FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of August, 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
Telecom Argentina S.A.
TABLE OF CONTENTS
| Item | ||
| 1. | Press release, dated August 9, 2007, entitled “Telecom Argentina S.A. Announces Consolidated Six-Month Period (“1H07”) and Second Quarter Results for Fiscal Year 2007 (“2Q07”)” |
FOR IMMEDIATE RELEASE
Market Cap: P$12.9 billion
(August 9, 2007)
Contacts:
Pedro Insussarry
Pablo Caride
Telecom Argentina
(54-11) 4968-3743/3602
TELECOM ARGENTINA S.A. ANNOUNCES CONSOLIDATED SIX-MONTH PERIOD
(“1H07”) and SECOND QUARTER RESULTS FOR FISCAL YEAR 2007
(“2Q07”)*
| • | The Telecom Argentina Group maintained an important expansion of its business in the six-month period ended June, 30, 2007. Consolidated revenues grew 26% vs. 1H06, totaling P$4,202 million. Revenues generated by the Cellular and Internet & Data Transmission increased 40% and 18%, respectively. |
| • | In terms of subscribers, the Cellular customer base reached 11.3 million (+47%), broadband subscribers totaled 602,000 (+100%), while fixed lines in service increased 4% to 4.1 million. |
| • | Operating Profit before Depreciation and Amortization (“OPBDA”) reached P$1,414 million (+26% vs. 1H06), equivalent to 34% of net revenues. Operating Profit increased by 73%, totaling P$727 million. |
| • | Net Income totaled P$387 million, considering the results for discontinued operations (P$ 102 million) generated by the sale of Publicom. |
| • | Net financial Debt (before NPV effect) declined to P$ 2,785 million (-P$1.224 million vs. 1H06), primarily as a result of the cash flow generated by operations. The ratio of Net Financial Debt to OPBDA declined from 1.8x as of June 2006, to 1.0x. |
| As of June-30 |
 |
% |
||||||||
| 2007 | 2006 | |||||||||
| Consolidated Net Revenues (in MM P$) |
4,202 | 3,348 | 854 | 26 | % | |||||
| Voice, data & Internet |
1,589 | 1,485 | 104 | 7 | % | |||||
| Cellular |
2,613 | 1,863 | 750 | 40 | % | |||||
| Operating Profit before D&A (in MM P $) |
1,414 | 1,121 | 293 | 26 | % | |||||
| Operating Profit (in MM P$) |
727 | 421 | 306 | 73 | % | |||||
| Net Income (in MM P$) |
387 | 99 | 288 | 291 | % | |||||
| Shareholder’s equity (in MM P$) |
2,511 | 1,971 | 540 | 27 | % | |||||
| Net Financial Debt—Before NPV effect (in MM P$) |
2,785 | 4,009 | (1,224 | ) | -31 | % | ||||
| Net Financial Debt—Book value (in MM P $) |
2,671 | 3,795 | (1,124 | ) | -30 | % | ||||
| CAPEX (in MM P$) |
553 | 465 | 88 | 19 | % | |||||
| Lines in service (Fixed lines -in thousands) |
4,138 | 3,997 | 141 | 4 | % | |||||
| Cellular customers (in thousands) |
11,286 | 7,665 | 3,621 | 47 | % | |||||
| Personal (Argentina) |
9,881 | 6,874 | 3,007 | 44 | % | |||||
| Núcleo (Paraguay) |
1,405 | 791 | 614 | 78 | % | |||||
| ADSL customers (in thousands) |
602 | 300 | 301 | 100 | % | |||||
| Fixed line traffic (in MM minutes, Internet Traffic not included) |
8,203 | 8,154 | 48 | 1 | % | |||||
| Incoming/Outgoing cellular voice traffic in Arg.(in MM minutes) |
4,589 | 3,412 | 1,177 | 34 | % | |||||
| Average Revenue per user (ARPU ) Fixed Telephony/voice (in P$) |
38 | 39 | (0 | ) | 0 | % | ||||
| Average Revenue per user (ARPU ) Cellular Telephony Arg. (in P$) |
37 | 37 | 0 | 1 | % | |||||
| * | Non-financial data unaudited |
| 1 | www.telecom.com.ar |
Buenos Aires, August 9, 2007 – Telecom Argentina (BASE: TECO2, NYSE: TEO), one of Argentina’s leading telecommunications groups, announced today a Net Income of P$387 million for the six- month period ended June 30, 2007.
| 1H 07 | 1H 06 |
|
|
||||||||
| Net Revenues (MMP $) |
4,202 | 3,348 | 854 | 26 | % | ||||||
| Net Income (MMP$) |
387 | 99 | 288 | ||||||||
| Earnings per Share ($) |
0.39 | 0.10 | 0.29 | ||||||||
| Earnings per ADR ($) |
1.97 | 0.50 | 1.46 | ||||||||
| OPBDA * |
34 | % | 33 | % | |||||||
| Operating Profit * |
17 | % | 13 | % | |||||||
| Net Income * |
9 | % | 3 | % | |||||||
| * | As a percentage of Revenues |
During 1H07, Consolidated Net Revenues increased 26% (+P$854 million vs. 1H06) to P$4,202 million, mainly fueled by the cellular and broadband businesses.
Moreover, OPBDA increased by 26% (+P$293 million) to P$1,414 million, equal to 34% of Consolidated Net Revenues.
