For Tecnotree, 2017 was a year of consolidation and stabilization. The journey we commenced in 2016 towards transforming the company into a full-fledged product company continued in 2017. We attained greater velocity and are clearly in the right path to reaching our goals.
We delivered successfully our full digital BSS stack and our BSS suite products to many of our customers and renewed contracts towards support and maintenance services for 2018. Even though we did not add new customers, we made complete significant deliveries successfully from our order backlog of prior years to our key customers, and we expect these deliveries to help initiate new orders in 2018.
The overall revenue for 2017 was EUR 55.1 million being 8% less than in 2016. The decrease of USD by more than 15% had a negative impact on the revenue. The revenue in Latin America region amounted to about EUR 22 million, staying at the same level as in 2016. The European region revenue degreased from EUR 2.6 million in 2016 to EUR 1.9 million in 2017. Lower revenue figures were seen in both MEA (from EUR 32 million to EUR 30 million in 2017) and APAC region (from EUR 3 million to EUR 1 million in 2017).
The order backlog showed a positive trend year-on-year and stood at the end of 2017 at EUR 26.2 million compared with EUR 24.9 million a year before.
The company was included in the Magic Quadrant for “Integrated Revenue and Customer Management for CSPs” published by Gartner, and Tecnotree was placed among the Niche Players quadrant.
In 2017, we continued to consolidate our operations across regions, optimized our headcounts and minimized overall costs and other expenses.
We successfully achieved the cost reductions of EUR 5 million, in accordance with our promise given in March of 2017. All these actions along with enhanced cash collections resulted in the company delivering a strong adjusted operating result of EUR 9.8 million compared with the EUR 1.2 million in 2016. While achieving this we at the same time successfully ensured that all delivery commitments to our customers were met and that our overall customer satisfaction remained excellent.
Our liquidity and cash position remained extremely challenging and we did not succeed in realizing the needed financing arrangement.
Focus and outlook in 2018
In 2018, we will focus on profitable growth and realization of financing arrangement.
We continue to emphasize our role as a product company, driving the digital transformation of our customers with our enriched and differentiated BSS product portfolio. We will go to market with improved execution, quality and agility and innovative business models.
We continue with cost optimization and other measures for increased efficiency. We develop our current structures and processes further to minimize currency exchange risks and withholding taxes. We continue with increased focus on ensuring timely collections of receivables by further improving the quality and timeliness of our deliveries.
One of our most important tasks is to realize a financing arrangement so that we can ensure the company’s stable operations and further development.
The company announced on 8 March 2018 that it has entered with Viking Acquisitions Corp. into a transaction agreement, under which Viking undertakes to make a voluntary public cash tender offer to purchase all of the issued and outstanding shares in Tecnotree. The tender offer is subject Viking gaining control of more 90% of shares and voting rights of Tecnotree. According to the preliminary results of the tender offer, Viking had gained a total of approximately 79.0 % of all the shares and votes. The acceptance period was extended and expire on 30 April 2018."
Padma Ravichander, Chief Executive Officer
Cost rationalising shows in result – significant improvement in adjusted operating profitability