The company cut its forecast for revenue growth in 2001 to 54 to 60%, down from a previous forecast of 66 to 71% but Versatel said that cash outflow in the second quarter had fallen to EUR120m, down from EUR130.2m in the first quarter. Moreover, the company said its continued spending reductions meant it would have sufficient funds to last until the start of 2004.
At the end of June Versatel had EUR1bn in cash and cash equivalents. It said 2001 capital expenditure would be 41 to 46% lower than the EUR466.9m it spent in 2000, compared with earlier forecasts of a 41 to 52% decline.
Versatel’s shares, which have fallen more than 95% from their 52-week high of EUR38.30, were down more than 6% at E1.64 on Tuesday morning.
The company, which provides data, voice and internet local access services to more than 62,000 business customers, has faced some troubling times this year. It was forced to close Sonne, its flat-fee German internet provider, abandoned plans to offer Europe’s biggest digital subscriber line (DSL) network after Northpoint, its US partner in the venture, collapsed. It also failed to secure a 3G mobile operating licence in the Netherlands.
In June the company said it was going back to basics to rebuild investor confidence.
In an attempt to calm investors Raj Raithatha, Versatel chief executive, said on Tuesday in a press release, We have been able to control our cost base to reflect the new market conditions and believe we have reduced our operational funding gap to below EUR100m with a funding horizon into 2004.
In the second quarter Versatel said it had been hit by the loss of EUR1.3m in revenue from a financially troubled voice reseller due to the unlikely recovery of payment.
Losses before interest, tax, depreciation and amortisation were EUR19.3m in the second quarter, down from EUR23.3m in the first quarter and EUR39.6m in the same period last year.
Revenues increased 11% quarter-on-quarter to EUR68.5m, up from EUR46.5m the year before. Net losses were EUR83.9m, excluding a EUR24.2m exceptional charge for currency fluctuations, compared with E131.2m in the first quarter.
Versatel has said that it expects to reach positive ebitda by the first quarter of 2002 – two quarters earlier than some analysts believe is possible.
