OUTREMER TELECOM : Groupe Outremer Telecom: Growth in 2011 First-Half Results

Regulatory News:

Groupe Outremer Telecom (FR0010425587 - Paris:OMT), the leading alternative telecom operator in the French Overseas Regions (FOR), today publishes its consolidated and audited* results for the first half of 2011.

Simplified income statement
(in ?m IFRS)		H1 2011		H1 2010		? (?m)
Revenue		94.2		90.9		+?3.3m
Gross margin     % of total revenue		57.3 60.8%		53.6 59.0%		+?3.7m
EBITDA     % of total revenue		26.5 28.1%		21.3 23.5%		+?5.2m
Operating income		14.5		7.7		+?6.8m
Net income		10.5		4.8		+?5.7m

Revenue: ?94.2m

Over the first half of 2011, Outremer Telecom's sales totalled ?94.2m, an increase of 3.7%.

The Group recorded growth of 10.0% in the French West Indies and French Guiana zone, whilst activity in the Indian Ocean zone slipped 2.4%.

Revenue from Mobile activity was up 8.8% despite the still-significant impact of the reduction in call termination tariffs. Professional activity was also up 8.4% compared to the first half of 2010.

Lastly, over the first half of 2011, Internet revenue saw a return to growth of around 10.8%.

At 30^th June 2011, the Group had 585,187 subscribers to its offers, 467,052 of whom were active subscribers.

Gross margin: ?57.3m (+6.8%)

The gross margin improved by 6.8% over the first half of 2011, thus recording a faster rate of growth than revenue. The gross margin rate reached 60.8% due to the combined effect of increasing revenue and control over network and technical costs (-0.8%).

EBITDA: up 24.3%

The Group's EBITDA continued to improve over the first half of 2011 and is close to sectorial norms. It totalled ?26.5m, an increase of 24.3%, giving an EBITDA margin of 28.1% over the half, compared to 23.5% over the first half of 2010.

This improvement was the result of the increase in the gross margin and the 5% fall in operating costs essentially associated with the decrease in provisions for client debts.

EBITDA split

IFRS / ?m		30/06/11		30/06/10		?
FWI/Guiana		20.9		15.5		+35%
% of revenue		35%		28%
Indian Ocean		7.3		6.5		+13%
% of revenue		22%		19%
Other (incl. head office costs)		-1.7		-0.6		ns
TOTAL		26.5		21.3		+24%
% of revenue		28%		23%
IFRS / ?m		30/06/11		30/06/10		?
Residential		7.8		7.0		+11%
% of revenue		31%		27%
Mobile		16.1		11.4		+42%
% of revenue		27%		21%
Professional		4.4		3.6		+21%
% of revenue		56%		50%
Other (incl. head office costs)		-1.8		-0.7		ns
TOTAL		26.5		21.3		+24%
% of revenue		28%		23%

The French West Indies and French Guiana zone provided the largest contribution to Group EBITDA over the first half of 2011, with a 35% increase in its performance.

Increase in operating income and net income

With depreciations and other allowances totalling some ?12m, a decrease of 12% compared to the first half of 2010, the Group's operating income was up 88.0% to ?14.5m.

Over the first half of 2011, Outremer Telecom benefited from the debt reduction measures instigated since FY 2010, with the net borrowing costs almost halved to ?0.7m.

Lastly, the Group wrote down a tax charge of ?3.6m for the first half of 2011.

Net income for the first six months of 2011 thus totalled ?10.5m, giving a net margin of 11.2%, compared to 5.2% a year earlier.

Improvement in cash flow and the financial structure

The Group's cash flow recorded an improvement, with free cash flow totalling ?17.2m over the first half of 2011 (up 22.9% on the 1^st half of 2010).

The Group continued to reduce its debt, both by reimbursing ?3.0m in loans and by increasing its cash position by ?6.8m to ?44.5m at 30^th June 2011.

Outremer Telecom's net debt stood at ?9.8m at 30^th June 2011, versus ?34.0m at 30^th June 2010.

Outlook for the 2^nd half of 2011

Over the 1^st half of 2011, Outremer Telecom reached an EBITDA margin of 28.1%, which is close to the levels recorded by telecom sector leaders.

These results were almost entirely due to the outperformance of the Group's most mature zone, the French West Indies and French Guiana zone. Indeed, for a number of quarters, Outremer Telecom has experienced a recurrent underperformance in the Indian Ocean zone, notably on the island of Reunion. It has therefore been decided to modify the organisation of the Indian Ocean zone. The job of Executive Vice President Indian Ocean Zone is henceforth the responsibility of Mr Matthieu Cocq, Deputy CEO for Strategy and Development.

Moreover, some of the fiscal measures announced by the French Prime Minister on Wednesday 24^th August 2011 could be applicable from the closing of accounts to 31^st December 2011. The planned abolition of the allowance the Group benefits from vis-à-vis some of its taxable income from the French Overseas Regions could thus affect the Group's accounts.

The Group is nevertheless reaffirming its EBITDA target for 2011, conditional on the evolution of the global economic situation.

Change in the Group's shareholding

Having been granted authorisation by the French competition authority, on 1^st August OMT Invest registered a Simplified Takeover Bid project with the Autorité des Marchés Financiers stock market regulators. This Simplified Takeover Bid will begin in September 2011 and concerns all of the Company's remaining shares at a price of ?12 a share excluding any dividend distribution.

* Following the favourable opinion issued by the Audit Committee at its meeting of 30^th August 2011, the Board of Directors, which met on 31^st August 2011 under the chairmanship of Mr Jean-Michel Hégésippe, approved the Group's accounts for its first half to 30^th June 2011. Audit procedures have been carried out. The auditors have completed their audit and are preparing to issue their reports.