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$1,589 million, +7% vs. 1H06.
Voice
Total Revenues for this segment reached P$1,258 million (+4%).
Monthly Charges and Supplementary Services increased by P$12 million or 3%, to P$366 million. Lines in service increased 4%, similar to the results reported in recent quarters.
Revenues generated by traffic (Local Measured Service, Domestic Long Distance and International Telephony) totaled P$598 million, with increases of 1%, 4% and 8%, respectively.
Interconnection revenues amounted to P$174 million (+19%), due to the expansion of both fixed-line and wireless traffic.
Other
Other revenues reached P$120 million.
Internet and Data Transmission
The increase in broadband continues to have an outstanding performance. Internet continues to be the main driver of growth, with revenues of P$250 million (+22% vs. 1H06).
| 2 | www.telecom.com.ar |
Moreover, Telecom’s ADSL subscribers reached 602,000 (+300,000 or +100% vs. 1H06). Therefore, lines with ADSL connection accounted for approximately 14% of Telecom’s lines in service.
This development confirms Telecom’s fixed-line customer’s preference for the Company’s broadband services. This growth is the result of the strategy of the Company to make available to its clients of all the country products that combine the best quality of navigation at accessible prices, according with different segments. In this sense, to products already available (from 640 K to 5 MG), the Company added an option of broadband connection with no fixed monthly fee during the last quarter.
Revenues generated by Data transmission amounted to P$81 million, (+8% or P$6 million vs. 1H06). The Company continues to work actively in the corporative segment, in particular with clients of the public sector making available the best technology to accompany government initiatives in matters related to security, emergencies and management.
Cellular Telephony
The Cellular Telephony business generated revenues of P$2,613 million in 1H07.
Telecom Personal in Argentina
As of June 30, 2007, Personal’s subscribers reached 9.9 million (+3.0 million or +44% vs. 1H06). Approximately 68% of the overall subscriber base was prepaid and 32% was postpaid. Subscribers with GSM technology represented 92% of the total subscriber base at the semester.
Total voice traffic increased by 34% vs. 1H06 while outgoing SMS traffic increased from an average of 460 million messages per month to an average of 784 million (+70%). Moreover, the average monthly Revenue per User (“ARPU”) reached P$ 37, stable when compared to 1H06.
Revenues totaled P$2,436 million (+P$720 million or +42% vs. 1H06). Service revenues increased by 46%, while handset sales grew 17% in the period.
During 1H07, Personal continued to work on further consolidating in leadership in Argentine market, in terms of technology and innovation. It is important to highlight the launch of Third Generation services by Personal, such video-call, mobile broadband and numerous exclusive multimedia content features, Personal interactive web portal, photoblog, gaming, MP3 Full Track Download, Personal Mobile Video, etc. Therefore, Personal becomes the first 3G operator in Argentina and the first cellular provider in
| 3 | www.telecom.com.ar |
Latin America to offer 3G connections both for notebooks and voice , plus videocall and multimedia through 3G handsets.
Núcleo
Personal’s controlled subsidiary that operates in Paraguay, generated revenues equivalent to P$177 million (+20% vs. 1H06).
By the end of the quarter, the subscriber base reached approximately 1.4 million, +78% vs. 1H06. Prepaid and Postpaid customers represented 89% and 11%, respectively, while GSM subscribers represented 82% of the overall subscriber base.
Consolidated Operating Costs
The Cost of Services Provided, Administrative Expenses and Selling Expenses totaled P$3,475 million in 1H07, which represents an increase of P$548 million or +19% vs. 1H06 with the following breakdown:
| • | Salaries and Social Security Contributions: P$463 million (+17%), affected by wage adjustments and headcount increases related to the expansion of the business. |
| • | Taxes: P$321 million (+36%), mainly generated by direct taxes on sales. |
| • | Agents and Prepaid Card Commissions: $340 million, (+42%), related to the expansion in terms of subscribers and traffic. |
| • | Advertising: P$128 million (+47%), related to brand positioning campaigns and the launch of new services. |
| • | Cost of cellular handsets: increased to P$404 million (+4%) as a consequence increase in handset sales related to the subscriber growth and handset upgrades. |
| • | TLRD and Roaming by P$347 million (+42%) due to increased traffic among cellular operators. |
| • | Depreciation of Fixed and Intangible Assets: P$687 million (-2% vs. 1H06). Telecom Argentina totaled P$418 millones and Telecom Personal $268 millones ( -13% y +22%) respectively. |
Consolidated Financial and Holding Results
Financial and Holding Results resulted in a loss of P$218 million, as compared to the P$297 million loss registered in 1H06. The difference is mainly due to lower net interest expenses by P$72 million ( mainly due to the reduction in net financial debt) and also lower net foreign currency exchange losses by P$33 million.
Net Financial Debt
As of June 30, 2007, Net Debt (Loans before the effect of NPV valuation, minus Cash, Banks, Current Investments and Other credits derived from derivative Investments)
| 4 | www.telecom.com.ar |
amounted to P$2,785 million, a reduction of P$1.224 million as compared to June 2006. Interest accrued on financial debt totaled P$157 million.
During April and May Telecom Argentina performed prepayments on its outstanding Series A & B Notes equivalent to the remaining 25% of the mandatory amortization scheduled for October 15, 2009 and 74% of the mandatory amortization scheduled for April 15, 2010. The prepayments totaled approximately the equivalent of US$ 140 million.
