Colt reports fall in adjusted Q1 Ebitda; shares slip

Colt Group shares slipped as much as 14 per cent on Tuesday after the telecom services provider announced a notable fall in its adjusted earnings before interest, taxes, depreciation & amortization (Ebitda) in the first quarter of this year and slashed its full-year earnings expectations.

Luxembourg-based Colt, which operates fibre-optic networks and data centers for large & mid-sized companies, announced that its adjusted Ebitda slipped from EUR80.5 million in the January-March quarter of 2013 to EUR74.1 million in the same of three-month period of this year.

The company suffered the decline in Ebitda despite a considerable rise in revenue, which jumped from EUR392.1 million to EUR399.8 million in the quarter under review.

The struggling company also revealed that it would withdraw nearly 85 per cent of its voice contracts in the coming few months as part of a strategic review, which would involve job cuts.

In addition, the company warned that it would take charges of around EUR30 million in the second half of current year, and that its full-year profit would miss market estimates.

Carl Murdock-Smith, an analyst with J. P. Morgan Cazenove, said, "Given that Colt's record of cash generation is poor, we believe further execution will have to be shown before the potential of Colt's plans is reflected in share price performance."

Murdock-Smith added that that the company's yesterday's warning was unlikely to help in its efforts to build confidence over time.

Shares of Cold Group were trading at 127.8 pence apiece, down 11.68 per cent, at 1202 GMT on the London Stock Exchange.

Business: 
Companies: 
General: