December 21, 2017 / 7:27 PM / 6 months ago

UPDATE 1-Norway's Otello says AdColony CEO to step down, warns on unit's sales

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Dec 21 (Reuters) - Otello Corporation says:

* AdColony’s Chief Executive Officer, Will Kassoy. Mr. Kassoy will step down from his position effective immediately

* Lars Boilesen, Otello CEO, will act as interim CEO for AdColony while the company searches for his replacement

* 2017 has been a disappointing year for AdColony, which has been impacted by product delays and poor execution in the midst of a strong and growing mobile advertising market

* Based on the preliminary numbers and developments thus far in Q4, Otello expects AdColony’s revenues to be down between 5 and 10 pct versus Q3

* Despite the challenging year, AdColony remains uniquely positioned to play a key role in the massive mobile advertising market as the largest independent mobile video advertising player

* Otello aims to return AdColony to growth and profitability

* Says mobile advertising market remains strong. AdColony is experiencing increasing gross margins in Q4 compared to Q3

* In addition, the restructuring announced in connection with Otello’s Q3 report has been successful, and we expect to enter 2018 with a cost base 40 pct below where we entered 2017

* The persistent cost focus has lowered AdColony’s break-even run-rate significantly and has set AdColony up for a faster return to profitability

* Otello continues to have a very strong financial position, which was further enhanced by the sale of SurfEasy in November 2017

* In addition, continued strong performance from Bemobi and Skyfire’s turnaround makes us optimistic looking into 2018 Source text for Eikon: Further company coverage: (Reporting by Oslo newsroom)

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