In addition, Telecom Personal canceled bank loans and notes for approximately the equivalent of US$ 60 million in the second quarter.
Consolidated Capital Expenditures
A total amount of P$553 million invested in fixed and intangibles assets was allocated to the cellular business (P$253 million) and the Voice, Data and Internet business (P$300 million).
The Telecom Group continues to implement its Capex plan including the expansion of its ADSL services (accesses and transmission), reconverting its network in order to fully develop a new generation of services, enhancing its cellular network (capacity, coverage and 3G services), and integrating platforms.
Recent Developments
During 2Q07, Telecom registered a result for discontinued operations of P$ 102 million related to the sale of Publicom SA, the company engaged in the directories business.
During July, Telecom reached an agreement with the different unions representing workers under Collective Bargaining Agreements. The agreement includes a wage increase of approximately 16% and a half-hour reduction in the work day, applicable starting September, 2007. The agreement covers the period from April 2007 through and including July 2008.
***********
| 5 | www.telecom.com.ar |
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 other 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 June 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 |
Astrid Burger 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)
*******
Carlos Felices
Chairman
*******
| 6 | www.telecom.com.ar |
TELECOM ARGENTINA S.A.
Consolidated information
SIX MONTH PERIOD AND SECOND QUARTER—FISCAL YEAR 2007
(In millions of Argentine pesos, except statistical data)
1- Consolidated Balance Sheet
|
$ |
% |
|||||||||
| Jun-30 2007 |
Dec-31 2006 |
|||||||||
| Cash, equivalents and investments |
808 | 661 | 147 | 22 | % | |||||
| Trade receivables |
795 | 743 | 52 | 7 | % | |||||
| Other current assets |
415 | 363 | 52 | 14 | % | |||||
| TOTAL CURRENT ASSETS |
2,018 | 1,767 | 251 | 14 | % | |||||
| Fixed & Intangible assets |
6,332 | 6,520 | (188 | ) | -3 | % | ||||
| Other non-current assets |
411 | 433 | (22 | ) | -5 | % | ||||
| TOTAL NON-CURRENT ASSETS |
6,743 | 6,953 | (210 | ) | -3 | % | ||||
| TOTAL ASSETS |
8,761 | 8,720 | 41 | 0 | % | |||||
| Accounts payable |
1,440 | 1,481 | (41 | ) | -3 | % | ||||
| Loans |
1,301 | 1,395 | (94 | ) | -7 | % | ||||
| Reserves |
73 | 85 | (12 | ) | -14 | % | ||||
| Other current liabilities |
401 | 412 | (11 | ) | -3 | % | ||||
| TOTAL CURRENT LIABILITIES |
3,215 | 3,373 | (158 | ) | -5 | % | ||||
| Loans |
2,295 | 2,703 | (408 | ) | -15 | % | ||||
| Reserves |
252 | 234 | 18 | 8 | % | |||||
| Other non-current liabilities |
434 | 209 | 225 | 108 | % | |||||
| TOTAL NON-CURRENT LIABILITIES |
2,981 | 3,146 | (165 | ) | -5 | % | ||||
| TOTAL LIABILITIES |
6,196 | 6,519 | (323 | ) | -5 | % | ||||
| Minority Interest |
54 | 72 | (18 | ) | -25 | % | ||||
| Shareholders’ equity |
2,511 | 2,129 | 382 | 18 | % | |||||
| TOTAL LIABILITIES AND EQUITY |
8,761 | 8,720 | 41 | 0 | % | |||||
2- Consolidated Loans
| Jun-30 2007 |
Dec-31 2006 |
$ |
% |
|||||||||
| Corporate Bonds |
1,034 | 1,014 | 20 | 2 | % | |||||||
| Banks and others |
220 | 334 | (114 | ) | -34 | % | ||||||
| Accrued interest |
36 | 42 | (6 | ) | -14 | % | ||||||
| Derivaties |
11 | 5 | 6 | 120 | % | |||||||
| TOTAL CURRENT LOANS |
1,301 | 1,395 | (94 | ) | -7 | % | ||||||
| Corporate Bonds |
2,392 | 2,798 | (406 | ) | -15 | % | ||||||
| Banks and others |
10 | 51 | (41 | ) | -80 | % | ||||||
| Net Present Value |
(114 | ) | (146 | ) | 32 | -22 | % | |||||
| TOTAL NON-CURRENT LOANS |
2,295 | 2,703 | (408 | ) | -15 | % | ||||||
| TOTAL LOANS |
3,596 | 4,098 | (502 | ) | -12 | % | ||||||
| Derivatives valuation effect (Other Credits) |
117 | 85 | 32 | 38 | % | |||||||
| Cash, equivalents and investments |
