11) 4968-3743/3602
TELECOM ARGENTINA S.A. ANNOUNCES CONSOLIDATED NINE-MONTH PERIOD (“9M07”) and THIRD QUARTER RESULTS FOR FISCAL YEAR 2007 (“3Q07”)*
| • | The Telecom Argentina Group maintained an important expansion of its business in the nine-month period ended September 30, 2007. Consolidated revenues grew 24% vs. 9M06, totaling P$6,515 million. Revenues generated by the Cellular and Internet & Data Transmission businesses increased 37% and 19%, respectively. |
| • | The Cellular customer base reached 11.7 million (+35%), broadband subscribers totaled 677,000 (+81%), while fixed lines in service increased 3% to 4.2 million. |
| • | Operating Profit before Depreciation and Amortization (“OPBDA”) reached P$2,252 million (+30% vs. 9M06), equivalent to 35% of net revenues. Operating Profit increased by 78%, totaling P$1,201 million. |
| • | Net Income reached P$614 million, which includes results for discontinued operations by P$102 million (related to the sale of Publicom in 1Q07). |
| • | Net Debt (before NPV effect) declined to P$ 2,516 million (-P$1.261 million vs. September, 2006), primarily as a result of the cash flow generated by operations. The ratio of Net Debt to OPBDA declined from 1.6x as of the end of 9M06, to 0.8x. |
| As of September-30 | D | D% | ||||||||
| 2007 | 2006 | |||||||||
| Consolidated Net Revenues (in MM P$) |
6,515 | 5,242 | 1,273 | 24 | % | |||||
| Voice, Data & Internet |
2,420 | 2,249 | 171 | 8 | % | |||||
| Cellular |
4,095 | 2,993 | 1,102 | 37 | % | |||||
| Operating Profit before D&A (in MM P$) |
2,252 | 1,730 | 522 | 30 | % | |||||
| Operating Profit (in MM P$) |
1,201 | 675 | 526 | 78 | % | |||||
| Net Income (in MM P$) |
614 | 164 | 450 | 274 | % | |||||
| Shareholder’s equity (in MM P$) |
2,748 | 2,043 | 705 | 35 | % | |||||
| Net Financial Debt - Before NPV effect (in MM P$) |
2,516 | 3,777 | (1,261 | ) | -33 | % | ||||
| Net Financial Debt - Book value (in MM P$) |
2,382 | 3,579 | (1,197 | ) | -33 | % | ||||
| CAPEX (in MM P$) |
981 | 755 | 226 | 30 | % | |||||
| Lines in service (Fixed lines -in thousands) |
4,170 | 4,056 | 114 | 3 | % | |||||
| Cellular customers (in thousands) |
11,665 | 8,624 | 3,041 | 35 | % | |||||
| Personal (Argentina) |
10,161 | 7,675 | 2,486 | 32 | % | |||||
| Núcleo (Paraguay) |
1,504 | 949 | 555 | 58 | % | |||||
| ADSL customers (in thousands) |
677 | 375 | 302 | 81 | % | |||||
| Fixed line traffic (in MM minutes, Internet Traffic not included) |
12,528 | 12,516 | 12 | 0 | % | |||||
| Incoming/Outgoing cellular voice traffic in Arg.(in MM minutes) |
7,147 | 5,380 | 1,767 | 33 | % | |||||
| Average Revenue per user (ARPU ) Fixed Telephony/voice (in P$) |
39 | 39 | 0 | 0 | % | |||||
| Average Revenue per user (ARPU ) Cellular Telephony Arg. (in P$) |
38 | 38 | 0 | 0 | % | |||||
| * | Non-financial data unaudited |
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Buenos Aires, November 8, 2007 – Telecom Argentina (BASE: TECO2, NYSE: TEO), one of Argentina’s leading telecommunications groups, announced today a Net Income of P$614 million for the nine-month period ended September 30, 2007.
| 9M 07 | 9M 06 | D | D% | ||||||||
| Net Revenues (MMP$) |
6,515 | 5,242 | 1,273 | 24 | % | ||||||
| Net Income (MMP$) |
614 | 164 | 450 | ||||||||
| Earnings per Share ($) |
0.62 | 0.17 | 0.46 | ||||||||
| Earnings per ADR ($) |
3.12 | 0.83 | 2.29 | ||||||||
| OPBDA * |
35 | % | 33 | % | |||||||
| Operating Profit * |
18 | % | 13 | % | |||||||
| Net Income * |
9 | % | 3 | % |
| * | As a percentage of Revenues |
During 9M07, Consolidated Net Revenues increased 24% (+P$1,273 million vs. 9M06) to P$6,515 million, mainly fueled by the cellular and broadband businesses.
Moreover, OPBDA increased by 30% (+P$522 million) to P$2,252 million (35% of Consolidated Net Revenues, +200 bps).
Company Activities
Net Revenues
The evolution in Consolidated Net Revenues by reportable segment was as follows:
Voice, Data Transmission & Internet
Revenues generated by these services amounted to P$2,420 million, +8% vs. 9M06.
Voice
Total Revenues for this service reached P$1,910 million (+5%).
Monthly Charges and Supplementary Services increased by P$22 million or 4%, to P$555 million, as lines in service grew by 2%.
Revenues generated by traffic (Local Measured Service, Domestic Long Distance and International Telephony) totaled P$905 million, with an increase of 4% vs. 9M06.
Interconnection revenues amounted to P$273 million (+20%), mainly fueled by higher cellular traffic.
Other & Public Telephony
Other revenues reached P$177 million, decreasing by 7% mainly due to the decline in traffic.
Internet and Data Transmission
Mainly due to the increase in broadband connections, Internet continues to deliver revenue growth to the wireline business. During 9M07, revenues from this business grew 22% vs. 9M06 to P$384 million.
