TWT 2Waytraffic

RNS Number:9881C
2waytraffic N.V.
30 August 2007


30 August 2007
 

                  2waytraffic ("2waytraffic" or the "Company")                  
                                 Trading update                                 

 

2waytraffic, the AIM listed interactive entertainment content provider, today
issues the following trading update for the current year ending 31 December
2007.

 

Further to our announcement on 25 July 2007, while the Board continues to see
growth within the underlying business, certain issues have occurred which the
Board now believe will prevent the Company meeting current market expectations.
The Directors believe that normalised EBITDA* for the full year will be
approximately Euro30m.

 

As previously highlighted, regulatory changes in Belgium at the beginning of the
year have heavily reduced call volumes and revenues from that region. Under the
terms of the agreement with the Company's broadcast partner in Belgium,
2waytraffic guaranteed a minimum level of revenue share to the broadcast partner
at the beginning of 2006. This agreement was reached prior to the regulatory
changes in the region and the Directors have since been discussing revising the
agreement to take account of the new operating environment. The Company has now
received notification from their broadcast partner that while it is prepared to
discuss the levels of minimum guarantee going forward, it is now not prepared to
revise the terms of the original agreement as expected. Discussions with the
broadcast partner with regard to future arrangements are expected to take place
in the coming weeks.

 

The second one-off issue relates to a localised technical issue in the mobile
content division with one of the Company's American network partners where some
customers were being billed incorrectly during a 6 week period spanning the
months of July and August. Whilst this technical issue has been resolved
satisfactorily, the carrier in the United States has now requested that all the
affected customers are asked to re-subscribe for its services. This will have a
one-off impact in the current year as this part of the subscriber base is
re-built.

 

Commenting on today's trading update, Kees Abrahams, Chief Executive Officer
said: "We are naturally disappointed that the discussions with our broadcast
partner in Belgium have led to this unexpected outcome. The issue in the USA has
been quickly and effectively dealt with to our, and more importantly, the
customers and the carriers satisfaction. Whilst these isolated incidents will
impact the Company in the current financial year, the group's underlying
business remains robust and the Company continues to gain momentum in exploiting
and developing entertainment content across multiple platforms."

 

Notes:

*EBITDA is earnings before interest, tax, depreciation and amortisation.

 

 

Enquiries:

2waytraffic
Kees Abrahams/Jonni Abbenhuis  +31 (0) 35 750 80 00

 

Investec Investment Banking    +44 (0) 20 7597 5117
Andrew Craig / Ben Poynter

 

Financial Dynamics             +44 (0) 20 7831 3113
Charles Palmer / Nicola Biles

 

 

 



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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