808 | 661 | 147 | 22 | % | |||||||
| Net Financial Debt (without NPV effect) |
2,785 | 3,498 | (713 | ) | -20 | % | ||||||
| Jun-30 |
$ |
% |
||||||||||
| 2007 | 2006 | |||||||||||
| Financial and Holding results |
||||||||||||
| Financial results generated by assets |
||||||||||||
| Interest on short term investments |
45 | 35 | 10 | 29 | % | |||||||
| Foreign currency exchange gains |
7 | 8 | (1 | ) | -13 | % | ||||||
| Other financial results |
(23 | ) | 3 | -26 | ||||||||
| Total Financial results generated by assets |
29 | 46 | (17 | ) | -37 | % | ||||||
| Financial results generated by liabilities |
||||||||||||
| Interest on debt |
(157 | ) | (187 | ) | 30 | -16 | % | |||||
| Others |
(26 | ) | (58 | ) | 32 | -55 | % | |||||
| Foreign currency exchange losses |
(64 | ) | (98 | ) | 34 | -35 | % | |||||
| Total Financial results generated by liabilities |
(247 | ) | (343 | ) | 96 | -28 | % | |||||
| Total Financial and Holding results |
(218 | ) | (297 | ) | 79 | -27 | % | |||||
| 7 | www.telecom.com.ar |
3- Consolidated Income Statement Six-Month Comparison
| Jun-30 |
$ |
% |
||||||||||
| 2007 | 2006 | |||||||||||
| Net revenues |
4,202 | 3,348 | 854 | 26 | % | |||||||
| Cost of services provided |
(2,324 | ) | (2,029 | ) | (295 | ) | 15 | % | ||||
| GROSS PROFIT |
1,878 | 1,319 | 559 | 42 | % | |||||||
| Administrative expenses |
(162 | ) | (128 | ) | (34 | ) | 27 | % | ||||
| Selling expenses |
(989 | ) | (770 | ) | (219 | ) | 28 | % | ||||
| OPERATING PROFIT |
727 | 421 | 306 | 73 | % | |||||||
| Equity income from related companies |
— | 6 | (6 | ) | -100 | % | ||||||
| Financial and holding results |
(218 | ) | (297 | ) | 79 | -27 | % | |||||
| Other expenses, net |
(58 | ) | (86 | ) | 28 | -33 | % | |||||
| Debt Restructuring Results |
— | — | — | — | ||||||||
| RESULTS FROM ORDINARY OPERATIONS |
451 | 44 | 407 | 925 | % | |||||||
| Taxes on income |
(158 | ) | 65 | (223 | ) | -343 | % | |||||
| Minority interest |
(8 | ) | (10 | ) | 2 | -20 | % | |||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
285 | 99 | 186 | |||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
102 | — | 102 | — | ||||||||
| NET INCOME |
387 | 99 | 288 | |||||||||
| Operating (Loss)/ Profit before D & A |
1,414 | 1,121 | 293 | 26 | % | |||||||
| As a % of Net Revenues |
34 | % | 33 | % | ||||||||
4- Consolidated Income Statement Three-Months Comparison
| Jun-30 |
$ |
% |
||||||||||
| 2007 | 2006 | |||||||||||
| Net revenues |
2,147 | 1,737 | 410 | 24 | % | |||||||
| Cost of services provided |
(1,187 | ) | (1,043 | ) | (144 | ) | 14 | % | ||||
| GROSS PROFIT |
960 | 694 | 266 | 38 | % | |||||||
| Administrative expenses |
(85 | ) | (65 | ) | (20 | ) | 31 | % | ||||
| Selling expenses |
(506 | ) | (405 | ) | (101 | ) | 25 | % | ||||
| OPERATING PROFIT |
369 | 224 | 145 | 65 | % | |||||||
| Equity income from related companies |
— | — | — | — | ||||||||
| Financial and holding results |
(86 | ) | (114 | ) | 28 | -25 | % | |||||
| Other expenses, net |
(26 | ) | (44 | ) | 18 | -41 | % | |||||
| Debt Restructuring Results |
— | — | — | — | ||||||||
| RESULTS FROM ORDINARY OPERATIONS |
257 | 66 | 191 | 289 | % | |||||||
| Taxes on income |
(106 | ) | 34 | (140 | ) | -412 | % | |||||
| Minority interest |
(3 | ) | (5 | ) | 2 | -40 | % | |||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
148 | 95 | 53 | |||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
104 | 1 | 103 | |||||||||
| NET (LOSS)/INCOME |
252 | 96 | 156 | 163 | % | |||||||
| Operating (Loss)/ Profit before D & A |
726 | 575 | 151 | 26 | % | |||||||
| As a % of Net Revenues |
34 | % | 33 | % | ||||||||
| 8 | www.telecom.com.ar |
5- Consolidated Revenues Breakdown Six-Month Comparison
| Jun-30 |
$ |
% |
||||||||
| 2007 | 2006 | |||||||||
| Fixed Telephony |
1,130 | 1,087 | 43 | 4 | % | |||||
| Measured service |
||||||||||
| Local |