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Moreover, Telecom’s ADSL subscribers reached 677,000 (+302,000 or +81% vs. 9M06). Therefore, lines with ADSL connection accounted for approximately 16% of Telecom’s lines in service.
Telecom confirms its market approach, based on delivering higher velocity solutions, allowing its customers to access increasingly complex multimedia content as well as new value- added services. Telecom Argentina recently announced a significant improvement of its Broadband portfolio, by automatically upgrading its Arnet 640 K customers to Arnet 1 Mb product with no additional charge. In addition, Telecom launched the Arnet 20 Mb product, the fastest connection available in the Argentine market.
Revenues generated by Data transmission amounted to P$126 million, (+12% vs. 9M06). The Company continues to work actively in the corporate accounts, public sector and the SME segment, positioning itself as an integrated provider of communications and connectivity solutions.
Cellular Telephony
The Cellular Telephony business generated revenues of P$4,095 million in 9M07.
Telecom Personal in Argentina
As of September 30, 2007, Personal’s subscribers reached 10.2 million (+2.5 million or +32% vs. 9M06). Approximately 67% of the overall subscriber base was prepaid and 33% was postpaid. By the end of 9M07, subscribers with GSM technology represented 96% of the total subscriber base.
Total voice traffic increased by 33% vs. 9M06 while outgoing SMS traffic increased from an average of 508 million messages per month to an average of 839 million (+65%). Moreover, the Average Monthly Revenue per User (“ARPU”) remained stable at P$38, when compared to 9M06. Value-Added Services accounted for 27% of ARPU.
Revenues totaled P$3,799 million (+P$1,051 million or +38% vs. 9M06). Service revenues increased by 43%, while handset sales grew 9% in the period, totaling P$401 million.
Reconfirming its strong focus on technological innovation, Personal continued the expansion of its 3G services to Cordoba and Rosario cities, therefore becoming the first 3G operation outside Buenos Aires.
In terms of products and services, should be mentioned the launch of “Servicio de Localización Móvil”, a business application developed for sales forces, and “Navegador Personal”, incorporating satellite navigation facilities into existing Blackberry services. In addition, Personal is the first Latin American operator to provide international roaming in 3G.
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Finally, Personal continued to expand its commercial network, by inaugurating the country’s largest customer care center in Cordoba.
Núcleo
Personal’s controlled subsidiary that operates in Paraguay, generated revenues equivalent to P$296 million (+21% vs. 9M06).
By the end of the quarter, the subscriber base reached approximately 1.5 million, +58% vs. 9M06. Prepaid and Postpaid customers represented 89% and 11%, respectively, while GSM subscribers represented 85% of the overall subscriber base.
Consolidated Operating Costs
The Cost of Services Provided, Administrative Expenses and Selling Expenses totaled P$5,314 million in 9M07, which represents an increase of P$747 million or +16% vs. 9M06 with the following breakdown:
| • | Salaries and Social Security Contributions: P$712 million (+18%), affected by wage adjustments and a minor headcount increase in the cellular business. |
| • | Taxes: P$467 million (+23%), in line with the general evolution of the business. |
| • | Agents and Prepaid Card Commissions: $508 million, (+39%), due to the expansion in terms of subscribers and traffic. |
| • | Advertising: P$199 million (+38%), to support commercial activity in cellular and internet. |
| • | Cost of cellular handsets: increased to P$597 million (-9%) as a consequence of fewer handset sales, in the context of an increasingly penetrated market and decreased in the migration process of TDMA to GSM handsets. |
| • | TLRD and Roaming: P$544 million (+44%) due to increased traffic among cellular operators. |
| • | Depreciation of Fixed and Intangible Assets: P$1,051 million, stable when compared to 9M06. Telecom Argentina totaled P$626 million and Telecom Personal $425 million (-13% y +26%) respectively. |
Consolidated Financial and Holding Results
Financial and Holding Results resulted in a loss of P$323 million, as compared to the P$413 million loss registered in 9M06. This improvement is mainly due to lower net interest expenses by P$138 million (mainly due to the reduction in net debt).
Net Debt
As of September 30, 2007, Net Debt (Loans before the effect of NPV valuation, minus Cash, Banks, Current Investments and Other credits derived from derivative Investments) amounted to P$2,516 million, a reduction of P$1.261 million as compared to September 2006. Interest accrued on the Company´ s debt totaled P$227 million.
During October 2007 Telecom Argentina performed a prepayment on its outstanding Notes equivalent to the remaining 26% of the mandatory amortization scheduled for April, 2010 and 73.6% of the mandatory amortization scheduled for October, 2010.
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Consolidated Capital Expenditures
A total amount of P$981 million invested in fixed and intangibles assets was allocated to the cellular business (P$426 million) and the Voice, Data and Internet businesses (P$555 million).
Main Capex projects in the Voice, Data and Internet Businesses relates to the expansion of ADSL services and the upgrade of the network for services of a new generation, while in the cellular business improvement of the network (capacity, coverage and 3G), and the launch of new and innovative value added services were areas of focus.
Commercial Initiatives
In concern with the massive market, the Company lounged for the first time in the country, the SMS (Short Message Service) for fixed lines, performance that showed the beginning of some innovations that Telecom would offer to its residential clients and which would change the way of communicating at home
***********
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Telecom is the parent company of a leading telecommunications group in Argentina, where it offers directly or through its controlled subsidiaries local and long distance fixed-line telephony, cellular, data transmission and Internet services, among others services. Additionally, through a controlled subsidiary, the Telecom Group offers cellular services in Paraguay. The Company commenced operations on November 8, 1990, upon the Argentine government’s transfer of the telecommunications system in the northern region of Argentina.
Nortel Inversora S.A. (“Nortel”), which acquired the majority of the Company from the Argentine government, holds 54.74% of Telecom’s common stock. Nortel is a holding company where the common stock (approximately 68% of capital stock) is owned by Sofora Telecomunicaciones S.A. Additionally, Nortel capital stock is comprised of preferred shares that are held by minority shareholders.
