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Tele Atlas Signs Deals With Nokia, RIM, and HP but Bleeds Red

Posted on: Tuesday, 31 October 2006, 06:00 CST

Tele Atlas NV has posted an 81% increase in its third quarter net loss, despite the increasing popularity of satellite navigation systems. The digital mapping provider was hit with charges related to the expansion of its Chinese activities.

For the third quarter ending September 30, the Belgium-based company posted an increased net loss of 17.8m euros ($22.6m) from a net loss of 9.8m euros ($12.4m) in the year-ago quarter. Sales meanwhile rose 29% to 65m euros ($82m) from 50.5m euros ($64m) a year earlier.

The company blamed the increased net loss on its Chinese activities, where it incurred a restructuring charge of 10.1m euros ($12.8m) when it combined its Chinese joint venture partner (Shanghai Changxiang Computer Co Ltd) with its new data partner (Changdi YouHao Mapping Technologies Co Ltd), and acquired complete ownership of the Chinese operation (NaviAtlas).

"These results confirm that Tele Atlas' approach to deliver digital maps to multiple markets, including the wireless, personal navigation, internet, automotive and enterprise/public sector segments is creating a solid foundation for the company's growth," said CEO Alain De Taeye.

This optimistic assessment of the company's financial healthy was given after Tele Atlas signed new agreements with Nokia Corp to supply maps for the Nokia N95 handset, and with Research in Motion for the BlackBerry Pearl. The company also signed a contract with HP in the PDA/personal navigation segment.

"The digital map that was once car centric is becoming user centric, and is now easily accessible to millions of personal navigation system and mobile phone users around the world," said De Taeye.

Tele Atlas provides digital maps and location-based content to companies such as TomTom NV, Mio, Navman, and ViaMichelin. However, its belief that sat nav systems are moving out of the car to become "user centric" remains to be seen.

TomTom last week saw profits rise 24% on sales up 41%, on the back of strong demand for its portable navigation devices. However, sales of TomTom's smartphone/PDA solutions had virtually collapsed with sales down 85%, suggesting that users prefer purpose-build navigation devices rather than using their mobile phone for their navigating needs.

Source: Datamonitor

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