Displaying items by tag: Q2

Snap Inc. disappoints again with dismal quarterly results

Written on Monday, 14 August 2017 11:17

The parent company of the app Snapchat posted Q2 results on August 10 that disappointed investors. The company went public with an IPO in March last year, and reported sluggish user growth two months later in May. One year on, Snap reported net losses of $443 million, compared to $115.9 million in 2016.

Snap generated revenue of $181.7 million during its second quarter for 2017, which ended on June 30, compared to $71.8 million during the same period last year. The company’s net losses of $433 million are equal to a loss of $0.16 per share, compared to analysts who had expected revenue of $185.8 million, and losses of $0.14 per share.

Snapchat’s daily active users grew slightly in Q2 to reach 173 million, up from 166 million during Q1 and 161 million in December. But once again, Snap Inc. disappointed analysts who had hoped for 175 million daily active users.

Majority of Snap’s new users (4 million) came from the United States and Canada, the market that’s best monetized by the company. 2 million new Snapchat users came from Europe and the rest of the world.

An average of 20 images and videos or ‘Snaps’ are shared on the Snapchat app per day, according to Snap Inc. CEO Evan Spiegal, adding that users spend an average of 30 minutes on the app per day.

The company said revenue per user in the US increased to $1.05 after falling in Q1 to $0.90. The increase was driven by significant growth in Europe, Snap said, where the Snapchat app generated $0.39 per user in the second quarter, compared to $0.24 in the first quarter.

Losses are having a significant impact on the company. Snap reported a record net loss of $2.2 billion during the first quarter, but this was mostly due to stock-based bonuses for top Snap executives. But its second quarter losses of $443 million have troubled investors, and contributed to them lowering Snap’s stock 17 percent in after-trading hours.

Published in Apps

South Korea’s SK Telecom reported revenue of KRW 4.346 trillion for Q2 2017 and operating income of KRW 423.3 billion and net income of KRW 620.5 billion. Compared to the same period last year, the revenue and operating income for the second quarter increased by 1.8% and 3.9%, respectively, owing to the improved performance of its subsidiaries including SK Broadband and SK Planet.

SK Telecom’s net income grew 113.2% year-on-year (YoY) due to factors including increased equity method gain from SK Hynix, the operator’s semiconductor business. Meanwhile, the operating income on a non-consolidated basis dropped 3.3% YoY to KRW 462.3 billion affected by increased marketing expenses and expanded depreciation costs from the 2.6 GHz frequency band it acquired last year.

Despite revenue-decreasing factors, including the increased number of subscribers who choose contract-based mobile fee discounts, the non-consolidated revenue edged up slightly compared to the same period last year to KRW 3.110 trillion backed by the growth of mobile data usage per user and increased sales from new business areas including IoT solutions.

 SK Telecom’s consolidated subsidiaries have posted improved results in the second quarter of 2017. SK Broadband’s revenue increased by 1.9% YoY to KRW 730.1 billion as the number of its UHD set-top box subscribers surpassed 1.5 million and more customers purchased paid content. SK Broadband also reported a record-high quarterly operating income of KRW 31.6 billion in the second quarter of 2017.

Moreover, for the second quarter, SK Planet posted sales of KRW 274.0 billion, up 5.4% from the same period last year backed by the growth of its e-commerce platform, 11st. In addition, through efficient management of marketing expenses, including the provision of customized coupons, SK Planet has reduced its operating loss by KRW 35.1 billion compared to the same period last year. SK Hynix contributed to the growth of the consolidated net income by posting best-ever financial results.

Based on its unmatched position as the nation’s top mobile telecommunications company, SK Telecom is “determined to evolve into a global leading ICT company by promoting media and IoT business areas,” it said.

To this end, the company plans to connect its artificial intelligence (AI) platform to other services, including mobile telecommunications, media, commerce and T Map (mobile navigation service), to secure differentiated big data, with which it can develop/provide customized products and services.