As of September 30, 2007, Telecom had 984,380,978 shares outstanding.
| (*) | Employee Stock Ownership Program |
For more information, please contact the Financial Planning & Investor Relations Department:
| Pedro Insussarry 54-11-4968-3743 |
Mariano Martire 54-11-4968-3718 |
Gastón Urbina 54-11-4968-6236 |
Ruth Fuhrmann 54-11-4968-4448 |
Voice Mail: 54-11-4968-3628
Fax: 54-11-4313-5842
E-mail: relinver@ta.telecom.com.ar
For information about Telecom Group services, visit:
www.personal.com.ar
www.personal.com.py
www.arnet.com.ar
Disclaimer
This document may contain statements that could constitute forward-looking statements, including, but not limited to, the Company’s expectations for its future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity and capital structure; the effects of its debt restructuring process; the impact of emergency laws enacted by the Argentine Government; and the impact of rate changes and competition on the Company’s future financial performance. Forward-looking statements may be identified by words such as “believes,” “expects,” “anticipates,” “projects,” “intends,” “should,” “seeks,” “estimates,” “future” or other similar expressions. Forward-looking statements involve risks and uncertainties that could significantly affect the Company’s expected results. The risks and uncertainties include, but are not limited to, the impact of emergency laws enacted by the Argentine government that have resulted in the repeal of Argentina’s Convertibility law, devaluation of the peso, various changes in restrictions on the ability to exchange pesos into foreign currencies, and currency transfer policy generally, the “pesification” of tariffs charged for public services, the elimination of indexes to adjust rates charged for public services and the Executive branch announcement to renegotiate the terms of the concessions granted to public service providers, including Telecom. Due to extensive changes in laws and economic and business conditions in Argentina, it is difficult to predict the impact of these changes on the Company’s financial condition. Other factors may include, but are not limited to, the evolution of the economy in Argentina, growing inflationary pressure and evolution in consumer spending and the outcome of certain legal proceedings. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as the date of this document. The Company undertakes no obligation to release publicly the results of any revisions to forward-looking statements which may be made to reflect events and circumstances after the date of this press release, including, without limitation, changes in the Company’s business or to reflect the occurrence of unanticipated events. Readers are encouraged to consult the Company’s Annual Report on Form 20-F, as well as periodic filings made on Form 6-K, which are filed with or furnished to the United States Securities and Exchange Commission for further information concerning risks and uncertainties faced by Telecom.
*******
(Financial tables follow)
******
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Carlos Felices
Chairman
*******
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TELECOM ARGENTINA S.A.
Consolidated information
NINE MONTH PERIOD AND THIRD QUARTER - FISCAL YEAR 2007
(In millions of Argentine pesos, except statistical data)
| 1- |
Consolidated Balance Sheet |
|||||||||||||
| Sep-30 2007 |
Dec-31 2006 |
D$ | D% | |||||||||||
| Cash, equivalents and investments |
1,211 | 661 | 550 | 83 | % | |||||||||
| Trade receivables |
813 | 743 | 70 | 9 | % | |||||||||
| Other current assets |
443 | 363 | 80 | 22 | % | |||||||||
| TOTAL CURRENT ASSETS |
2,467 | 1,767 | 700 | 40 | % | |||||||||
| Fixed & Intangible assets |
6,400 | 6,520 | (120 | ) | -2 | % | ||||||||
| Other non-current assets |
409 | 433 | (24 | ) | -6 | % | ||||||||
| TOTAL NON-CURRENT ASSETS |
6,809 | 6,953 | (144 | ) | -2 | % | ||||||||
| TOTAL ASSETS |
9,276 | 8,720 | 556 | 6 | % | |||||||||
| Accounts payable |
1,424 | 1,481 | (57 | ) | -4 | % | ||||||||
| Loans |
1,041 | 1,395 | (354 | ) | -25 | % | ||||||||
| Reserves |
79 | 85 | (6 | ) | -7 | % | ||||||||
| Other current liabilities |
440 | 412 | 28 | 7 | % | |||||||||
| TOTAL CURRENT LIABILITIES |
2,984 | 3,373 | (389 | ) | -12 | % | ||||||||
| Loans |
2,744 | 2,703 | 41 | 2 | % | |||||||||
| Reserves |
256 | 234 | 22 | 9 | % | |||||||||
| Other non-current liabilities |
