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Tecnotree Corporation Interim Report 1 January – 30 June 2012 (unaudited)

Tecnotree Corporation
Interim Report
August 8th, 2012 at 8.30 am EEST

Tecnotree is a global supplier of telecom IT solutions, providing products and services for charging, billing, customer care, and messaging and content services.  The company’s product portfolio comprises virtually the full range of business management systems for telecom operators, with standard solutions for fixed networks, mobile services and broad band and for managing subscriptions, services and cash flows for prepaid and post-paid customers. Tecnotree has a strong footing especially in developing markets.

Visible growth in second quarter
 

• Net sales for the review period were EUR 31.3 million (EUR 29.1 million for the same period in the previous year) and the adjusted operating result was EUR -3.8 (-1.6) million. The operating result was EUR -6.7 (-7.7) million and the result for the period EUR -7.7 (-9.0) million.
• Second quarter net sales, EUR 21.3 million, were higher than for any quarter since 2008 and 15 % more than in the same quarter in 2011. The adjusted operating result for the quarter was a profit of EUR 2.0 million and the result was EUR 1.2 million positive.  
• The order book at the end of the period stood at EUR EUR 58.8 million (30 June 2011: EUR 21.5 million). The high order book was due to major orders obtained in Latin America.
• Cash flow after investments was EUR 1.1 (-12.2) million.
• The Company’s rights offering was completed successfully.

* Adjusted operating result = operating result before R & D capitalisation, amortisation of this and one-time costs. Details of these are given in the section “Result analysis”.
** The key figure is adjusted for all periods presented to reflect the share issue.

President and CEO Kaj Hagros:
”Net sales in the second quarter of 2012 totalled EUR 21.3 million, which is 15 % more than in the same period in the previous year (EUR 18.5 million). Despite the low net sales in the first quarter, net sales in the first half of the year increased 8 % from the previous year. Our order book stands at a record high level, and we consider this to be encouraging proof that the strategy is being effective. In accordance with the reorganisation we announced in October 2011, we have continued to invest in product development in line with the strategy. Cash flow from operating activities has improved significantly compared to the previous year. The EUR 5.9 million rights issue in June and the new EUR 5.0 million credit facility reinforce the company’s financial position.”

Events after the end of period

After the end of the review period the Company has announced that it has signed a EUR 5.0 million revolving credit facility agreement for financing working capital.

A court in India has rejected the claim for an enforcement order by Atul Chopra made at the end of 2011 and the Tecnotree assets that had been temporarily frozen have been released.

Tecnotree has agreed on annual sales of services in Latin America that will rise gradually during the second half of 2012 from USD 7 million to more than USD 10 million.

Prospects in 2012

Tecnotree estimates that net sales and the operating result in 2012 will be better than in 2011. The adjusted operating result is estimated to be positive. Variations in the quarterly figures will be considerable. The cash flow after investments is also expected to improve compared to 2011. The adjusted operating result is the operating result before R&D capitalisation, amortisation of this and one-time costs.

Financial information

Tecnotree will publish its following interim report as follows:
1-9/2012 Wednesday, 31 October.

Tecnotree is holding a conference for analysts and the media to announce its results for the first quarter of 2012 at 10.00 am on 8 August 2012 in the Freda-Bulsa conference room at the Scandic Hotel Simonkenttä, Simonkatu 9, Helsinki. The interim review will be presented by CEO Kaj Hagros and the conference will be held in Finnish. The material to be presented at the press conference will be available at www.tecnotree.com.

TECNOTREE CORPORATION

Board of Directors

FURTHER INFORMATION
Kaj Hagros, President and CEO, tel. +358 40 849 1749
Tuomas Wegelius, CFO, tel. +358 400 433 228

DISTRIBUTION
NASDAQ OMX Helsinki Ltd.
Main media
www.tecnotree.com

About Tecnotree
Tecnotree is a global provider of a broad range of telecom IT solutions focused on charging, billing, customer care, messaging and content services. Tecnotree empowers communication service providers to create and monetize a broad marketplace of digital services, and augment value across the customer lifecycle. Acknowledged for agility and commitment, Tecnotree has more than 900 employees serving over 100 operators globally. Tecnotree is listed on the main list of NASDAQ OMX Helsinki Ltd. with the trading code TEM1V. For more information on Tecnotree visit www.tecnotree.com