Moreover, SK Telecom is securing competitiveness in 5G as a means to strengthen its network infrastructure. In June 2017, it successfully demonstrated 5G communications using the 3.5GHz band for the first time in Korea. The company also plans to develop mutually beneficial business models with diverse partners. In particular, under the strategic partnership with SM Entertainment, SK Telecom are to create new and innovative business models by combining its ICT with SM’s strength in content business.

“Despite the challenges in the mobile telecommunications market, SK Telecom posted improved results due to the strengthened performance of its main subsidiaries,” said Ryu Young-sang, CFO of SK Telecom. “SK Telecom will become a global leading ICT company by achieving meaningful growth in media and IoT, while maintaining leadership in the mobile network operations business.”

Published in Finance

Spanish telecom giant Telefónica posted its Q2 results for 2017 showing strength in its South American subsidiaries and declines in Europe. The company showed “a general acceleration in growth in main financial and operational terms” as it moves to organically reduce its €48.5 billion debt pile rather than sell off assets.

The operator posted revenue of around €13 billion, an increase of 1.9 percent from the same quarter in 2016. Net profit for Telefónica reached €821 million, an increase of 18.4 percent from the same period in 2016. The company’s key revenue drives, it said, was mobile data revenue.

Telefónica was able to reduce its debt by €3.7 billion year-on-year, which will increase once the company completes the sale of its 40 percent stake in tower unit Telxius, which it’s selling for €1.3 billion. Telefónica moved to sell its O2 unit in the UK to help reduce its debt after it felt pressure from investors, but the company is now attempting to reduce its debt organically by improving cash flow.

“The strength and better business trends in the first half of the year, as well as being well-positioned to continue capturing sustainable growth in the coming quarters, allow us to upgrade our guidance for 2017,” commented José María Álvarez-Pallete, Executive Chairman of Telefónica.

Published in Finance

Orange returns to profit in France for first time since 2009

Written on Thursday, 03 August 2017 10:50

France’s Orange Group confirmed profits of more than that achieved in 2016 on a comparable basis in its Q2 2017 financial results. It was the first time the company has returned to profit in France since 2009. Orange said the strong results were driven by strong commercial momentum by investment and continuing efforts on the transformation of the cost structure.

“The acceleration seen in the Group’s growth was confirmed by the first-half results, and in particular the performance in the second quarter, driven by France, Europe and Africa and the Middle East,” said Orange Group Chairman and CEO Stephane Richard. “In France, we returned to growth for the first time since 2009.”

Richard added that Orange’s performance in Spain, and more generally across Europe, was “excellent” with strong revenue growth underpinned by a significant increase in high-speed broadband customers.

“The strategy that we have been following for several quarters, which centered on giving customers an unbeatable experience through convergence around the home and a quality network, is now yielding results,” he said.

“We have converted more than half of our revenue increase into EBITDA, demonstrating a good balance of growth and profitability. This has enabled us to reaffirm our objective of delivering growth in adjusted EBITDA for the full year 2017,” Richard added.

The company also strengthened its content offering in the first half of the year through the creation of Orange Content and the signing of a number of agreements with prestigious partners such as Canal+, its historic partner, and HBO. Richard said the company remains convinced that content is an effective tool for improving its offerings and keeping customers loyal while protecting value.

Orange’s revenues were 20.276 billion euros in the first half of 2017, an increase of 1.1% (+222 million euros) following an increase of 0.9% in the 2nd half of 2016 (+188 million euros).

The improved trend in the 2nd quarter was principally tied to the recovery in the Africa & Middle East segment, a continued strong performance in Spain and the return to growth in France for the first time since 2009.

The Group had operating income of 2.434 billion euros in the 1st half of 2017, an increase of 293 million euros compared with the 1st half of 2016. Operating income from the telecom activities was 2.462 billion euros, an increase of 321 million euros.

Net income was 830 million euros in the 1st half of 2017, compared with 3.323 billion euros in the 1st half of 2016. The decrease of 2.493 billion euros between the two periods was mainly linked to the impact of the sale of EE in January 2016. Net income from continuing operations declined 244 million euros. Excluding the impact of a charge related to the shareholding held in the BT Group (-349 million euros), net income from continuing operations improved 105 million euros.

Published in Finance

Facebook posts 71 percent increase in Q2 profit

Written on Thursday, 03 August 2017 10:02

Social network giant Facebook posted a 71 percent increase in Q2 profit and a 50 percent rise in mobile ad sales, extinguishing rumors that ad revenue growth had faded for the company as it runs out of ad display space. Facebook also announced a new milestone that there are now 2 billion people using the platform.

Facebook’s shares reached a record high on Thursday, July 27, after it posted positive results, adding more than $27 billion to its market value. The company’s shares increased 6 percent to $175 in early trading, adding gains worth twice the market capitalization of rival Twitter, Reuters said.

Facebook admitted that ad revenue growth is expected to slow down during 2017. Growth in ad sales did drop to 47 percent in Q2, after a 51 percent increase the previous quarter, but that didn’t seem to bother investors who are now looking ahead to new ad growth opportunities with Facebook’s other platforms including WhatsApp, Messenger and with video.

Moffett Nathanson Research analyst Michael Nathanson said, “The strength of Facebook’s mind-boggling results continued to be a testament of the platform’s massive user base and unparalleled targeting abilities.”

While Facebook reported a milestone 2 billion users, its other platforms Messenger and WhatsApp, have more than 1 billion users each. Every day, more than 175 million people share a Love reaction, and on average, over 800 million people like something on Facebook, the company claims. What’s more, over 250 million people use Instagram Stories every day, and more than 250 million people use WhatsApp Status every day.

“I'm proud of the progress our community is making, and it comes with a responsibility to make sure we have the most positive impact on the world that we can,” said Facebook chief executive Mark Zuckerberg in an online post. “That's why, last month, we updated Facebook's mission to focus not just on connecting the world, but also bringing the world closer together.”

Mobile advertizing was one of Facebook’s strongest revenue sources, accounting for 87 percent of the $9.16 billion in total ad revenue, as the average growth in ads increased 24 percent to a record high. Credit Suisse analyst Stephen Ju said advertisers will still buy Facebook ads space despite an increase in prices, due to Facebook’s superior return on investment compared with other digital platforms.

Published in Finance

Samsung Electronics posted financial results for Q2 2017. The company’s components businesses and sales of the S8 and S8+ contributed to strong results. Samsung’s revenue for the quarter was KRW 61 trillion (approximately US$ 54.2 million), an increase of KRW 10.06 trillion YoY (year on year), while operating for the quarter posted a record KRW 14.07 trillion, an increase of KRW 5.92 trillion year on year.

Samsung’s components businesses drove significant earnings in Q2, both year on year and quarter on quarter, thanks primarily to strong memory demand for high-density DRAMs and SSDs for servers.

System LSI contributed to earnings through increased sales of AP and CIS products while the Display Panel Business expanded sales of flexible OLED panels for premium smartphones and high-value LCDs under stable prices. Profits from the Mobile Business, driven by robust sales for the Galaxy S8 and S8+, also increased significantly quarter on quarter.

The Memory Business posted significant earnings growth, both year on year and quarter on quarter, amid tight supply-demand conditions while strong ASPs coupled with increased demand from the server market also contributed to profits. The System LSI Business increased sales of mobile processors and image sensors.

For the Display Panel business, OLED earnings improved quarter on quarter with the help of increased shipments of flexible displays for premium smartphones. LCD panels enhanced profitability quarter on quarter due mainly to increased sales of high-end, large-size UHD panels, amid stable ASP conditions.

 The Mobile Business saw a significant increase in earnings QoQ with the global rollout of the Galaxy S8 and S8+. However the operating profit margin declined slightly YoY due to strong component prices. Earnings for the TV business declined due to increased panel prices and slow demand from Europe and China. For the home appliances business, continued B2B investment led to a decline in earnings YoY.

Regarding Harman’s earnings in the quarter, it registered solid results from operations with USD 1.9 billion in sales and around USD 200 million in operating profit. However, with costs associated with the acquisition, net operating profit was approximately USD 5 million. Samsung expects such costs to continue to impact Harman’s results by an average of USD 100 million each quarter for the next few quarters.