227 | 224 | 3 | 1 | % | |||||
| DLD |
243 | 233 | 10 | 4 | % | |||||
| Monthly charges |
366 | 354 | 12 | 3 | % | |||||
| Public telephones |
61 | 69 | (8 | ) | -12 | % | ||||
| Interconnection |
174 | 146 | 28 | 19 | % | |||||
| Others |
59 | 61 | (2 | ) | -3 | % | ||||
| International Telephony |
128 | 118 | 10 | 8 | % | |||||
| Data transmission & Internet |
331 | 280 | 51 | 18 | % | |||||
| Cellular Telephony |
2,613 | 1,863 | 750 | 40 | % | |||||
| Telecom Personal |
2,436 | 1,716 | 720 | 42 | % | |||||
| Monthly fee and measured service |
567 | 404 | 163 | 40 | % | |||||
| Pre-paid card |
849 | 516 | 333 | 65 | % | |||||
| Calling Party Pays |
265 | 230 | 35 | 15 | % | |||||
| TLRD * |
267 | 188 | 79 | 42 | % | |||||
| Handset sales |
267 | 228 | 39 | 17 | % | |||||
| Others |
221 | 150 | 71 | 47 | % | |||||
| Núcleo |
177 | 147 | 30 | 20 | % | |||||
| Monthly fee and measured service |
30 | 29 | 1 | 3 | % | |||||
| Pre-paid card |
95 | 70 | 25 | 36 | % | |||||
| Calling Party Pays |
19 | 18 | 1 | 6 | % | |||||
| TLRD * |
22 | 18 | 4 | 22 | % | |||||
| Handset sales |
3 | 4 | (1 | ) | -25 | % | ||||
| Others |
8 | 8 | — | 0 | % | |||||
| TOTAL NET REVENUES |
4,202 | 3,348 | 854 | 26 | % | |||||
| * | Charges for the termination of calls of the cellular operators. |
6- Consolidated Revenues Breakdown Three-Months Comparison
| Jun-30 |
$ |
% |
||||||||
| 2007 | 2006 | |||||||||
| Fixed Telephony |
576 | 550 | 26 | 5 | % | |||||
| Measured service |
||||||||||
| Local |
117 | 105 | 12 | 11 | % | |||||
| DLD |
122 | 126 | (4 | ) | -3 | % | ||||
| Monthly charges |
184 | 178 | 6 | 3 | % | |||||
| Public telephones |
30 | 33 | (3 | ) | -9 | % | ||||
| Interconnection |
90 | 77 | 13 | 17 | % | |||||
| Others |
33 | 31 | 2 | 6 | % | |||||
| International Telephony |
63 | 58 | 5 | 9 | % | |||||
| Data transmission & Internet |
167 | 145 | 22 | 15 | % | |||||
| Cellular Telephony |
1,341 | 984 | 357 | 36 | % | |||||
| Telecom Personal |
1,256 | 905 | 351 | 39 | % | |||||
| Monthly fee and measured service |
302 | 211 | 91 | 43 | % | |||||
| Pre-paid card |
431 | 286 | 145 | 51 | % | |||||
| Calling Party Pays |
137 | 116 | 21 | 18 | % | |||||
| TLRD * |
140 | 98 | 42 | 43 | % | |||||
| Handset sales |
143 | 129 | 14 | 11 | % | |||||
| Others |
103 | 65 | 38 | 58 | % | |||||
| Núcleo |
85 | 79 | 6 | 8 | % | |||||
| Monthly fee and measured service |
15 | 16 | (1 | ) | -6 | % | ||||
| Pre-paid card |
46 | 38 | 8 | 21 | % | |||||
| Calling Party Pays |
9 | 8 | 1 | 13 | % | |||||
| TLRD * |
10 | 11 | (1 | ) | -9 | % | ||||
| Handset sales |
1 | 3 | (2 | ) | -67 | % | ||||
| Others |
4 | 3 | 1 | 33 | % | |||||
| TOTAL NET REVENUES |
2,147 | 1,737 | 410 | 24 | % | |||||
| * | Charges for the termination of calls of the cellular operators. |
| 9 | www.telecom.com.ar |
7- Consolidated Income Statement by segments Six Month Period - Fiscal Year 2007 (In million of Argentine pesos)
| Segments | Variation vs 6M 06 |
||||||||||||||
| Voice, Data and Internet |
Cellular Telephony |
Consolidated |
$ |
% |
|||||||||||
| NET REVENUES |
1,589 | 2,613 | 4,202 | 854 | 26 | % | |||||||||
| Salaries and social security contributions |
(364 | ) | (99 | ) | (463 | ) | (67 | ) | 17 | % | |||||
| Taxes |
(96 | ) | (225 | ) | (321 | ) | (85 | ) | 36 | % | |||||
| Materials and supplies |
(144 | ) | (54 | ) | (198 | ) | (45 | ) | 29 | % | |||||
| Doubtful accounts |
(9 | ) | (29 | ) | (38 | ) | (1 | ) | 3 | % | |||||
| Interconnection cost |
(76 | ) | — | (76 | ) | 1 | -1 | % | |||||||
| Settlement charges |
(61 | ) | — | (61 | ) | (8 | ) | 15 | % | ||||||
| Lease of lines and circuits |
(26 | ) | (26 | ) | (52 | ) | (25 | ) | 93 | % | |||||
| Service fees |
(60 | ) | (67 | ) | (127 | ) | (27 | ) | 27 | % | |||||
| Advertising |
(35 | ) | (93 | ) | (128 | ) | (41 | ) | 47 | % | |||||
| Agent and Prepaid card commissions |
