Colt on Friday posted a hefty net loss for the first half of 2015, driven by restructuring charges and currency fluctuations.
The U.K.-based telco generated revenue of €790.8 million during the six months to 30 June, down 1.3% on a constant currency basis as the company’s withdrawal from the carrier voice market offset the revenue contribution from KVH, the Japan-based data centre operator it bought last November for ¥18.595 billion (€130.3 million). KVH has since been rebranded Colt Asia.
Colt’s operating costs increased 16.5% to €217 million due to the inclusion of Colt Asia, and foreign currency movements, resulting in an operating loss of €11.4 million, compared to a €0.3 million loss in the first half of 2014.
In late June, Colt announced plans to stop offering IT services and focus on its infrastructure operations, a move that would generate restructuring costs and a non-cash impairment charge.
On Friday, Colt confirmed that its exit from the IT services market resulted in €32.2 million of restructuring costs and an €87.1 million impairment charge in the first half. The addition of a one-off charge of €9.1 million stemming from major shareholder Fidelity’s buyout offer earlier in June meant that Colt incurred exceptional items of €128.4 million in the first half.
As a result, Colt posted a first half net loss of €144.4 million, compared to a profit of &eur o;2.4 million in the first half of 2014.
"The decisions we have made over the last couple of years, including the acquisition of KVH, the reorganisation into the lines of business and go-to market alignment, are starting to deliver results," said Colt CEO Rakesh Bhasin, who insisted the company is on a solid footing.
For full-year 2015, Colt said it aims to generate revenue of €1.50 billion-€1.52 billion. In 2016, the company has targeted revenue of €1.50 billion-€1.53 billion.
"Through the implementation of our new business plan, which we announced in June, we will continue to focus and simplify the organisation and we are confident we will deliver our recent guidance for the core business," said Bhasin.