Looking ahead to the third quarter, the company expects favorable semiconductor conditions to continue, although overall earnings may slightly decline QoQ as earnings weaken for the Display Panel and Mobile businesses. For the Display Panel Business, an increase is expected in initial start-up costs for the new OLED production line, and intensifying price competition is forecast from LTPS LCD in the mid- to low-end rigid OLED segment. For the Mobile Business, earnings are forecast to decline due to increased marketing costs related to the launch of a new Note device, with reduced profit contributions from the Galaxy S8 and S8+.

Moving on to the outlook for second half, the company expects earnings to grow primarily from the component businesses, as conditions in the memory market are likely to remain favorable and the company expects increased sales of flexible OLED panels. However, ASP pressures on LCD panels and on rigid OLED panels, prompted by the industry’s increase in LCD supply, may remain a concern.

For the Memory Business, solid demand for servers and mobile devices will continue due to the expansion of new server platforms, cloud services and new smartphones to market in the second half. By expanding the supply of 1Xnm DRAM and 64-layer V-NAND, Samsung will further enhance product competitiveness.

The System LSI and Foundry businesses are also expected to post positive results, while the display segment anticipates an increase in revenue from the expanded supply of flexible OLED panels.

The Mobile Business will aim to sustain the strong sales momentum of premium smartphones through the release of a new Galaxy Note smartphone and continued sales of the Galaxy S8 and S8+. It will also continue to improve the lineup efficiency in the mid- to low-end segment to maintain profitability.

For the TV business, Samsung will focus on improving profitability by expanding its high-end offerings, including ultra-large size and UHD TVs. Additionally, the company expects to solidify its leadership in the premium segment with products such as The Frame and QLED TVs. Meanwhile, the Digital Appliances Business will seek to improve profits in the B2B segment.

Looking at the mid- to long-term, the company will strongly focus on enhancing the competitiveness of the company’s core businesses. To this end, Samsung will reinforce its technological leadership in the semiconductor and OLED industries and will focus on strengthening its design and manufacturing capabilities to transform the System LSI and Foundry businesses as future growth engines.

To respond to a paradigm shift in the IT industry, the company is set to develop new growth engines by making strategic investments and securing advanced technologies through M&As. Challenges lie ahead, however, due to volatilities in the global business environment.

Total capital expenditure (CAPEX) executed in the second quarter was KRW 12.7 trillion, including KRW 7.5 trillion for the semiconductor business and KRW 4.5 trillion for the display segment. Although the capex plan for 2017 has not been finalized, the annual capex is expected to be significantly higher than the previous year.

The Memory Business plans to expand the Pyeongtaek fab to respond to increasing demand for V-NAND. The business also expects to spend capex on converting a part of existing planar capacity to V-NAND. Despite the increase in 2017 capex for the Memory Business, the memory supply outlook of Samsung for this year remains unchanged. The Foundry Business is increasing 10nm capacity to address demand for cutting-edge process technology. In addition, it expects to allocate sizable capex for converting part of line 11 from DRAM to image sensor production in the second half. Further, Samsung is continuously investing in flexible OLED capacity to respond to increasing demand from customers.

Published in Finance

Etisalat Group posts Q2 declines; UAE branch shows strength

Written on Thursday, 03 August 2017 08:11

UAE’s Etisalat Group, which operates and owns subsidiaries in the Middle East, Africa and Asia, posted its Q2 financial results for 2017. The Group’s consolidated revenues amounted to AED 25.3 billion, according to the statement.

The Group’s consolidated operating profit before Federal Royalty dropped about 11 percent to AED 8.8 billion, and its global subscriber base also dropped around 15 percent, according to analyst calculations. The UAE remains a strongpoint for the operator, where both its revenues and subscriber base increased.

In the statement, Etisalat did not provide quarterly breakdowns for its financials for the quarter. The operator’s financial statements were not immediately posted on the Abu Dhabi stock exchange’s website. Etisalat proposed a dividend of 40 fils per share for the first half of 2017, unchanged from the previous two years.

