Slow Profits for Danish Group - Job Cuts Announced

Denmark's Sonofon has reported modest growth in revenues and earnings in tough trading conditions.

Revenues in Q3 2003 were up 3% on Q3 2002 to US$168 million. EBITDA amounted to US$49.5 million DKK, up 4% on the same period last year. The operating profit margin for Q3 was 29%. In the first nine months of the year, Sonofon's own mobile customer base amounted to 1,085,000, which is 53,000 more subscribers than at the end of the same period last year.

"Due to the rapidly falling prices there has been a slowing of the considerable progress in revenues reported in the spring. However, Q3 has gone better than Q2 with 12% more airtime minutes on our network compared to the same period last year, but the big price cuts have by and large cancelled out the growth in minutes," says Tage Reinert, acting CEO.

The company has also announced a cost cutting plan that will lead to about 80 job losses by the end of this month. Rationalization will affect staff throughout the organization, although manning at the telephones in Customer Service and in Sonofon stores will not be affected.

"We intend to ensure that, as a business, Sonofon continues to grow and is geared up for the changes we are seeing in the telecoms sector with Internet-based self-service solutions and rapidly falling prices. So we have to make our existing business more efficient. This means that we shall now be reviewing every operation in Sonofon and rationalizing our core business where it is fiscally and commercially sensible to do so. We intend to be there on the winners' podium when the sector gets back to normal again," said Reinert."

Posted to the site on 3rd November 2003