| EDB reports new growth and stronger earnings for Q3 |
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(Oslo, 21 October 2004) EDB Business Partner reported operating revenues for the third quarter of 2004 of NOK 1,018 million and operating profit (EBITA) of NOK 100 million. After adjusting for divested and discontinued businesses, operating revenues were up by 11% from the same quarter last year. Operating profit was 23% higher than the same quarter of last year once non-recurring provisions made in 2003 are taken into account. EDB reports an operating margin (EBITA margin) of 9.9% for the third quarter of 2004, as compared to a reported -4.5% for the same quarter in 2003. "The third quarter results show that we have kept costs under control while integrating new activities into EDB. The results also show that we can generate good profitability at the same time as delivering competitive terms for major contracts in a very demanding market", comments CEO Endre Rangnes. "We have used the third quarter to position EDB for growth in new markets and sectors, not least in Sweden and in the distribution, industry and public sectors in Norway", adds Endre Rangnes.
Operating revenues of NOK 1,018 million for the third quarter represent an increase from NOK 1,008 million in the same quarter of 2003 before adjusting for businesses divested and discontinued. These activities contributed revenues of NOK 93 million in the third quarter of 2003, which implies an adjusted growth of 11 %.
Operating profit of NOK 100 million was up 23% on the same quarter in 2003 after excluding non-recurring costs of NOK 126 million booked in the third quarter of 2003. Operating margin (EBITA) was 9.9% for the quarter as compared to -4.5% in the third quarter of 2003, or 8.0% after adjusting for non-recurring costs.
The group's cash flow from operations again improved, up from NOK 112 million for the third quarter of 2003 to NOK 189 million. Liquidity reserves, including undrawn credit facilities, exceeded NOK 1 billion at the end of the third quarter. Strong operational cash flow and receipt of payment for the divestment of part of EDB Telecom's business to Accenture resulted in a reduction in net interest-bearing liabilities by NOK 314 million from the close of the second quarter to NOK 178 million at 30 September 2004.
The group's two largest business areas, IT Operations and Bank & Finance, both reported good results.
IT Operations reported third quarter operating revenues of NOK 805 million, around 13% higher than for the same period last year. The business area's operating profit (EBITA) was 26% higher than the same quarter of 2003 at NOK 82 million, representing an improvement in margin from 9.2% in the third quarter of 2003 to 10.2%.
Bank & Finance reported operating revenues for the quarter of NOK 187 million, up 6 % from the same quarter in 2003. Third quarter operating profit reached NOK 31 million as compared to a loss of NOK 73 million for this quarter last year after non-recurring costs of NOK 89 million. Even after adjusting for this, the third quarter produced a margin almost double the margin of 8.9 % for this quarter in 2003. This was the highest margin reported by Bank & Finance for four years.
The level of activity in the Telecom business area is still affected by the sale of the major part of its business to Accenture. After adjusting for this, the remaining business showed a moderate decline in operating revenues of 8% to NOK 51 million. Adaption to a more limited product range caused a small loss for the quarter. New contracts for both the Mediation and Network Inventory Management System-products are positive signals for a Business Area that will be an integral part of EDB.
"While the first half of the year was dominated by the turn-around process, the third quarter was the start of a period of renewed focus on profitable growth. We are focusing in particular on the Swedish market and on growth opportunities in new sectors and industries. This will help to strengthen the group, and over time these areas will make a significant contribution to both top and bottom line growth", explains Endre Rangnes. "In a period with limited market-activity, we have focused on making EDB more effective and focused. This means that we are now well placed to meet the challenge of stronger growth when it arrives", adds Rangnes.
The parent company reported an operating loss of NOK 12 million for the quarter as compared to a loss of NOK 9 million for the same quarter of 2003. Goodwill amortisation was NOK 41 million, in line with the same quarter of 2003.
Net financial items represented a charge of NOK 8 million as compared to NOK 17 million in the same quarter last year.
The third quarter produced a profit after tax and minority interests of NOK 33 million as compared to a loss of NOK 79 million for the same quarter in 2003. Earnings per share amounted to NOK 0.36 for the quarter as compared to a loss per share of NOK 0.87 for the third quarter of 2003.
More detailed financial information can be found in the attached interim report.
Presentation of 3rd Quarter 2004 can be downloaded from the following link:
3rd Quarter Report 2004, inclusive financial tables can be downloaded from the following link:
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