Telefónica O2 Czech Republic, a.s. Group (the “Group”) consists of Telefónica O2 Czech Republic, a.s. (the “Company”) and its subsidiaries: Telefónica O2 Slovakia, s.r.o., Telefónica O2 Business Solutions, spol. s r.o. (formerly Telefónica O2 Services, spol. s r.o.), CZECH TELECOM Germany GmbH and CZECH TELECOM Austria GmbH.
The Company has a form of a joint stock company and is incorporated and domiciled in the Czech Republic. The address of its registered office is Za Brumlovkou 266/2, Prague 4, 140 22, Czech Republic.
The Group is a member of the Telefónica Group of companies (the “Telefónica Group”) with a parent company, Telefónica, S.A. (the “Telefónica”).
The Company is the principal supplier of fixed line telecommunication services and is one of the four suppliers of mobile telephone services in the Czech Republic.
The Company’s shares are traded on the Prague Stock Exchange and London Stock Exchange (GDRs).
These condensed consolidated financial statements were not audited.
Interim consolidated statement of comprehensive income
For the six months ended 30 June 2010
| In CZK million | Notes | For the six months ended 30 June 2010 |
For the six months ended 30 June 2009 |
|---|---|---|---|
| Revenue | 1 | 27,908 | 29,803 |
| Gains from sale of non-current assets | (3) | 356 | |
| Internal expenses capitalized in fixed assets | 310 | 391 | |
| Operating expenses | (16,993) | (16,837) | |
| Impairment loss | (13) | (20) | |
| Depreciation and amortisation | (5,733) | (6,234) | |
| Operating profit | 1 | 5,476 | 7,459 |
| Interest income | 34 | 108 | |
| Interest expense | (132) | (141) | |
| Other finance expense (net) | (23) | (99) | |
| Profit before income tax | 1 | 5,355 | 7,327 |
| Taxes on income | 2 | (1,001) | (1,605) |
| Profit for the year | 1 | 4,354 | 5,722 |
| Other comprehensive income | |||
| Translation differences | (59) | 103 | |
| Other comprehensive income, net of tax | (59) | 103 | |
| Total comprehensive income, net of tax | 4,295 | 5,825 | |
| Profit attributable to: | |||
| Equity holders of the Company | 4,354 | 5,722 | |
| Total comprehensive income attributable to: | |||
| Equity holders of the Company | 4,295 | 5,825 | |
| Earnings per share (CZK) – basic * | 14 | 18 | |
*There is no dilution of earnings as no convertible instruments have been issued by the Company.
Interim consolidated statement of financial position
As at 30 June 2010
| In CZK million | Notes | 30 June 2010 | 31 December 2009 |
|---|---|---|---|
| ASSETS | |||
| Property, plant and equipment | 54,523 | 57,545 | |
| Intangible assets | 21,980 | 22,477 | |
| Investment in associate | 9 | 9 | |
| Other financial assets | 333 | 285 | |
| Non-current assets | 76,845 | 80,316 | |
| Inventories | 473 | 618 | |
| Receivables and prepayments | 8,962 | 9,773 | |
| Income tax receivable | 874 | 697 | |
| Cash and cash equivalents | 6 | 8,373 | 1,269 |
| Current assets | 18,682 | 12,357 | |
| Non-current assets classified as held for sale | 161 | 95 | |
| Total assets | 95,688 | 92,768 | |
| EQUITY AND LIABILITIES | |||
| Ordinary shares | 32,209 | 32,209 | |
| Share premium | 24,374 | 24,374 | |
| Retained earnings, funds and reserves | 8,721 | 17,296 | |
| 65,304 | 73,879 | ||
| Minority interest | – | – | |
| Total equity | 65,304 | 73,879 | |
| Long-term financial debts | 2,956 | 3,044 | |
| Deferred taxes | 3,060 | 3,333 | |
| Non-current provisions for liabilities and charges | 24 | 24 | |
| Non-current other liabilities | 30 | 21 | |
| Non-current liabilities | 6,070 | 6,422 | |
| Short-term financial debts | 191 | 87 | |
| Trade and other payables | 23,613 | 12,092 | |
| Provisions for liabilities and charges | 510 | 288 | |
| Current liabilities | 24,314 | 12,467 | |
| Total liabilities | 30,384 | 18,889 | |