UAE is Etisalat’s strongest operation, where its customer base increased 2 percent. The operator’s revenue in the UAE also increased to AED 2.2 billion, representing a 6 percent increase year over year and 7 percent increase compared to Q1 2017. But Etisalat’s aggregate subscriber base fell to 139 million across its footprint, compared to 163 million for the same period last year.

Etisalat thanked the United Arab Emirates for its “continued support” in the statement, and also thanked the company’s management team for their efforts in remaining focused on accelerating the operator’s long-term strategy to drive shareholder value. Etisalat also thanked its “loyal customers” for inspiring the company to set new benchmarks and reach new business heights.

The CEO expressed his pride in the company for being a “key strategic player in major digital transformation projects in the UAE and beyond. Our recent announcement of the longest submarine cable system is another step to enhance our long-term growth and bring new capacity to UAE making it an international hub.” Abdooli was referring to Etisalat’s role in enhancing international connectivity to UAE with the AAE-1 Submarine Cable System.

Etisalat Group’s results were affected by its recent cut with ties to Etisalat Nigeria, in Africa’s most populous market, after the country’s currency dropped which led to Etisalat’s subsidiary defaulting on loan payments. The loan Etisalat Nigeria received was to refinance a $650 million loan and fund expansion of the operator’s network.

Etisalat reportedly “pulled out” and intervened in the loan renegotiation talks to prevent job losses and asset stripping. Etisalat Nigeria has since been rebranded as 9mobile and is actively looking for bidders.

Published in Finance

Saudi Arabia’s STC shared its Q2 2017 financial results showing a 7.9 percent net income increase compared to the same period last year to reach SR 2.4 billion (US$640 million). STC Group CEO Dr. Khaled H. Biyari said the results reflect the company’s move to embrace digital transformation and Saudi Vision 2030.

“The financial results achieved for the 1st half of 2017 reflects the efforts being made to constantly evolve, improve and develop the company’s strategy and operations and achieve the best returns for the shareholders,” said Dr. Biyari in a statement. “Despite the various difficulties facing the sector, STC sponsored programs contributed to improve operational efficiency leading to improved income and margins.”

For the first half of 2017, STC’s net income reached SR 4.9 billion, an increase of 6.6% compared to same period last year. Earnings per share for the first half of 2017 grew to reach SR 2.45 compared to SR 2.30 for the comparable period last year.  

Dr. Biyari said, “The whole region is moving towards digital transformation through elements of the fourth industrial revolution, here comes the importance of governments in the region to provide the right environment and stimulate investment in digital infrastructure.”

STC embraced Saudi Arabia’s Vision 2030 initiative, he said, and the national transformation program 2020 through multiple initiatives, which include deployment of broadband throughout the Kingdom. Saudi Vision 2030 is a national plan to reduce the nation’s dependence on oil, diversify its economy, and develop service sectors such as health, education, infrastructure, recreation, and tourism.

STC recently signed with the Ministry of Communications and Information Technology to provide high speed broadband with fiber-optic technology to more than 2 million homes projected to cost up to SR 7.3 billion.

The company will also “continue to invest in promising technologies and digital sectors, particularly in areas that enable the company to benefit from their assets and infrastructure and help enable growth and expansion of investments in different areas,” said Dr. Biyari. The latest company announcement was establishing a $500 million venture capital fund (STV) to strengthen this trend.

In accordance with the approved dividend policy for three years starting from the 4th quarter 2015 which was announced on 11 November 2015, and having been ratified during the General Assembly Meeting on April 4th 2016, STC will distribute a total of SR 2,000 million in cash dividend for Q2 2017, representing SR 1 per share. 

Published in Finance

Social networking colossus Facebook has seen its shares soar to a record high after it disclosed the financial results of its second quarter, which revealed that its mobile advertising business has grown by a staggering 50%. The results reaffirm the view that Facebook is now the venue of choice for an ever-increasing amount of online advertisers.

Facebook owns four of the most popular mobile services in the world, and it has seen it shares rise by more than 4% to $173 following after-trading on the Wall Street Stock Exchange. However, overall Facebook’s stock price has climbed to almost 44% this year.