478 | 209 | 269 | 129 | % | |||||||||
| TOTAL NON-CURRENT LIABILITIES |
3,478 | 3,146 | 332 | 11 | % | |||||||||
| TOTAL LIABILITIES |
6,462 | 6,519 | (57 | ) | -1 | % | ||||||||
| Minority Interest |
66 | 72 | (6 | ) | -8 | % | ||||||||
| Shareholders’ equity |
2,748 | 2,129 | 619 | 29 | % | |||||||||
| TOTAL LIABILITIES AND EQUITY |
9,276 | 8,720 | 556 | 6 | % | |||||||||
| 2- |
Consolidated Loans |
|||||||||||||
| Sep-30 2007 |
Dec-31 2006 |
D$ | D% | |||||||||||
| Corporate Bonds |
710 | 1,014 | (304 | ) | -30 | % | ||||||||
| Banks and others |
225 | 334 | (109 | ) | -33 | % | ||||||||
| Accrued interest |
98 | 42 | 56 | 133 | % | |||||||||
| Derivatives |
8 | 5 | 3 | 60 | % | |||||||||
| TOTAL CURRENT LOANS |
1,041 | 1,395 | (354 | ) | -25 | % | ||||||||
| Corporate Bonds |
2,873 | 2,798 | 75 | 3 | % | |||||||||
| Banks and others |
5 | 51 | (46 | ) | -90 | % | ||||||||
| Net Present Value |
(134 | ) | (146 | ) | 12 | -8 | % | |||||||
| TOTAL NON-CURRENT LOANS |
2,744 | 2,703 | 41 | 2 | % | |||||||||
| TOTAL LOANS |
3,785 | 4,098 | (313 | ) | -8 | % | ||||||||
| Derivatives valuation effect (Other Credits) |
192 | 85 | 107 | 126 | % | |||||||||
| Cash, equivalents and investments |
1,211 | 661 | 550 | 83 | % | |||||||||
| Net Financial Debt (without N PV effect) |
2,516 | 3,498 | (982 | ) | -28 | % | ||||||||
| Sep-30 | D$ |
D% |
||||||||||||
| 2007 | 2006 | |||||||||||||
| Financial and Holding results |
||||||||||||||
| Financial results generated by assets |
||||||||||||||
| Interest on short term investments |
71 | 57 | 14 | 25 | % | |||||||||
| Foreign currency exchange gains |
23 | 9 | 14 | 156 | % | |||||||||
| Holding results generated by inventories |
(46 | ) | (3 | ) | (43 | ) | ||||||||
| Other financial results |
1 | 10 | (9 | ) | ||||||||||
| Total Financial results generated by assets |
49 | 73 | (24 | ) | -33 | % | ||||||||
| Financial results generated by liabilities |
||||||||||||||
| Interest on debt |
(222 | ) | (346 | ) | 124 | -36 | % | |||||||
| Foreign currency exchange losses |
(150 | ) | (140 | ) | (10 | ) | 7 | % | ||||||
| Total Financial results generated by liabilities |
(372 | ) | (486 | ) | 114 | -23 | % | |||||||
| Total Financial and Holding results |
(323 | ) | (413 | ) | 90 | -22 | % | |||||||
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| 3- |
Consolidated Income Statement |
|||||||||||||
| Nine-Month Comparison |
||||||||||||||
| Sep-30 | D$ | D% | ||||||||||||
| 2007 | 2006 | |||||||||||||
| Net revenues |
6,515 | 5,242 | 1,273 | 24 | % | |||||||||
| Cost of services provided |
(3,559 | ) | (3,169 | ) | (390 | ) | 12 | % | ||||||
| GROSS PROFIT |
2,956 | 2,073 | 883 | 43 | % | |||||||||
| Administrative expenses |
(243 | ) | (204 | ) | (39 | ) | 19 | % | ||||||
| Selling expenses |
(1,512 | ) | (1,194 | ) | (318 | ) | 27 | % | ||||||
| OPERATING PROFIT |
1,201 | 675 | 526 | 78 | % | |||||||||
| Equity income from related companies |
— | 6 | (6 | ) | -100 | % | ||||||||
| Financial and holding results |
(323 | ) | (413 | ) | 90 | -22 | % | |||||||
| Other expenses, net |
(76 | ) | (127 | ) | 51 | -40 | % | |||||||
| RESULTS FROM ORDINARY OPERATIONS |
802 | 141 | 661 | 469 | % | |||||||||
| Taxes on income |
(275 | ) | 37 | (312 | ) | -843 | % | |||||||
| Minority interest |
(15 | ) | (15 | ) | — | 0 | % | |||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
512 | 163 | 349 | |||||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
102 | 1 | 101 | 10,100 | % | |||||||||
| NET INCOME |
614 | 164 | 450 | |||||||||||
| Operating (Loss)/ Profit before D & A |
2,252 | 1,730 | 522 | 30 | % | |||||||||
| As a % of Net Revenues |
35 | % | 33 | % | ||||||||||
| 4- |
Consolidated Income Statement |
|||||||||||||
| Three-Months Comparison |
||||||||||||||
| Sep-30 | D$ | D% | ||||||||||||
| 2007 | 2006 | |||||||||||||
| Net revenues |
2,313 | 1,894 | 419 | 22 | % | |||||||||
| Cost of services provided |
(1,235 | ) | (1,140 | ) | (95 | ) | 8 | % | ||||||
| GROSS PROFIT |
1,078 | 754 | 324 | 43 | % | |||||||||
| Administrative expenses |
(81 | ) | (76 | ) | (5 | ) | 7 | % | ||||||
| Selling expenses |
(523 | ) | (424 | ) | (99 | ) | 23 | % | ||||||
| OPERATING PROFIT |
474 | 254 | 220 | 87 | % | |||||||||
| Equity income from related companies |
— | — | — | — | ||||||||||
| Financial and holding results |
(105 | ) | (116 | ) | 11 | -9 | % | |||||||
| Other expenses, net |
