QSC continues to grow in Q3 despite difficult market environmentCologne, November 27, 2001. QSC AG, Germany's professional DSL provider, generated revenues of EUR 7.8 million in the third quarter of 2001, compared to EUR 1.2 million in Q3/2000. Cumulative revenues were EUR 20.2 million for the first nine months of the current business year (Q1-Q3/2000: EUR 1.7 million). As at September 30, 2001, a total of 26,779 lines had been sold of which 17,557 lines are generating revenues in 2001 and 9,222 will start to generate revenues in 2002 respectively.
Pre-tax earnings in the third quarter amounted to EUR -23.6 million (Q3/2000: EUR -21.5 million). For the first nine months of the current business year, earnings totalled EUR -78.3 million (Q1-Q3/2000: EUR -51.7 million), once again a marked improvement on market expectations. The EBITDA loss for the same period was EUR 64.6 million (Q1-Q3/2000: EUR -44.0 million).
A quarter-on-quarter comparison of these figures indicates that the turnaround has now been achieved, despite the difficult market environment. EBITDA losses in the third quarter of 2001, at EUR 18.9 million, were 20% lower than in the second quarter of 2001 (EUR -23.6 million).
There was also a substantial reduction of the cash burn rate in the third quarter of 2001. As at September 30, 2001, QSC AG had cash and cash equivalents totalling EUR 175.9 million and remained almost debt-free (financing debts of EUR 0.4 million).
QSC reiterates its forecast financial results for the current business year, according to which sales are planned to reach EUR 26-34 million, with EBITDA losses expected to range between EUR 85 and 100 million. A major increase in line sales is expected to result not only from active marketing of the Q-DSL brand during the pre-Xmas period, but also from new sales co-operations. Starting in December, the latest sales co-operation with Tiscali in 46 German cities will boost sales of DSL lines on QSC's network. Both co-operation partners estimate that at least 20,000 new customers will subscribe to Tiscali DSL FlatPlus in 2002.
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This Adhoc annoucement contains forward-looking statements pursuant to the US "Private Securities Litigation Act" of 1995). These forward-looking statements are based on current expectations and forecasts of future events by the management of QSC AG. Due to risks or mistaken assumptions, actual results may deviate substantially from those made in such forward-looking statements. The assumptions that may involve material deviations due to unforeseeable developments include, but are not limited to, the demand for our products and services, the competitive situation, the development, dissemination and technical performance of DSL technology and its prices, the development and dissemination of alternative broadband technologies and their respective prices, changes in respect of telecommunications regulation, legislation and adjudication, prices and timely availability of essential third-party services and products, the timely development of additional marketable value-added services, the ability to maintain and enlarge upon marketing and distribution agreements and to conclude new marketing and distribution agreements, the ability to obtain additional financing in the event that management's planning targets are not attained, the punctual and full payment of outstanding debts by sales partners and resellers of QSC AG, and the availability of sufficient skilled personnel.