(12 | ) | (328 | ) | (340 | ) | (101 | ) | 42 | % | |||||
| Cost of cellular handsets |
— | (404 | ) | (404 | ) | (14 | ) | 4 | % | ||||||
| Roaming and TLRD |
— | (347 | ) | (347 | ) | (102 | ) | 42 | % | ||||||
| Others |
(102 | ) | (131 | ) | (233 | ) | (46 | ) | 25 | % | |||||
| Operating Profit before D & A |
604 | 810 | 1,414 | 293 | 26 | % | |||||||||
| Operating Profit before D & A Margin |
38 | % | 31 | % | 34 | % | — | 0 | % | ||||||
| Depreciation of fixed assets |
(413 | ) | (252 | ) | (665 | ) | 10 | -1 | % | ||||||
| Amortization of intangible assets |
(6 | ) | (16 | ) | (22 | ) | 3 | -12 | % | ||||||
| OPERATING RESULTS |
185 | 542 | 727 | 306 | 73 | % | |||||||||
| EQUITY INCOME FROM RELATED COMPANIES |
— | — | — | (6 | ) | 0 | % | ||||||||
| FINANCIAL AND HOLDING INCOME |
(124 | ) | (94 | ) | (218 | ) | 79 | -27 | % | ||||||
| OTHER EXPENSES, NET |
(45 | ) | (13 | ) | (58 | ) | 28 | -33 | % | ||||||
| INCOME FROM ORDINARY OPERATIONS |
16 | 435 | 451 | 407 | 0 | % | |||||||||
| Taxes on income |
(63 | ) | (95 | ) | (158 | ) | (223 | ) | 0 | % | |||||
| Minority interest |
— | (8 | ) | (8 | ) | (107 | ) | 0 | % | ||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
(47 | ) | 332 | 285 | 285 | 0 | % | ||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
102 | — | 102 | 3 | 0 | % | |||||||||
| NET INCOME |
55 | 332 | 387 | 387 | — | ||||||||||
| Consolidated Income Statement by segments Six Month Period - Fiscal Year 2006 (In million of Argentine pesos) |
| ||||||||||||||
| Segments | |||||||||||||||
| Voice, Data and Internet |
Cellular Telephony |
Consolidated | |||||||||||||
| NET REVENUES |
1,485 | 1,863 | 3,348 | ||||||||||||
| Salaries and social security contributions |
(324 | ) | (72 | ) | (396 | ) | |||||||||
| Taxes |
(83 | ) | (153 | ) | (236 | ) | |||||||||
| Materials and supplies |
(120 | ) | (33 | ) | (153 | ) | |||||||||
| Doubtful accounts |
(9 | ) | (28 | ) | (37 | ) | |||||||||
| Interconnection cost |
(77 | ) | — | (77 | ) | ||||||||||
| Settlement charges |
(53 | ) | — | (53 | ) | ||||||||||
| Lease of lines and circuits |
(15 | ) | (12 | ) | (27 | ) | |||||||||
| Service fees |
(42 | ) | (58 | ) | (100 | ) | |||||||||
| Advertising |
(18 | ) | (69 | ) | (87 | ) | |||||||||
| Agent and Prepaid card commissions |
(9 | ) | (230 | ) | (239 | ) | |||||||||
| Cost of cellular handsets |
— | (390 | ) | (390 | ) | ||||||||||
| Roaming and TLRD |
— | (245 | ) | (245 | ) | ||||||||||
| Others |
(89 | ) | (98 | ) | (187 | ) | |||||||||
| Operating Profit before D & A |
646 | 475 | 1,121 | ||||||||||||
| Operating Profit before D & A Margin |
44 | % | 25 | % | 33 | % | |||||||||
| Depreciation of fixed assets |
(474 | ) | (201 | ) | (675 | ) | |||||||||
| Amortization of intangible assets |
(6 | ) | (19 | ) | (25 | ) | |||||||||
| OPERATING RESULTS |
166 | 255 | 421 | ||||||||||||
| EQUITY INCOME FROM RELATED COMPANIES |
— | 6 | 6 | ||||||||||||
| FINANCIAL AND HOLDING INCOME |
(225 | ) | (72 | ) | (297 | ) | |||||||||
| OTHER EXPENSES, NET |
(52 | ) | (34 | ) | (86 | ) | |||||||||
| INCOME FROM ORDINARY OPERATIONS |
(111 | ) | 155 | 44 | |||||||||||
| Taxes on income |
58 | 7 | 65 | ||||||||||||
| Minority interest |
— | (10 | ) | (10 | ) | ||||||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
(53 | ) | 152 | 99 | |||||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
— | — | — | ||||||||||||
| NET INCOME |
(53 | ) | 152 | 99 | |||||||||||
| 10 | www.telecom.com.ar |
8- Consolidated Income Statement by segments Three month period - FY 2007 (In million of Arentine pesos)
| Segments | Variation vs 2Q 06 |
||||||||||||||
| Voice, Data and Internet |
Cellular Telephony |
Consolidated |
$ |
% |
|||||||||||
| NET REVENUES |
806 | 1,341 | 2,147 | 854 | 49 | % | |||||||||
| Salaries and social security contributions |
(197 | ) | (52 | ) | (249 | ) | (67 | ) | 32 | % | |||||
| Taxes |