| Total equity and liabilities | 95,688 | 92,768 | |
Interim consolidated statement of changes in shareholders’ equity
For the six months ended 30 June 2010
| In CZK million | Notes | Share capital | Share premium | Foreign exchange translation reserve | Equity settled share based payments reserve | Funds | Retained earnings | Total |
|---|---|---|---|---|---|---|---|---|
| At 1 January 2009 | 32,209 | 24,374 | (206) | 47 | 6,452 | 15,292 | 78,168 | |
| Currency translation differences – amount arising in year | - | - | 103 | - | - | - | 103 | |
| Net income and expense recognised directly in equity | - | - | 103 | - | - | - | 103 | |
| Net profit | 1 | - | - | - | - | - | 5,722 | 5,722 |
| Total comprehensive income | - | - | 103 | - | - | 5,722 | 5,825 | |
| Capital contribution | - | - | - | 10 | - | - | 10 | |
| Dividends declared in 2009 | 3 | - | - | - | - | - | (16,104) | (16,104) |
| At 30 June 2009 | 32,209 | 24,374 | (103) | 57 | 6,452 | 4,910 | 67,899 | |
| At 1 January 2010 | 32,209 | 24,374 | (55) | 38 | 6,452 | 10,861 | 73,879 | |
| Currency translation differences – amount arising in year | - | - | (59) | - | - | - | (59) | |
| Net income and expense recognised directly in equity | - | - | (59) | - | - | - | (59) | |
| Net profit | 1 | - | - | - | - | - | 4,354 | 4,354 |
| Total comprehensive income | - | - | (59) | - | - | 4,354 | 4,295 | |
| Capital contribution and other transfers | - | - | - | 14 | - | - | 14 | |
| Dividends declared in 2010 | 3 | - | - | - | - | - | (12,884) | (12,884) |
| At 30 June 2010 | 32,209 | 24,374 | (114) | 52 | 6,452 | 2,331 | 65,304 |
Interim consolidated statement of cash flow
For the six months ended 30 June 2010
Until 2009, the Group used indirect method for reporting cash flow from operating activities. Since year 2010, the Group presents cash flows from operating activities using the direct method as changed presentation is more appropriate. For cash flow from investing activities and cash flow from financing activities, direct method was used for both years 2009 and 2010.
| In CZK million | Notes | For the six months ended 30 June 2010 |
For the six months ended 30 June 2009 |
|---|---|---|---|
| Cash from operating activities | |||
| Cash received from operations | 29,476 | 32,044 | |
| Cash paid to suppliers and employees | (17,994) | (19,645) | |
| Dividends received | 3 | – | |
| Net interest and other financial expenses paid | (20) | 82 | |
| Taxes paid | (1,466) | (2,103) | |
| Net cash from operating activities | 9,999 | 10,378 | |
| Cash flow from investing activities | |||
| Proceeds on disposals of property, plant and equipment and intangible assets | 49 | 849 | |
| Payments on investments in property, plant and equipment and intangible assets | (2,980) | (5,094) | |
| Net cash used in investing activities | (2,931) | (4,245) | |
| Cash flow from financing activities | |||
| Dividends paid | 34 | 33 | |
| Proceeds on loans, borrowings and promissory notes | – | 943 | |
| Cancellation of debentures and bonds | – | (5) | |
| Repayments of loans, borrowings and promissory notes | – | (115) | |
| Net cash used in financing activities | 34 | 856 | |
| Effect of foreign exchange rate changes on collections and payments |
2 | (283) | |
| Net increase / (decrease) in cash and cash equivalents during the period | 7,104 | 6,706 | |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD |
1,269 | 7,116 | |
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 6 | 8,373 | 13,822 |
| BALANCE AT THE BEGINNING OF THE PERIOD | 1,269 | 7,116 | |
| Cash on hand and at banks | 1,251 | 6,696 | |
| Other cash equivalents | 18 | 420 | |
| BALANCE AT THE END OF THE PERIOD | 8,373 | 13,822 | |
| Cash on hand and at banks | 8,348 | 13,817 | |
| Other cash equivalents | 25 | 5 | |