(18 | ) | (41 | ) | 23 | -56 | % | |||||||
| RESULTS FROM ORDINARY OPERATIONS |
351 | 97 | 254 | 262 | % | |||||||||
| Taxes on income |
(117 | ) | (28 | ) | (89 | ) | 318 | % | ||||||
| Minority interest |
(7 | ) | (5 | ) | (2 | ) | 40 | % | ||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
227 | 64 | 163 | |||||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
— | 1 | (1 | ) | ||||||||||
| NET (LOSS)/INCOME |
227 | 65 | 162 | 249 | % | |||||||||
| Operating (Loss)/ Profit before D & A |
838 | 609 | 229 | 38 | % | |||||||||
| As a % of Net Revenues |
36 | % | 32 | % | ||||||||||
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| 5- |
Consolidated Revenues Breakdown |
|||||||||||
| Nine-Month Comparison |
||||||||||||
| Sep-30 | D$ | D% | ||||||||||
| 2007 | 2006 | |||||||||||
| Fixed Telephony |
1,716 | 1,648 | 68 | 4 | % | |||||||
| Measured service |
||||||||||||
| Local |
346 | 337 | 9 | 3 | % | |||||||
| D L D |
365 | 360 | 5 | 1 | % | |||||||
| Monthly charges |
555 | 533 | 22 | 4 | % | |||||||
| Public telephones |
89 | 100 | (11 | ) | -11 | % | ||||||
| Interconnection |
273 | 228 | 45 | 20 | % | |||||||
| Others |
88 | 90 | (2 | ) | -2 | % | ||||||
| International Telephony |
194 | 173 | 21 | 12 | % | |||||||
| Data transmission & Internet |
510 | 428 | 82 | 19 | % | |||||||
| Data |
126 | 113 | 13 | 12 | % | |||||||
| Internet |
384 | 315 | 69 | 22 | % | |||||||
| Cellular Telephony |
4,095 | 2,993 | 1,102 | 37 | % | |||||||
| Telecom Personal |
3,799 | 2,748 | 1,051 | 38 | % | |||||||
| Monthly fee and measured service |
886 | 633 | 253 | 40 | % | |||||||
| Pre-paid card |
1,361 | 872 | 489 | 56 | % | |||||||
| Calling Party Pays |
407 | 355 | 52 | 15 | % | |||||||
| TLRD* |
426 | 298 | 128 | 43 | % | |||||||
| Handset sales |
401 | 369 | 32 | 9 | % | |||||||
| Others |
318 | 221 | 97 | 44 | % | |||||||
| Núcleo |
296 | 245 | 51 | 21 | % | |||||||
| Monthly fee and measured service |
49 | 46 | 3 | 7 | % | |||||||
| Pre-paid card |
161 | 120 | 41 | 34 | % | |||||||
| Calling Party Pays |
30 | 29 | 1 | 3 | % | |||||||
| TLRD* |
38 | 30 | 8 | 27 | % | |||||||
| Handset sales |
5 | 5 | — | 0 | % | |||||||
| Others |
13 | 15 | (2 | ) | -13 | % | ||||||
| TOTAL NET REVENUES |
6,515 | 5,242 | 1,273 | 24 | % | |||||||
| * Charges for the temination of calls of the cellular operators. |
||||||||||||
| 6- |
Consolidated Revenues Breakdown |
|||||||||||
| Three-Months Comparison |
||||||||||||
| Sep-30 | D$ | D% | ||||||||||
| 2007 | 2006 | |||||||||||
| Fixed Telephony |
586 | 561 | 25 | 4 | % | |||||||
| Measured service |
||||||||||||
| Local |
119 | 113 | 6 | 5 | % | |||||||
| D L D |
122 | 127 | (5 | ) | -4 | % | ||||||
| Monthly charges |
189 | 179 | 10 | 6 | % | |||||||
| Public telephones |
28 | 31 | (3 | ) | -10 | % | ||||||
| Interconnection |
99 | 82 | 17 | 21 | % | |||||||
| Others |
29 | 29 | — | 0 | % | |||||||
| International Telephony |
66 | 55 | 11 | 20 | % | |||||||
| Data transmission & Internet |
179 | 148 | 31 | 21 | % | |||||||
| Data |
45 | 38 | 7 | 18 | % | |||||||
| Internet |
134 | 110 | 24 | 22 | % | |||||||
| Cellular Telephony |
1,482 | 1,130 | 352 | 31 | % | |||||||
| Telecom Personal |
1,363 | 1,032 | 331 | 32 | % | |||||||
| Monthly fee and measured service |
319 | 229 | 90 | 39 | % | |||||||
| Pre-paid card |
512 | 356 | 156 | 44 | % | |||||||
| Calling Party Pays |
142 | 125 | 17 | 14 | % | |||||||
| TLRD* |
159 | 110 | 49 | 45 | % | |||||||
| Handset sales |
134 | 141 | (7 | ) | -5 | % | ||||||
| Others |
97 | 71 | 26 | 37 | % | |||||||
| Núcleo |
119 | 98 | 21 | 21 | % | |||||||
| Monthly fee and measured service |
19 | 17 | 2 | 12 | % | |||||||
| Pre-paid card |
66 | 50 | 16 | 32 | % | |||||||
| Calling Party Pays |
11 | 11 | — | 0 | % | |||||||
| TLRD* |
16 | 12 | 4 | 33 | % | |||||||
| Handset sales |
2 | 1 | 1 | 100 | % | |||||||
| Others |
5 | 7 | (2 | ) | -29 | % | ||||||
| TOTAL NET REVENUES |
2,313 | 1,894 | 419 | 22 | % | |||||||
| * Charges for the temination of calls of the cellular operators. |
||||||||||||
10
Table of Contents
| 7- |
Consolidated Income Statement by segments |
||||||||||||||||
| Nine Month Period - Fiscal Year 2007 |
|||||||||||||||||
| (In million of Argentine pesos) |
|||||||||||||||||
| Segments | Variation vs 9M 06 | ||||||||||||||||
| Voice, Data and Internet |
Cellular Telephony |
Consolidated | D$ | D% | |||||||||||||
| NET REVENUES |
2,420 | 4,095 | 6,515 | 1,273 | 24 | % | |||||||||||