(48 | ) | (112 | ) | (160 | ) | (85 | ) | 70 | % | |||||
| Materials and supplies |
(73 | ) | (25 | ) | (98 | ) | (45 | ) | 54 | % | |||||
| Doubtful accounts |
(4 | ) | (15 | ) | (19 | ) | (1 | ) | 5 | % | |||||
| Interconnection cost |
(45 | ) | — | (45 | ) | 1 | -3 | % | |||||||
| Settlement charges |
(24 | ) | — | (24 | ) | (8 | ) | 31 | % | ||||||
| Lease of lines and circuits |
(17 | ) | (14 | ) | (31 | ) | (25 | ) | 192 | % | |||||
| Service fees |
(34 | ) | (35 | ) | (69 | ) | (27 | ) | 52 | % | |||||
| Advertising |
(24 | ) | (43 | ) | (67 | ) | (41 | ) | 80 | % | |||||
| Agent and Prepaid card commissions |
(6 | ) | (157 | ) | (163 | ) | (101 | ) | 82 | % | |||||
| Cost of cellular handsets |
— | (207 | ) | (207 | ) | (14 | ) | 7 | % | ||||||
| Roaming and TLRD |
— | (171 | ) | (171 | ) | (102 | ) | 88 | % | ||||||
| Others |
(50 | ) | (68 | ) | (118 | ) | (46 | ) | 46 | % | |||||
| Operating Profit before D & A |
284 | 442 | 726 | 293 | 51 | % | |||||||||
| Operating Profit before D & A Margin |
35 | % | 33 | % | 34 | % | |||||||||
| Depreciation of fixed assets |
(206 | ) | (141 | ) | (347 | ) | 10 | -3 | % | ||||||
| Amortization of intangible assets |
(3 | ) | (7 | ) | (10 | ) | 3 | -21 | % | ||||||
| OPERATING RESULTS |
75 | 294 | 369 | 306 | 137 | % | |||||||||
| EQUITY INCOME FROM RELATED COMPANIES |
— | — | — | (6 | ) | 0 | % | ||||||||
| FINANCIAL AND HOLDING INCOME |
(36 | ) | (50 | ) | (86 | ) | 79 | -69 | % | ||||||
| OTHER EXPENSES, NET |
(21 | ) | (5 | ) | (27 | ) | 28 | -64 | % | ||||||
| INCOME FROM ORDINARY OPERATIONS |
18 | 239 | 257 | 407 | -925 | % | |||||||||
| Taxes on income |
(40 | ) | (66 | ) | (106 | ) | (223 | ) | -338 | % | |||||
| Minority interest |
— | (3 | ) | (3 | ) | (107 | ) | -315 | % | ||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
(22 | ) | 170 | 148 | 285 | ||||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
104 | — | 104 | 3 | |||||||||||
| NET INCOME |
82 | 170 | 252 | 387 | — | ||||||||||
| 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 |
753 | 984 | 1,737 | ||||||||||||
| Salaries and social security contributions |
(168 | ) | (39 | ) | (207 | ) | |||||||||
| Taxes |
(41 | ) | (80 | ) | (121 | ) | |||||||||
| Materials and supplies |
(65 | ) | (18 | ) | (83 | ) | |||||||||
| Doubtful accounts |
(4 | ) | (15 | ) | (19 | ) | |||||||||
| Interconnection cost |
(40 | ) | — | (40 | ) | ||||||||||
| Settlement charges |
(26 | ) | — | (26 | ) | ||||||||||
| Lease of lines and circuits |
(7 | ) | (6 | ) | (13 | ) | |||||||||
| Service fees |
(22 | ) | (30 | ) | (52 | ) | |||||||||
| Advertising |
(10 | ) | (41 | ) | (51 | ) | |||||||||
| Agent and Prepaid card commissions |
(5 | ) | (118 | ) | (123 | ) | |||||||||
| Cost of cellular handsets |
— | (211 | ) | (211 | ) | ||||||||||
| Roaming and TLRD |
— | (116 | ) | (116 | ) | ||||||||||
| Others |
(46 | ) | (54 | ) | (100 | ) | |||||||||
| Operating Profit before D & A |
319 | 256 | 575 | ||||||||||||
| Operating Profit before D & A Margin |
42 | % | 26 | % | 33 | % | |||||||||
| Depreciation of fixed assets |
(234 | ) | (103 | ) | (337 | ) | |||||||||
| Amortization of intangible assets |
(4 | ) | (10 | ) | (14 | ) | |||||||||
| OPERATING RESULTS |
81 | 143 | 224 | ||||||||||||
| EQUITY INCOME FROM RELATED COMPANIES |
— | — | — | ||||||||||||
| FINANCIAL AND HOLDING INCOME |
(84 | ) | (30 | ) | (114 | ) | |||||||||
| OTHER EXPENSES, NET |
(27 | ) | (17 | ) | (44 | ) | |||||||||
| INCOME FROM ORDINARY OPERATIONS |
(30 | ) | 96 | 66 | |||||||||||
| Taxes on income |
38 | (4 | ) | 34 | |||||||||||
| Minority interest |
— | (5 | ) | (5 | ) | ||||||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
8 | 87 | 95 | ||||||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
1 | — | 1 | ||||||||||||
| NET INCOME |
9 | 87 | 96 | ||||||||||||
| 11 | www.telecom.com.ar |
TELECOM ARGENTINA S.A.
