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ATM returns record results for 2013

ATM S.A. has published its financial report for 2013. Its results for the past year stand at record levels all of the key items of income have improved over 2012, which itself was a very good year for the company. Sales totalled PLN 131m (excluding revenue from the OST 112 contract), the margin on sales was PLN 77m, the operating profit PLN 26m, and EBITDA PLN 46m.

Warsaw, 20 March 2014 The rate of growth in the above-listed operating figures was between 3% and 5%, which together with a significant lowering of financial costs brought a very marked improvement in the pre-tax profit (by 33% year-on-year, to reach PLN 20.3m) and in the net profit from continuing operations (by 43% year-on-year, to reach PLN 19.8m). The company maintained its high level of profitability (a margin on sales of approximately 60%) partly thanks to its discipline in controlling fixed costs. Subscription revenue as a proportion of ATMs total revenue was maintained at a high level in 2013 (around 88%), which provides an assurance of the stability of cash flows in future periods.

Last year, as previously, the fastest growing part of the companys business was data center services (colocation and hosting). This enabled the company to consolidate its position as leader in the Polish colocation market. Revenue from these services rose by more than 17% year-on-year, reaching a record PLN 58m, of which as much as 97% consisted of periodic (subscription) payments. Data center services accounted for more than 60% of ATMs total margin for the whole of 2013, which gives a clear indication of the increasing importance of this category for the companys operations.

We are pleased to see that our chosen strategy of intense investment in the colocation part of the business is bringing results, and we are one of the main beneficiaries of the dynamic growth in this promising branch of the Polish data communications market. We are also looking to the future with optimism, which is justified in view of, among other things, the number of negotiations and bidding procedures currently under way in relation to ATMs colocation services, which is well above the levels observed by the company in the past, said Tadeusz Czichon, Vice-President of ATM S.A.

In discussing the results achieved on data center services, mention should also be made of a very rapidly growing part of that sector the leasing of dedicated servers. Over 2013 revenue on that account rose by more than 190%, from PLN 1.3m to 3.8m. This growth reflects the increasing trend among Polish firms towards outsourcing of IT infrastructure. The ATMAN EcoServer service enables customers to make use of servers without the need to invest in hardware, and is paid for on a subscription basis.

To ensure a sufficient supply of colocation space in the face of dynamically growing demand, ATM is carrying out an ambitious investment programme, under which another new data center will be rolled out in the middle of this year the F4 building at the ATMAN Data Center campus in Warsaw. Further systematic investments are also being carried out under the ATM Innovation Center project, including the F5 data center building (expected to open in 2015) and an office building.

The second important category of ATM services data transmission and fiber-optic services generated sales of approximately PLN 49.5m in 2013, which represents a year-on-year increase of almost 4%. Note should be taken of the very good result obtained in the fourth quarter of last year, with revenue of PLN 13.9m, largely thanks to a large contract for the sale of connections signed with one of the telecommunications operators.

In Internet access services, in line with market trends, ATM continues to record falls in sales. Over the whole of 2013 its revenue from such services totalled PLN 18.3m (a 14% decrease year on year). It should be noted, however, that the rate of decrease is slowing quarter by quarter (a 10.5% drop for the third over the second quarter changed to just a 0.5% drop for the fourth over the third quarter of 2013). This is a result of, among other things, a continuing increase in interest in ATMs services among smaller firms, thanks to which the company is able more and more effectively to counteract the negative effect of the fall in unit prices and in revenue from larger customers. Over 2013 the company recorded an 18% increase in the number of customers for its Internet access services.

Sales of data transmission and Internet access services to smaller firms are possible thanks to consistent expansion of the range of the companys fiber-optic network. The increasing reach of the network is reflected in the growing number of business locations chiefly office buildings that are connected to the network, in line with the companys strategy announced last year. In 2013 the number of business locations in ATMs fiber-optic network grew by more than 40%. In the longer term this trend can be expected to be maintained, enabling us to generate a greater and greater amount of revenue from business customers, says Maciej Krzyżanowski, CEO of ATM S.A.

The companys results were negatively affected by the closure and final settlement of the discontinued operations relating to mobile payment services. These were offered by the ATM group from 2006 to 2013 through the company mPay S.A., and the loss from the discontinued operations did not affect current financial flows. Following the sale of the last subsidiary from the former ATM group, from 2014 the issuer will publish only single-company financial statements.

ATM S.A. is a Polish public company (WSE: ATM) providing innovative ICT solutions for business since 1991. Under the brands of ATMAN and Thinx Poland the company offers telecommunications services based on its own fiber networks and three data centers in Poland, with over 8,500 sq m (ca. 91,500 sq ft) of state-of-the-art colocation space. Key elements of ATM's offer include: colocation and hosting, broadband data transmission and Internet access. In particular, carriers, Internet portals, traditional media and financial institutions may be found among the receivers of ATM services. The company is the only Polish operator present in four of Europe's largest interconnect nodes: AMS-IX Amster­­­dam, DE-CIX Frankfurt, LINX London and MSK-IX Moscow. More information at www.atman.eu and www.thinx.pl/en.

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