TELECOM RESEAUX SERVICES (TRS) : Results for the first half of 2006/07

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Paris, 26 January 2007 - Télécom Réseaux Services today announces consolidated results for the first half of its 2006/07 financial year ending 31 March 2007. These results are IFRS-compliant.


(IFRS, millions of euros)
First half
2006/07
 First half
2005/06
Full year
2005/06
Sales
of which Support Services
of which Integration Services


Underlyingoperating profit
Operating profit
Net profit  
17.30
11.00
6.30

(0.01)
(0.01)
(0.10)
18.24
10.98
7.26

0.42
0.47
0.44
36.74
22.03
14.71


0.99
1.01
0.90

     

Near-breakeven at the operating level, slight net loss

TRS came close to breaking even at the operating level in the first half of 2006/07, with an underlying operating loss of ¤0.015m.

Despite further improvement in the average gross margin throughout the first half, the 5.1% decline in sales announced on 16 November prevented the cost-cutting measures put in place in recent years from having their full positive impact.

Interest expenses were stable at ¤0.110m. The net loss was ¤0.105m.

Solid financial position

Taking into account the dividend of ¤0.10 per share with respect to 2005/06, Télécom Réseaux Services had shareholders' equity of ¤9.7m at 30 September 2006. On the same date, gearing (net debt divided by shareholders' equity) was 55%.

The cash position, which is traditionally low in the second quarter, has improved substantially in the third quarter and stands at an acceptable level in early 2007.

Ongoing developments

The roll-out of IP Centrex is progressing in line with the initial schedule. After the platform's successful launch on 28 September, an association managed by Paris city council has been connected since early December. Talks are underway with other prospective customers. 

The Telematic Web® hypervisor, a private, personalised and highly secure web platform, was launched in the spring of 2006 and has been adopted by several customers. It is currently undergoing further development at Calyon.

Outlook

Business levels were firm throughout the first half of the third quarter, but have declined since mid-November. The upcoming French elections may prompt some customers to reduce order levels or postpone certain projects. As a result, it is now clear that full-year sales will not meet the previous year's level, contrary to expectations in mid-November.

However, this cyclical slowdown does not alter the company's bright medium-term outlook.


Télécom Réseaux Services is a leading provider of corporate telecommunications services whose goal and strategy is to provide global telecoms network and workstation solutions at the heart of the enterprise.  www.trservices.fr

Contacts
TELECOM RESAUX SERVICES
Pierre OBERTY, Chairman
Simon J. PENNINGTON, Finance Director
+33 (0)1 64 62 40 00
ACTUS
J.-F. Carminati, Analyst and Investor relations
+ 33 (0)1  44 94 96 30
Amjed Achour, Press relations
+ 33 (0)1 53 67 36 36
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