| Salaries and social security contributions |
(557 | ) | (155 | ) | (712 | ) | (108 | ) | 18 | % | |||||||
| Taxes |
(143 | ) | (324 | ) | (467 | ) | (88 | ) | 23 | % | |||||||
| Materials and supplies |
(223 | ) | (94 | ) | (317 | ) | (76 | ) | 32 | % | |||||||
| Doubtful accounts |
(12 | ) | (47 | ) | (59 | ) | (8 | ) | 16 | % | |||||||
| Interconnection cost |
(113 | ) | — | (113 | ) | 6 | -5 | % | |||||||||
| Settlement charges |
(101 | ) | — | (101 | ) | (24 | ) | 31 | % | ||||||||
| Lease of lines and circuits |
(40 | ) | (26 | ) | (66 | ) | (26 | ) | 65 | % | |||||||
| Service fees |
(97 | ) | (113 | ) | (210 | ) | (39 | ) | 23 | % | |||||||
| Advertising |
(51 | ) | (148 | ) | (199 | ) | (55 | ) | 38 | % | |||||||
| Agent and Prepaid card commissions |
(19 | ) | (489 | ) | (508 | ) | (143 | ) | 39 | % | |||||||
| Cost of cellular handsets |
— | (597 | ) | (597 | ) | 58 | -9 | % | |||||||||
| Roaming and TLRD |
— | (544 | ) | (544 | ) | (165 | ) | 44 | % | ||||||||
| Others |
(164 | ) | (206 | ) | (370 | ) | (83 | ) | 29 | % | |||||||
| Operating Profit before D & A |
900 | 1,352 | 2,252 | 522 | 30 | % | |||||||||||
| Depreciation of fixed assets |
(616 | ) | (403 | ) | (1,019 | ) | (1 | ) | 0 | % | |||||||
| Amortization of intangible assets |
(10 | ) | (22 | ) | (32 | ) | 5 | -14 | % | ||||||||
| OPERATING RESULTS |
274 | 927 | 1,201 | 526 | 78 | % | |||||||||||
| EQUITY INCOME FROM RELATED COMPANIES |
— | — | — | (6 | ) | 0 | % | ||||||||||
| FINANCIAL AND HOLDING INCOME |
(172 | ) | (151 | ) | (323 | ) | 90 | -22 | % | ||||||||
| OTHER EXPENSES, NET |
(60 | ) | (16 | ) | (76 | ) | 51 | -40 | % | ||||||||
| INCOME FROM ORDINARY OPERATIONS |
42 | 760 | 802 | 661 | 0 | % | |||||||||||
| Taxes on income |
(103 | ) | (172 | ) | (275 | ) | (312 | ) | 0 | % | |||||||
| Minority interest |
— | (15 | ) | (15 | ) | (178 | ) | 0 | % | ||||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
(61 | ) | 573 | 512 | 511 | 0 | % | ||||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
102 | — | 102 | (62 | ) | 0 | % | ||||||||||
| NET INCOME |
41 | 573 | 614 | 614 | — | ||||||||||||
| Consolidated Income Statement by segments |
|||||||||||||||||
| Nine Month Period - Fiscal Year 2006 |
|||||||||||||||||
| (In million of Argentine pesos) |
|||||||||||||||||
| Segments | |||||||||||||||||
| Voice, Data and Internet |
Cellular Telephony |
Consolidated | |||||||||||||||
| NET REVENUES |
2,249 | 2,993 | 5,242 | ||||||||||||||
| Salaries and social security contributions |
(488 | ) | (116 | ) | (604 | ) | |||||||||||
| Taxes |
(128 | ) | (251 | ) | (379 | ) | |||||||||||
| Materials and supplies |
(178 | ) | (63 | ) | (241 | ) | |||||||||||
| Doubtful accounts |
(12 | ) | (39 | ) | (51 | ) | |||||||||||
| Interconnection cost |
(119 | ) | — | (119 | ) | ||||||||||||
| Settlement charges |
(77 | ) | — | (77 | ) | ||||||||||||
| Lease of lines and circuits |
(22 | ) | (18 | ) | (40 | ) | |||||||||||
| Service fees |
(76 | ) | (95 | ) | (171 | ) | |||||||||||
| Advertising |
(37 | ) | (107 | ) | (144 | ) | |||||||||||
| Agent and Prepaid card commissions |
(16 | ) | (349 | ) | (365 | ) | |||||||||||
| Cost of cellular handsets |
— | (655 | ) | (655 | ) | ||||||||||||
| Roaming and TLRD |
— | (379 | ) | (379 | ) | ||||||||||||
| Others |
(131 | ) | (156 | ) | (287 | ) | |||||||||||
| Operating Profit before D & A |
965 | 765 | 1,730 | ||||||||||||||
| Depreciation of fixed assets |
(709 | ) | (309 | ) | (1,018 | ) | |||||||||||
| Amortization of intangible assets |
(8 | ) | (29 | ) | (37 | ) | |||||||||||
| OPERATING RESULTS |
248 | 427 | 675 | ||||||||||||||
| EQUITY INCOME FROM RELATED COMPANIES |
— | 6 | 6 | ||||||||||||||
| FINANCIAL AND HOLDING INCOME |
(317 | ) | (96 | ) | (413 | ) | |||||||||||
| OTHER EXPENSES, NET |
(80 | ) | (47 | ) | (127 | ) | |||||||||||
| INCOME FROM ORDINARY OPERATIONS |
(149 | ) | 290 | 141 | |||||||||||||
| Taxes on income |
44 | (7 | ) | 37 | |||||||||||||
| Minority interest |
— | (15 | ) | (15 | ) | ||||||||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
(105 | ) | 268 | 163 | |||||||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
1 | — | 1 | ||||||||||||||
| NET INCOME |
(104 | ) | 268 | 164 | |||||||||||||
11
Table of Contents
| 8- |
Consolidated Income Statement by segments |
||||||||||||||||
| Three month period - FY 2007 |
|||||||||||||||||
| (In million of Argentine pesos) |
|||||||||||||||||
