Proha Plc Stock Exchange Bulletin August 10, 2006 at 9. 05 a.m.
PROHA PLC FINANCIAL STATEMENTS (IFRS) JANUARY 1, - JUNE 30, 2006
Period January - June 2006:
- The Proha Group net sales for the period January 1, - June 30, 2006 were
EUR 35.0 million (EUR 32.0 million in corresponding period 2005).
- Net sales for the continuing operations was EUR 17.8 (13.1) million.
- The Group's operating result was EUR 11.1 (-1.3) million.
- The Group’s operating result includes EUR 14.5 million gain on disposal from
the divestment of Artemis.
- Operating result for the continuing operations was EUR -0.8 (-0.5) million.
- The operating result before non-recurring items for the continuing
operations was EUR -0.3 (-0.5) million
- The Group's cash flow from operations was EUR -0.6 (-1.8) million.
Period April - June 2006:
- The Proha Group net sales were EUR 18.7 million (EUR 16.6 million for the
second quarter of 2005).
- Net sales for the continuing operations were EUR 10.3 (6.7) million.
- The Group’s operating result was EUR 12.7 (-0.6) million.
- The Group’s operating result includes EUR 14.5 million gain on disposal from
the divestment of Artemis.
- Operating result for the continuing operations was EUR -0.9 (-0.2) million.
- The operating result before non-recurring items for the continuing
operations was EUR -0.4 (-0.2) million
- The sale of sub-group Artemis was closed on June 30, 2006. The sale has
material positive impact on Proha’s result and financial position.
- The sale price of EUR 10 million was paid in July 2006. The agreement of
Artemis divestment does not include non-competition clauses. The future
development of Artemis does not cause any obligations for Proha.
- The income statement of Artemis for the second half of 2006 will no longer
be consolidated in Proha Group, which will have a significant impact on
the Group’s net sales for the remaining 2006.
- Following the divestment Proha’s financial position is strengthened giving
a strong basis for further business development.
- Proha’s subsidiary Dovre International AS acquired net assets including the
business operations and international subsidiaries of Norwegian Fabcon
Management AS with the closing date of May 1, 2006. The purchase enhances
growth of both Proha and its subsidiary Dovre and strengthens their
position in the fast growing oil and gas industry markets.
- During the second half of 2006 Proha’s net sales mainly will consist of
oil and gas sector project management business. The demand for the sector
is anticipated to continue strong also for the second half of 2006.
KEY RATIOS OF THE PROHA GROUP
4-6 4-6 1-6 1-6 1-12
(EUR million) 2006 2005 Change 2006 2005 Change 2005
% %
Net sales 18.7 16.6 12.7% 35.0 32.0 9.2% 64.5
Operating result 12.7 -0.6 2183.3% 11.1 -1.3 975.0% -3.6
% of net sales 68.1% -3.7% 31.8% -4.0% -5.5%
Result
before taxes 13.3 -0.9 1511.0% 11.6 -2.0 684.6% -5.0
Result
for the period 12.9 -1.2 1175.7% 10.8 -2.5 539.5% -6.0
Return on
equity% 575.1% -59.9% 218.8% -57.9% -86.0%
Return on
investment% 317.1% -4.0% 133.8% -3.8% -13.4%
Cash and cash
equivalents 2.7 6.5 -58.1% 2.7 6.5 -58.1% 7.3
Debt-equity
ratio% 27.4% 25.0% 27.4% 25.0% 47.0%
Equity-ratio% 49.2% 18.6% 49.2% 18.6% 11.0%
Gross investments 2.0 0.1 1946.5% 2.1 0.3 603.6% 0.3
% of net sales 11.0% 0.7% 6.0% 0.8% 0.4%
R&D expenses 1.6 1.7 -6.6% 3.4 3.4 0.1% 7.3
% of net sales 8.5% 10.4% 9.7% 10.5% 11.3%
Personnel average
for the period 571 527 8.3% 549 529 3.8% 525
Personnel at the
end of the period 312 527 -40.7% 312 527 -40.7% 531
Basic earnings
per share, EUR 0.211 -0.020 1157.4% 0.177 -0.040 539.5% -0.098
Equity per
share, EUR 0.25 0.12 104.3% 0.25 0.12 104.3% 0.07
Diluted earnings
per share, EUR 0.211 -0.020 1156.6% 0.177 -0.040 540.2% -0.098
Cash flows from
operating
activities -1.7 -2.6 35.6 -0.6 -1.8 206.8 0.2
IFRS REPORTING
The Proha Plc’s interim report follows the same accounting policies and methods
of computation as in the financial statement for 2005.
The divestment of Artemis was closed on June 30, 2006. Artemis sub-group that
has been a separate reporting segment and a group of cash flow generating units
has been classified as discontinued operation according to IFRS 5 standard.
