(Oslo, 18 July 2003) EDB Business Partner reports turnover for the second quarter of NOK 1,110 million, with an operating profit (EBITA) of NOK 61 million. After adjusting for gains on disposals, the quarter's turnover was in line with the second quarter of last year (NOK 1,1090 million). Cost savings helped to produce an improvement of NOK 39 million in operating profit (EBITA) from the same period last year (NOK 22 million).

 

Second quarter profit margin (EBITA) was 5.5% as compared to 2% in the same quarter of 2002. Non-recurring items totalled a net NOK 20 million as compared to NOK 21 million in the same quarter last year. The group therefore also shows an improvement in underlying profitability. Cash from operations was NOK 45 million as compared to NOK 48 million in the same quarter last year. The second quarter produced a post-tax loss of NOK 19 million as compared to a loss of NOK 59 million for same period last year. Net financial items related to shareholdings represented a charge of NOK 22 million as compared to NOK 26 million for the same period last year.

 

"Turnover reflects a relatively flat market for our services. Earnings are gradually improving as the measures implemented begin to have their full effect. However profit margins are not satisfactory, and the group is generating too little cash from operations. This underlines the need to continue working on improving the group's operations", comments Endre Rangnes, Chief Executive Officer.

 

The Computer Operating Services business area played the major role in maintaining the group's turnover. This business area also produced a satisfactory profit margin. The Consultancy Services business area, which was closed with effect from 1 July, was responsible for the largest negative contribution. The Telecommunications business area reported somewhat weaker turnover than in the same quarter last year, but profitability was markedly better. Turnover in the Bank & Finance business area is now stable and profitability shows an improvement, although not yet to a satisfactory level.

 

Operating profit (EBITA) by business area for the second quarter of 2003 relative to the same quarter last year was as follows: Computer Operating Services NOK 61 million (NOK 35 million), Bank & Finance NOK 17 million (NOK 10 million), Telecommunications NOK 18 million (NOK -11 million) and Consultancy Services NOK -10 million (NOK -5 million). The holding company's costs were particularly high in the second quarter at NOK 25 million (NOK 9 million).

 

A major re-focusing of the Bank & Finance business area has been announced, including a new organisational structure, a new delivery model and changes to strategy. In addition a program of work has been launched to develop better permanent quality assurance systems. The new organisational structure is complete and work will continue through the summer on the details of the re-focusing exercise that will be launched in the third quarter. This will also include an in-depth review of the business area.

 

"In addition to tackling the problem of weak profitability, the group faces very clear challenges in the areas of customer relations and market orientation. The group as a whole has taken too long to fully recognise these challenges. The Bank & Finance business area will now implement a refocusing process to address these issues. Our strongest cards in this process are our unique expertise in this sector and a product portfolio which is in the main well up to high international standards, as well as a clear willingness to implement changes", adds Endre Rangnes.

 

 

The full interim accounts for the second quarter can be found in the report issued as an appendix to this announcement.

 

Endre Rangnes, CEO, Tel: +47 23 32 45 01