| Segments | Variation vs 3Q 06 | ||||||||||||||||
| Voice, Data and Internet |
Cellular Telephony |
Consolidated | D$ | D% | |||||||||||||
| NET REVENUES |
831 | 1,482 | 2,313 | 1,273 | 67 | % | |||||||||||
| Salaries and social security contributions |
(193 | ) | (56 | ) | (249 | ) | (108 | ) | 52 | % | |||||||
| Taxes |
(47 | ) | (99 | ) | (146 | ) | (88 | ) | 62 | % | |||||||
| Materials and supplies |
(79 | ) | (40 | ) | (119 | ) | (76 | ) | 86 | % | |||||||
| Doubtful accounts |
(3 | ) | (18 | ) | (21 | ) | (8 | ) | 57 | % | |||||||
| Interconnection cost |
(37 | ) | — | (37 | ) | 6 | -14 | % | |||||||||
| Settlement charges |
(40 | ) | — | (40 | ) | (24 | ) | 100 | % | ||||||||
| Lease of lines and circuits |
(14 | ) | — | (14 | ) | (26 | ) | 200 | % | ||||||||
| Service fees |
(37 | ) | (46 | ) | (83 | ) | (39 | ) | 55 | % | |||||||
| Advertising |
(16 | ) | (55 | ) | (71 | ) | (55 | ) | 96 | % | |||||||
| Agent and Prepaid card commissions |
(7 | ) | (161 | ) | (168 | ) | (143 | ) | 113 | % | |||||||
| Cost of cellular handsets |
— | (193 | ) | (193 | ) | 58 | -22 | % | |||||||||
| Roaming and TLRD |
— | (197 | ) | (197 | ) | (165 | ) | 123 | % | ||||||||
| Others |
(62 | ) | (75 | ) | (137 | ) | (83 | ) | 83 | % | |||||||
| Operating Profit before D & A |
296 | 542 | 838 | 522 | 86 | % | |||||||||||
| Depreciation of fixed assets |
(203 | ) | (151 | ) | (354 | ) | (1 | ) | 0 | % | |||||||
| Amortization of intangible assets |
(4 | ) | (6 | ) | (10 | ) | 5 | -42 | % | ||||||||
| OPERATING RESULTS |
89 | 385 | 474 | 526 | 207 | % | |||||||||||
| EQUITY INCOME FROM RELATED COMPANIES |
— | — | — | (6 | ) | 0 | % | ||||||||||
| FI NANCIAL AND HOLDING INCOME |
(48 | ) | (57 | ) | (105 | ) | 90 | -78 | % | ||||||||
| OTHER EXPENSES, NET |
(15 | ) | (3 | ) | (18 | ) | 51 | -124 | % | ||||||||
| INCOME FROM ORDINARY OPERATIONS |
26 | 325 | 351 | 661 | -1612 | % | |||||||||||
| Taxes on income |
(40 | ) | (77 | ) | (117 | ) | (312 | ) | -322 | % | |||||||
| Minority interest |
— | (7 | ) | (7 | ) | (178 | ) | 636 | % | ||||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
(14 | ) | 241 | 227 | 511 | ||||||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
— | — | — | (62 | ) | ||||||||||||
| NET INCOME |
(14 | ) | 241 | 227 | 614 | — | |||||||||||
| Consolidated Income Statement by Activities |
|||||||||||||||||
| Three month period - FY 2006 |
|||||||||||||||||
| (In million of Argentine pesos) |
|||||||||||||||||
| Segments | |||||||||||||||||
| Voice, Data and Internet |
Cellular Telephony |
Consolidated | |||||||||||||||
| NET REVENUES |
764 | 1,130 | 1,894 | ||||||||||||||
| Salaries and social security contributions |
(164 | ) | (44 | ) | (208 | ) | |||||||||||
| Taxes |
(45 | ) | (98 | ) | (143 | ) | |||||||||||
| Materials and supplies |
(58 | ) | (30 | ) | (88 | ) | |||||||||||
| Doubtful accounts |
(3 | ) | (11 | ) | (14 | ) | |||||||||||
| Interconnection cost |
(42 | ) | — | (42 | ) | ||||||||||||
| Settlement charges |
(24 | ) | — | (24 | ) | ||||||||||||
| Lease of lines and circuits |
(7 | ) | (6 | ) | (13 | ) | |||||||||||
| Service fees |
(34 | ) | (37 | ) | (71 | ) | |||||||||||
| Advertising |
(19 | ) | (38 | ) | (57 | ) | |||||||||||
| Agent and Prepaid card commissions |
(7 | ) | (119 | ) | (126 | ) | |||||||||||
| Cost of cellular handsets |
— | (265 | ) | (265 | ) | ||||||||||||
| Roaming and TLRD |
— | (134 | ) | (134 | ) | ||||||||||||
| Others |
(42 | ) | (58 | ) | (100 | ) | |||||||||||
| Operating Profit before D & A |
319 | 290 | 609 | ||||||||||||||
| Depreciation of fixed assets |
(235 | ) | (108 | ) | (343 | ) | |||||||||||
| Amortization of intangible assets |
(2 | ) | (10 | ) | (12 | ) | |||||||||||
| OPERATING RESULTS |
82 | 172 | 254 | ||||||||||||||
| EQUITY INCOME FROM RELATED COMPANIES |
— | — | — | ||||||||||||||
| FINANCIAL AND HOLDING INCOME |
(92 | ) | (24 | ) | (116 | ) | |||||||||||
| OTHER EXPENSES, NET |
(28 | ) | (13 | ) | (41 | ) | |||||||||||
| INCOME FROM ORDINARY OPERATIONS |
(38 | ) | 135 | 97 | |||||||||||||
| Taxes on income |
(14 | ) | (14 | ) | (28 | ) | |||||||||||
| Minority interest |
— | (5 | ) | (5 | ) | ||||||||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
(52 | ) | 116 | 64 | |||||||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
1 | — | 1 | ||||||||||||||
| NET INCOME |
(51 | ) | 116 | 65 | |||||||||||||
12
Table of Contents
TELECOM ARGENTINA S.A.
