Terra Lycos, the Spanish internet service provider has cut its net loss for the first nine months of the year, and has predicted its first ever core profit in the fourth quarter.
For the nine-month period to September 30, it reported a net loss of E137 million ($157.3 million), down 59% from a net loss of E332 million ($381.3 million) in the same period last year.
However, sales during the same period declined 16% to E391 million ($449 million).
The fall partly reflected the termination of a E1 billion ($1.14 billion) advertising contract. Despite the fact that Terra Lycos’s parent, the former Spanish incumbent, Telefonica SA [TEF], stepped in to take over the contract, the ISP still took a E56 million ($64.3m) loss as a result of the change over.
The fall in revenue was partly offset by a 29% reduction in operating expenses, and the growth of its customer basis. At the end of September, Terra had 4.6 million paying customers for its internet access, communications and portal services, an 82% rise from last year. Broadband ADSL customers rose 59% to 543,203.
Terra Lycos is, therefore, financially healthy, mainly due to the lack of debt and its large cash pile. At the end of September, it had E1.62 billion ($1.86 billion) in cash.
In May, Telefonica regained control of Terra Lycos by paying E1.06 billion ($1.21 billion), to raise its stake from 38% to 72%.
Telefonica had floated the ISP back in 1999, but found it was competing with its former ISP division in Spain and in other South American markets.
This article was based on material originally published by ComputerWire.