27 October 2017 at 8:30 am

Tecnotree is a global provider of IT solutions for the management of services, products, customers and revenue for Communications Service Providers. Tecnotree helps customers to monetise and transform their business towards a marketplace of digital services. Together with its customers, Tecnotree empowers people to self-serve, engage and take control of their own digital life.


Net sales, MEUR 12,2 16,2 39,5 45,4 60,1
Adjusted operating result, MEUR ¹ 1,6 1,8 5,3 0,5 1,2
Operating result, MEUR 1,4 0,8 4,3 -0,5 -10,1
Result before taxes, MEUR 1,2 -0,3 2,1 -5,4 -5,6
Adjusted result for the period, MEUR ² 0,3 -0,1 -0,4 -7,3 -4,2
Result for the period, MEUR 0,1 -1,1 -1,4 -8,2 -6,3
Earnings per share, basic, EUR 0,00 -0,01 -0,01 -0,07 -0,05
Order book, MEUR     25,4 23,9 24,9
Cash flow after investments, MEUR 1,6 -2,4 4,8 -4,7 -0,9
Change in cash and cash equivalents, MEUR 1,2 -2,1 -1,0 -5,3 -3,0
Cash and cash equivalents, MEUR     2,1 1,0 3,5
Equity ratio %     15,3 11,4 17,9
Net gearing %     219,5 399,8 195,6
Personnel at end of period     696 892 818

¹Adjusted operating result = operating result without one-time costs. Details of these are given in the section “Result analysis”.
²Adjusted result for the period = result for the period without one-time costs in the operating costs and 2016 restructuring income in financial items.

With reference to the new guidelines on alternative performance measures issued by the European Securities and Markets Authority (ESMA), Tecnotree uses the alternative performance measures “adjusted operating result” and “adjusted result for the period”. These measures are defined in the footnote to the above table, and in the table “Income statement, Key figures” under the section “Result analysis”.

Unless otherwise stated, all figures presented below are for the review period 1-9/2017 and the figures for comparison are for the corresponding period 1-9/2016.

CEO Padma Ravichander:
During the report period, we have been successful in reducing the costs and improving the profitability, whereas the revenue continues to be a challenge. The revenue decreased in both geographical areas in the way that the revenue from maintenance and support services increased somewhat while the revenue from contract works and other services showed a clear decrease.

Negotiations on some major contracts proceeded and there are several projects to go live by the end of this year. The order book at the end of the report period amounted to EUR 25.4 million compared with EUR 23.9 million at the end of the same period last year. The order book is growing specifically in the area MEA & APAC.

The operating result for the period stood at EUR 4.3 million showing an improvement compared with EUR -0.5 million during the corresponding period last year. The profitability reflects these activities, which company has undertaken during the year. The reported figures now indicate that the company is in the right path.

We continued our cost optimization program. The total operating costs (excluding one-time costs) stood at EUR 34.3 million being down by 24% compared to the costs of EUR 45.0 million during the same period in last year. The optimization of human resources continued in all locations and the headcount decreased by 22%. The co-operation negotiations in Finland were concluded during the report period, with the targeted savings of EUR 1.1 million annually. Mainly the impact of cost reduction measures will become visible in the coming quarters.

All in all, the financial performance of the company has improved in the review period, showing a positive trend. The decrease in revenue is substantial and so is the reduction in costs, which has improved the operating result for the period.

To pursue the good progress, Tecnotree will focus on the internal transformation of the company in the following areas:

•   Further maintaining operating expenses
•   Consolidating and rationalizing product portfolio 
•   Building greater level of productisation and re-use

This major transformation of the company shall improve overall quality, profitability and attractiveness of our products.

The company estimates that its net sales will be less in 2017 than in the previous year and the operating result will be better than in 2016. Net sales was EUR 60.1 million and the operating result was EUR -10.1 million.

The company continues to be financially constrained and the liquidity will remain extremely tight. The amount of overdue trade payables have remained unchanged both in the Group and in the parent company. At the publication of the financial statements, there is no certainty about 12- month sufficiency of long-term, short-term and working capital financing.

The company is engaged aggressively to collect its receivables from the key customers, contemplating a financing arrangement to secure the continuity of its operations and to strengthen its capital and negotiating with financiers to secure long-term external funding through investors, which could be implemented through company or restructuring arrangements. The company follows the restructuring program and implements operational efficiency measures.

The company’s ability as going concern is dependent on the successful completion of the financing transactions and its ability to continue to execute payments according to debt restructuring payment programme. The company has agreed with two biggest creditors to postpone the due date of late payment at the end of August until the end of November 2017.

The company will continue the EUR 5 million saving program initiated in March 2017. The company expects to achieve its targets by reducing rented premises, reducing travel expenses, focusing on locations, reducing external services and personnel costs. Actions have done during the review period, but mostly, the cost savings will realize during 2018.

The company estimates that quarterly fluctuations are significant.

Board of Directors

Further information, investors and media:
Padma Ravichander, CEO, tel +97 156 414 1420
Kirsti Parvi, CFO, tel +358 50 5174569

For more information, please visit  www.tecnotree.com.



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