Unconsolidated Information
SIX MONTH PERIOD AND SECOND QUARTER—FISCAL YEAR 2007
(In millions of Argentine pesos)
9- Balance Sheet
| Jun-30 2007 |
Dec-31 2006 |
$ |
% |
|||||||
| Cash, equivalents and investments |
691 | 484 | 207 | 43 | % | |||||
| Trade receivables |
460 | 379 | 81 | 21 | % | |||||
| Other current assets |
79 | 56 | 23 | 41 | % | |||||
| TOTAL CURRENT ASSETS |
1,230 | 919 | 311 | 34 | % | |||||
| Other Trade receivables |
317 | 284 | 33 | 12 | % | |||||
| Fixed & Intangible assets |
4,029 | 4,191 | (162 | ) | -4 | % | ||||
| Investments |
955 | 872 | 83 | 10 | % | |||||
| Other non-current assets |
10 | 10 | — | 0 | % | |||||
| TOTAL NON-CURRENT ASSETS |
5,311 | 5,357 | (46 | ) | -1 | % | ||||
| TOTAL ASSETS |
6,541 | 6,276 | 265 | 4 | % | |||||
| Accounts payable |
594 | 543 | 51 | 9 | % | |||||
| Loans |
1,036 | 1,015 | 21 | 2 | % | |||||
| Reserves |
66 | 78 | (12 | ) | -15 | % | ||||
| Other current liabilities |
206 | 190 | 16 | 8 | % | |||||
| TOTAL CURRENT LIABILITIES |
1,902 | 1,826 | 76 | 4 | % | |||||
| Loans |
1,525 | 1,879 | (354 | ) | -19 | % | ||||
| Compensation and social benefits payable |
36 | 32 | 4 | 13 | % | |||||
| Others liabilities |
99 | 161 | (62 | ) | -39 | % | ||||
| Reserves |
468 | 249 | 219 | 88 | % | |||||
| TOTAL NON-CURRENT LIABILITIES |
2,128 | 2,321 | (193 | ) | -8 | % | ||||
| TOTAL LIABILITIES |
4,030 | 4,147 | (117 | ) | -3 | % | ||||
| Shareholders’ equity |
2,511 | 2,129 | 382 | 18 | % | |||||
| TOTAL LIABILITIES AND EQUITY |
6,541 | 6,276 | 265 | 4 | % | |||||
10- Income Statement Six-Month Comparison
| 30-Jun |
$ |
% |
||||||||||
| 2007 | 2006 | |||||||||||
| Net revenues |
1,810 | 1,641 | 169 | 10 | % | |||||||
| Cost of services provided |
(976 | ) | (955 | ) | (21 | ) | -2 | % | ||||
| GROSS PROFIT |
834 | 686 | 148 | 22 | % | |||||||
| Administrative expenses |
(97 | ) | (79 | ) | (18 | ) | -23 | % | ||||
| Selling expenses |
(332 | ) | (290 | ) | (42 | ) | -14 | % | ||||
| OPERATING PROFIT |
405 | 317 | 88 | 28 | % | |||||||
| Equity income from related companies |
113 | (6 | ) | 119 | 0 | % | ||||||
| Financial & holding results |
(124 | ) | (225 | ) | 101 | 45 | % | |||||
| Other incomes & expenses net |
(44 | ) | (43 | ) | (1 | ) | -2 | % | ||||
| RESULTS FROM ORDINARY OPERATIONS |
350 | 43 | 307 | 0 | % | |||||||
| Taxes on income |
(63 | ) | 58 | (121 | ) | -209 | % | |||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
287 | 101 | 186 | 0 | % | |||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
100 | (2 | ) | — | 0 | % | ||||||
| NET INCOME |
387 | 99 | 186 | 0 | % | |||||||
| Operating (Loss)/ Profit before D & A |
823 | 797 | 26 | 3 | % | |||||||
| As a % of Net Revenues |
45 | % | 49 | % | ||||||||
11- Income Statement Three-Months Comparison
| 30-Jun |
$ |
% |
||||||||||||
| 2007 | 2006 | |||||||||||||
| Net revenues |
920 | 832 | 88 | 0 | ||||||||||
| Cost of services provided |
(499 | ) | (486 | ) | (13 | ) | -3 | % | ||||||
| GROSS PROFIT |
421 | 346 | 75 | 22 | % | |||||||||
| Administrative expenses |
(54 | ) | (39 | ) | (15 | ) | -38 | % | ||||||
| Selling expenses |
(177 | ) | (150 | ) | (27 | ) | -18 | % | ||||||
| OPERATING PROFIT |
190 | 157 | 33 | 21 | % | |||||||||
| Equity income from related companies |
58 | 7 | 51 | 0 | % | |||||||||
| Financial & holding results |
(36 | ) | (84 | ) | 48 | 57 | % | |||||||
| Other incomes & expenses net |
(25 | ) | (22 | ) | (3 | ) | -14 | % | ||||||
| RESULTS FROM ORDINARY OPERATIONS |
187 | 58 | 129 | 222 | % | |||||||||
| Taxes on income |
(40 | ) | 38 | (78 | ) | -205 | % | |||||||
| NET INCOME BEFORE DISCONTINUED OPERATIONS |
147 | 96 | 51 | 53 | % | |||||||||
| RESULTS FROM DISCONTINUED OPERATIONS |
105 | — | — | 0 | % | |||||||||
| NET INCOME |
252 | 96 | 51 | 53 | % | |||||||||
| Operating (Loss)/ Profit before D & A |
398 | 395 | 3 | 1 | % | |||||||||
| As a % of Net Revenues |
43 | % | 47 | % | ||||||||||
| 12 | www.telecom.com.ar |
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: August 13, 2007 |
By: | /s/ Carlos Alberto Felices | ||
| Name: | Carlos Alberto Felices | |||
| Title: | Chairman of the Board of Directors | |||