Facebook has been adding more and more advertising into its Facebook News Feed, but that has become condensed, whilst it has also added adverts to its photo-sharing app Instagram, which has more than 700 million users. Facebook currently has over 2 billion users worldwide.
Facebook CEO, Mark Zuckerberg has confirmed that he plans to monetize its two messaging services Messenger and WhatsApp, which combined have more than 1 billion users each. Zuckerberg has expressed his desire to see the company move faster on this aim, but claimed he is confident they will get it right in the long-term.

Facebook also continues to accelerate its push into video, the social networking giant has identified this as an opportunity to win advertising spend from the TV industry, as more and more people spend their time consuming news and video content on its platform. Facebook is expected to launch a new video service that will include scripted shows, which is a sharp change of strategy from an organization which is founded on user-generated content.

Zuckerberg has previously stated that he firmly believes that video represents the future of Facebook’s business over the next 2-3 years. Facebook has officially confirmed that its total revenue rose form 44.8% to $9.32 billion in the second quarter of the year, which beat the average forecast of the $9.20 billion predicted by financial analysts. Facebook enjoyed incredible growth in mobile advertising, which has increased to nearly $8 billion.

Facebook Chief Financial Officer, David Wehner, expressed his delight at the financial results, and claimed that he expected to see Facebook continue to grow its mobile advertising capacity. He said: “In mobile we're continuing to see great strengths. We're seeing more and more ad dollars getting allocated to mobile, and we think that trend will continue."

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Emirates Integrated Telecommunications Company PJSC (“du”) published its financial results on July 25 for the quarter ended 30 June 2017, and announced its plans to distribute AED 589.3 million of interim dividends to its shareholders for the first half of 2017 at 13 fils per share, subject to approval at the General Meeting in September 2017.

In its published financial results for the second quarter of 2017, the company delivered AED 3.26 billion in Revenue, up 6.2% from AED 3.07 billion in Q2 2016. Net Profit before royalty was AED 974 million for the period.

“EITC has made steady progress in the second quarter of 2017, with a 6.2% increase in Revenue and a slight improvement in Net Profit,” said CEO Osman Sultan. “Driven by growth in handset sales, wholesale and fixed revenues, total Revenue reached AED 3.26 billion in Q2 2017, representing a 6.2% increase over the same period last year. Revenue has also shown growth over the first six months of the year with a 4.3% increase to AED 6.42 billion.

Mr. Sultan added that the company’s mobile customer base increased 1.5% during Q2 2017 to 8.2 million customers, up from 8.1 million in Q2 2016. This was largely due, he said, to the company’s strategy of focusing more on attracting and retaining higher quality customers, with solid growth in post-paid customer additions.

Despite a steady performance during the quarter and the first half of the year, EITC continues to be impacted by challenging market conditions, Mr. Sultan added, with pressure on mobile rates and data monetization. Consequently, EBITDA and Net Profit stand at the same level as Q2 2016.

“Looking towards a smart future, we have made further investments into Smart Dubai, the Virgin Mobile brand and adjacent markets,” he said. “We will continue to invest in the future generation capacity of the business; EITC is a digital enabler and will be able to create new revenue opportunity as digital transformation for both consumers and enterprises opens up new markets.”

A major highlight for the second quarter of the year for EITC was its progress with the introduction of the Virgin Mobile brand. During the period, the company began a program of pre-launch customer registration and conducted trial tests.

“We enrolled a few select number of UAE residents to test the product and its customer service, and are happy with the feedback received,” said Mr. Sultan. “We look forward to the full commercial launch of the Virgin Mobile brand in the UAE soon, and with it, bringing a fully digital and premium customer experience.”

He concluded, “Our results are backed by our commitment to the future development of a digitally-enabled ecosystem. During the period, we achieved a milestone development in connectivity technology, with the successful testing of a 5G solution that will significantly upgrade connectivity speed for our users. With this initiative and more to come, we remain committed to a smart future, and the Government’s vision for a smart nation.”

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