Unconsolidated Information
NINE MONTH PERIOD AND THIRD QUARTER - FISCAL YEAR 2007
(In millions of Argentine pesos)
| 9- |
Balance Sheet |
|||||||||||||
| Sep-30 2007 |
Dec-31 2006 |
D$ | D% | |||||||||||
| Cash, equivalents and investments |
1,033 | 484 | 549 | 113 | % | |||||||||
| Trade receivables |
422 | 379 | 43 | 11 | % | |||||||||
| Other current assets |
111 | 56 | 55 | 98 | % | |||||||||
| TOTAL CURRENT ASSETS |
1,566 | 919 | 647 | 70 | % | |||||||||
| Other Trade receivables |
380 | 284 | 96 | 34 | % | |||||||||
| Fixed & Intangible assets |
4,058 | 4,191 | (133 | ) | -3 | % | ||||||||
| Investments |
1,087 | 872 | 215 | 25 | % | |||||||||
| Other non-current assets |
5 | 10 | (5 | ) | -50 | % | ||||||||
| TOTAL NON-CURRENT ASSETS |
5,530 | 5,357 | 173 | 3 | % | |||||||||
| TOTAL ASSETS |
7,096 | 6,276 | 820 | 13 | % | |||||||||
| Accounts payable |
698 | 543 | 155 | 29 | % | |||||||||
| Loans |
753 | 1,015 | (262 | ) | -26 | % | ||||||||
| Reserves |
70 | 78 | (8 | ) | -10 | % | ||||||||
| Other current liabilities |
219 | 190 | 29 | 15 | % | |||||||||
| TOTAL CURRENT LIABILITIES |
1,740 | 1,826 | (86 | ) | -5 | % | ||||||||
| Loans |
1,966 | 1,879 | 87 | 5 | % | |||||||||
| Compensation and social benefits payable |
38 | 32 | 6 | 19 | % | |||||||||
| Others liabilities |
422 | 161 | 261 | 162 | % | |||||||||
| Reserves |
182 | 249 | (67 | ) | -27 | % | ||||||||
| TOTAL NON-CURRENT LIABILITIES |
2,608 | 2,321 | 287 | 12 | % | |||||||||
| TOTAL LIABILITIES |
4,348 | 4,147 | 201 | 5 | % | |||||||||
| Shareholders’ equity |
2,748 | 2,129 | 619 | 29 | % | |||||||||
| TOTAL LIABILITIES AND EQUITY |
7,096 | 6,276 | 820 | 13 | % | |||||||||
| 10- |
Income Statement |
|||||||||||||
| Nine-Month Comparison |
||||||||||||||
| 30-Sep | D$ | D% | ||||||||||||
| 2007 | 2006 | |||||||||||||
| Net revenues |
2,756 | 2,495 | 261 | 10 | % | |||||||||
| Cost of services provided |
(1,497 | ) | (1,439 | ) | (58 | ) | -4 | % | ||||||
| GROSS PROFIT |
1,259 | 1,056 | 203 | 19 | % | |||||||||
| Administrative expenses |
(144 | ) | (122 | ) | (22 | ) | -18 | % | ||||||
| Selling expenses |
(506 | ) | (449 | ) | (57 | ) | -13 | % | ||||||
| OPERATING PROFIT |
609 | 485 | 124 | 26 | % | |||||||||
| Equity income from related companies |
235 | 23 | 212 | 0 | % | |||||||||
| Financial & holding results |
(170 | ) | (318 | ) | 148 | 47 | % | |||||||
| Other incomes & expenses net |
(57 | ) | (68 | ) | 11 | 16 | % | |||||||
| RESULTS FROM ORDINARY OPERATIONS |
617 | 122 | 495 | 0 | % | |||||||||
| Taxes on income |
(103 | ) | 44 | (147 | ) | -334 | % | |||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
514 | 166 | 348 | 0 | % | |||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
100 | (2 | ) | 102 | 0 | % | ||||||||
| NET INCOME |
614 | 164 | 450 | 0 | % | |||||||||
| Operating (Loss)/ Profit before D & A |
1,234 | 1,201 | 33 | 3 | % | |||||||||
| As a % of Net Revenues |
48 | % | ||||||||||||
| 11- |
Income Statement |
|||||||||||||
| Three-Months Comparison |
||||||||||||||
| 30-Sep | D$ | D% | ||||||||||||
| 2007 | 2006 | |||||||||||||
| Net revenues |
946 | 854 | 261 | 0 | ||||||||||
| Cost of services provided |
(521 | ) | (484 | ) | (58 | ) | -12 | % | ||||||
| GROSS PROFIT |
425 | 370 | 203 | 55 | % | |||||||||
| Administrative expenses |
(47 | ) | (43 | ) | (22 | ) | -51 | % | ||||||
| Selling expenses |
(174 | ) | (159 | ) | (57 | ) | -36 | % | ||||||
| OPERATING PROFIT |
204 | 168 | 124 | 74 | % | |||||||||
| Equity income from related companies |
122 | 29 | 212 | 0 | % | |||||||||
| Financial & holding results |
(46 | ) | (93 | ) | 148 | 159 | % | |||||||
| Other incomes & expenses net |
(13 | ) | (25 | ) | 11 | 44 | % | |||||||
| RESULTS FROM ORDINARY OPERATIONS |
267 | 79 | 495 | 627 | % | |||||||||
| Taxes on income |
(40 | ) | (14 | ) | (147 | ) | -1050 | % | ||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
227 | 65 | 348 | 535 | % | |||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
— | — | 102 | 0 | % | |||||||||
| NET INCOME |
227 | 65 | 450 | 692 | % | |||||||||
| Operating (Loss)/ Profit before D & A |
411 | 404 | 7 | 2 | % | |||||||||
| As a % of Net Revenues |
43 | % | 47 | % | ||||||||||
13
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Telecom Argentina S.A. | ||||||||||
| Date: | November 9, 2007 | By: | /s/ Carlos Alberto Felices | |||||||
| Name: | Carlos Alberto Felices | |||||||||
| Title: | Chairman of the Board of Directors | |||||||||