Seat PG: The Board of Directors approves results for Q1 2003

05/05/2003 - 00:00 PM

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The organizational model provided for by the legislative decree 231/01 has been formalized

SEAT PG GROUP:
• REVENUES: EURO 345 MILLION
    (+3.6% COMPARED TO 03/31/2002)
• GOP: EURO 47,2 MILLION (+74,2% COMPARED TO 03/31/2002)
• OPERATING INCOME: EURO -35,3 MILLION
(EURO -68,9 MILLION AT 03/31/2002)
•  INDEBTEDNESS DECREASED TO EURO 664 MILLION
(EURO 680 MILLION AT 12/31/2002)

SEAT PG S.p.A
• REVENUES: EURO 175,1 MILLION (+24,3% COMPARED TO 03/31/2002)
• GOP: EURO 49.6 MILLION (+27.7% COMPARED TO 03/31/2002)
• OPERATING INCOME: EURO 3.7 MILLION
(EURO -17.4 MILLION AT 03/31/2002)

Upon proposal of Managing Director Paolo Dal Pino, the Board of Directors of Seat Pagine Gialle (Telecom Italia Group), chaired by Riccardo Perissich, approved the Group’s results for Q1 2003. The first quarter closed with a significant increase in revenues and gross operating profit (GOP) compared to the same period of 2002.
The first quarter has always been affected by the strong seasonal effect of the lower number of directories published both in Italy and abroad. Consolidated GOP for the first quarter 2002 accounted only for  8% of consolidated GOP for the year.
In a particularly difficult market situation, the directories area gave a positive contribution to the Group’s performance: revenues increased by 2.8% in Italy and by 4% in the UK, although the Euro/Pound Sterling exchange reduced the overall improvement of revenues from this area to Euro 1.6%.
It is noted that, due to the unfavorable situation, revenues from Italian Directories were affected by the important Turin directories performance whose contraction reduced the increase in revenues for Q1 by about 1.5 percentage points.

The directory assistance area confirmed the important profitability progress made, showing a GOP of Euro 3.2 million compared to a loss of Euro 2.3 million in Q1 2002.

The Internet Area greatly contributed to improving results as it achieved a significant increase in revenues (+76.9% compared to Q1 2002, +20% in comparable terms), and continued to increase its profitability as a consequence of diversification of revenue sources and broadband development.

The positive results achieved by the Seat PG Group in Q1 2003 are due to a constant recovery of efficiency and a significant decrease in operating costs implemented by the management.

Main economic and financial results of the Seat PG Group

Revenues for the quarter reached Euro 345 million, with an increase of 3.6%. Gross operating profit recorded a further significant increase and reached Euro 47.2 million compared to Euro 27.1 million in Q1 2002, up 74.2% with a ratio to revenues of 13.7%, compared to 8.1% in 2002.
Operating income for the period showed an expense balance of Euro 35.3 million compared to Euro 68.9 million in Q1 2002. In absolute terms, loss decreased by Euro 33.6 million.
The Group’s consolidated net result for the period was negative for Euro 35.9 million, significantly improved compared to the loss of Euro 46.9 million in Q1 2002.
During the first quarter, net financial indebtedness further decreased to Euro 664 million compared to Euro 680 million at December 31, 2002.

Lastly, a new organizational model has been completed to comply with Decree Law 231/01. This new model consists of ad hoc internal auditing forms that embody the Code of Ethics, general principles of internal auditing, and the specific principles according to which relations are undertaken with public sector bodies.

Seat PG S.p.A.

At the end of the first quarter, revenues of the Parent Company Seat PG S.p.A. amounted to Euro 175.1 million (+24.3%) and operating result amounted to Euro 3.7 million. This compares to a loss of Euro 17.4 million for Q1 2002.
The net result at 03/31/2003 was negative for Euro 20.5 million but showed a clear improvement compared to the loss of Euro 54.3 million in the same period of 2002.

Performance of the Business Areas

In the first three months of 2003, the performance of the main business areas was as follows:

• In Q1 2003, revenues of the Directories Area amounted to Euro 137 million, with an increase by 1.6% compared to the first quarter of 2002. GOP increased by 6,3% reaching Euro 47,5 million compared to Euro 44.7 million in the same period of 2002, in a period marked by strong seasonality and with the advertising market that showed recession trends also in the first months of 2003. Operating income for the first quarter amounted to Euro 4 million, compared to a loss of Euro 7 million for Q1 2002.
 
• Revenues of the Internet Area amounted to Euro 56.8 million, compared to Euro 32.1 million in Q1 2002. Revenues include the full value of calls to Internet access numbers beginning by 7. In FY 2002, and in previous years, revenues from dial-up telephone traffic included only the rebate recognized by Telecom Italia equivalent to part of the cost of the telephone call. The positive impact on ISP revenues deriving from the application of the full fee amounted to about Euro 18 million in the first quarter. GOP amounted to Euro 9.5 million thus showing a significant increase compared to Euro 600,000 in Q1 2002. At the end of March 2003, active users at 45 days reached 2,380,000, (1,930,000 in Q1 2002) of which 584,000 subscribers to ADSL services. Revenues of the portal business area exceeded Euro 6 million, with an increase of 40% compared to the first quarter of 2002.
 
• Revenues of the Television Area increased by 27.5%, from Euro 16.7 million in the first quarter 2002 to Euro 21.3 million in Q1 2003 also due to the new agreement on the advertising collection on La7 through an external advertising representative. In the first quarter, La7 continued to pursue its cost-cutting objectives, strengthened its publishing image and brand awareness and increased the recognition of its programs.