About Outremer Telecom

Founded in 1986, Groupe Outremer Telecom has established itself in the French Overseas Regions (Martinique, Guadeloupe, French Guiana, Reunion and Mayotte) as the leading alternative telecom operator able to offer a full range of fixed line, mobile and Internet access services for both residential and business customers. Groupe Outremer Telecom has developed its own telecom network and has a single brand; Only. The group intends to develop the convergence of its various offers, its business customers and pursue its innovative and competitive services.

Next press release
Revenue for the third quarter of 2011: Tuesday 15^th November 2011

APPENDICES: half-year accounts

CONSOLIDATED BALANCE SHEET

(in EUR 000)		30/06/2011		31/12/2010
Goodwill		41,634		41,634
Other intangible fixed assets		25,078		24,438
Tangible fixed assets		67,048		64,110
Non-current financial assets		1,293		1,259
Deferred tax		6,070		9,394
Total non-current assets		141,123		140,835
Stocks		3,486		2,719
Accounts receivable from clients		25,124		26,412
Tax receivables		31		31
Other current assets		6 ,850		6,338
Cash & cash equivalents		44,760		38,379
Total current assets		80,250		73,880
TOTAL ASSETS		221,373		214,714
in EUR 000)		30/06/2010		31/12/2010
Capital		2,756		2,756
Share premium		108,721		108,721
Consolidated reserves		(27,746)		(34,573)
Conversion reserve		41		41
Profit for the financial year		10,506		13,889
Equity capital - Group share		94,279		90,834
Minority interests		345		398
Total equity capital		94,623		91,232
Loans and debts		28,848		24,735
Employee benefits		1,703		1,640
Provisions		3,792		3,448
Deferred tax		247		339
Other non-current liabilities		2,545		3,218
Total non-current liabilities		37,135		33,381
Loans and debts		25,739		25,190
Provisions		2,032		1,866
Due from suppliers and related accounts		39,605		40,621
Other current liabilities		21,793		22,400
Tax due		446		25
Total current liabilities		89,615		90,102
TOTAL LIABILITIES		221,373		214,714

CONSOLIDATED INCOME STATEMENT

(in EUR 000)		30/06/2011		31/12/2010		30/06/2010
Turnover		94,220		188,125		90,874
External purchases		(50,209)		(104,023)		(50,841)
Employee costs		(14,238)		(28,976)		(14,565)
Duties and taxes		(1,595)		(3,459)		(1,472)
Provisions		(317)		(569)		(260)
Other operating expenses		(2,377)		(8,248)		(3,200)
Other operating income		1,020		4,312		785
Operating profit before depreciation		26,504		47,163		21,321
Depreciation and amortisation		(11,997)		(25,655)		(13,606)
Operating profit		14,507		(21,508)		(7,715)
Net borrowing costs		(726)		(2,282)		(1,420)
Other financial income and charges		292		(247)		(419)
Change in the Fair Value of debt hybrid instruments
Pre-tax profit		14,073		18,978		5,876
Income tax		(3,563)		(4,860)		(1,107)
Net profit for the financial year		10,511		14,119		4,769
Net profit - Group share		10,506		13,889		4,701
Net profit - minority interests		4		229		69
Earnings per share
Earnings per share		0,50		0,67		0,23
Diluted earnings per share		0,50		0,66		0,23

CONSOLIDATED STATEMENT

(in EUR 000)		30/06/2011		31/12/2010		30/06/2010
Net profit for the financial year		10,511		14,119		4,769
Other elements of the overall profit:
Conversion differences		-		101		137
Total		-		101		137
Total profit for the financial year		10,511		14,220		4,906
Of which Group share		10,506		13,990		4,838
Of which minority interest share		4		229		69

CASH FLOW STATEMENT

(in EUR 000)		30/06/2011		30/06/2010
Total consolidated net profit		10,510		4,769
Elimination of effects of :
- Unrealised profits (losses) on financial instruments		(443)		418
- Net allocations to depreciation and provisions		12,257		13,871
- Other income and expenses		327		119
- Profits/losses on sales		114		(42)
- Tax income		3,562		1,107
- Interest charge		877		1,454
Effect of changes in stocks		(766)		214
Effect of change in customer receivables and other debtors		774		2,047
Effect of change in supplier debts and other creditors		(3,054)		(2,065)
Cash flows from operating activities before tax and interest		24,158		21,893
Tax paid		90		(133)
Interest paid		(731)		(1,404)
Cash flows from operating activities		23,517		20,356
Effects of changes in consolidation structure		-		-
Acquisitions of tangible and intangible fixed assets		(6,328)		(6,753)
Investment subsidies received		-		-
Change in loans and advances granted		(34)		189
Disposals of tangible and intangible fixed assets		-		169
Cash flows from investment activities		(6,362)		(6,395)
Bond issues		55		395
Bond redemptions		(2,980)		(4,410)
Dividends paid to minority shareholders		(56)		(98)
Dividends paid to Group shareholders		(7,313)		-
Sale (acquisition) of own shares (net)		(74)		(96)
Cash flows from financial activities		(10,368)		(4,209)
		6,787		9,752
Opening cash flow		37,751		24,857
Effect of changes in interest rates		(1)		28
Cash flow at year end		44,538		34,637

Groupe Outremer Telecom
Vincent Fabre
Chief Financial and Administrative Officer
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NewCap.
Financial Communications Agency
Simon-Laurent Zaks / Pierre Laurent
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