According to IFRS 5 standard no depreciations have been recorded on the fixed
assets of Artemis sub-group during the period under review.
CHANGES IN GROUP STRUCTURE
The divestment of Artemis, closed on June 30, 2006, has a material impact on the
extend of the Group operations and on the group structure. After the closing of
the sale Proha continues to focus on the growth and international expansion of
the project management business in the oil and gas sector as well as on
development and sales of Proha's other project management software.
Proha's business is composed of project management services and software that
are offered and sold to customers worldwide. Approximately 85% of Proha's
business comes from oil and gas sector and approximately 15% from other project
management.
The business of the continuing operations of Proha is formed by Dovre
International AS with its subsidiaries and Safran Software Solutions AS and
Datamar Oy.
Dovre International AS is a Norwegian based company focusing on international
project management services in oil and gas sector. Dovre has subsidiaries in the
USA and Great Britain already prior the acquisition. During the period under
review, Dovre acquired the business of Fabcon and its international
subsidiaries. Fabcon is an internationally operating oil and gas industry
project management consultant established in 1977 with 70 employees. Fabcon has
fully owned subsidiaries in Canada, United States, France, Singapore and Nigeria
as well as the subsidiary in Great Britain where Fabcon has control with 48%
ownership. In addition, Fabcon has branch offices in Russia and South Korea.
Safran Software Solutions AS is a Norwegian company specializing in project
management software for the oil and gas sector.
Finnish Datamar Oy offers tailored software solutions in client/server and
Internet environments.
PROHA DIVESTED ITS OWNERSHIP AT ARTEMIS
In March 2006 the Boards of Directors of Proha Plc and its sub-group Artemis
International Solutions Corporation (Artemis) accepted the purchase offer for
Artemis' entire share capital made by the subsidiary of US based software
company Trilogy, Inc. On June 30, 2006 the shareholders meeting of Artemis
approved the sale of Artemis to Trilogy and the sale was closed immediately
after the shareholders meeting. Proha has issued a stock exchange bulletins on
the transaction on March 13, 2006, April 3, 2006, June 9, 2006 and July 3, 2006.
Proha got approximately USD 12.7 million (approx. EUR 10.0 million) for its
53.3% ownership in Artemis and the amount was paid in cash in July 2006.
The Group’s result for the period January 1, - June 30, 2006 includes approx.
EUR 14.5 million gain on disposal for the sale of Artemis shares. Due to the
fixed sale price, Artemis’ result for the period January 1, - June 30, 2006
increased the gain on disposal by approximately EUR 3.1 million, because the
items of Artemis income statement were consolidated in the Proha Group’s income
statement until the closing date June 30, 2006. Thus Artemis’ result for the
period under review impacted only composition of Proha Group’s result. It did
not have an impact on the total amount of the Group’s result for the period
under review.
PROHA ACQUIRED BUSINESS OPERATIONS OF FABCON
Dovre Fabcon AS, founded by Proha’s Norwegian subsidiary Dovre International AS,
purchased the business operations and overseas subsidiaries of Fabcon Management
AS (Fabcon) during the period under review. Fabcon is consolidated in Proha’s
group financial statements beginning May 1, 2006.
The cost of Fabcon acquisition is approximately NOK 24.8 million (approx. EUR
3.2 million) according to the estimate at the end of the period under review. In
addition to the acquisition price of NOK 24.4 million (approx. EUR 3.1 million)
the cost of acquisition includes costs directly attributable to the acquisition
for approx. NOK 0.4 million (approx. EUR 0.1 million).
The purchase price will be paid in two installments. The first installment of
approximately NOK 16.3 million (approx. EUR 2.1 million) was paid in June 2006.
The final purchase price is dependent on Fabcon's result for 2006 and some other
customary terms and conditions. The rest of the purchase price will be at the
most NOK 8.0 million (approx. EUR 1.0 million) and will be paid on December 31,
2007 at the latest. The estimated second installment of EUR 1.0 million of the
purchase price is included in the accrued liabilities of the current liabilities
in the Group balance sheet on June 30, 2006.
Of the cost of acquisition of approximately EUR 0.5 million was allocated to
customer agreements and customer relations. Consequently approximately EUR 0.2
million was recognized as deferred tax liability. The fair value of the acquired
net assets was approximately EUR 1.8 million. The goodwill of approximately EUR
1.4 million was due to expected synergies and profitability of the acquired
business. For the period May 1, - June 30, 2006 Fabcon’s share of the Group
result was EUR 0.1 million. The assets and liabilities recognized of the
acquiree are presented in the table of this bulletin.
Preliminarily the net sales of Fabcon are anticipated to be approximately EUR 11
million in 2006, of which eight months will be included in net sales of Proha.
Over 90% of the net sales are generated from international customers outside
Norway.
The purchase enhances growth of both Proha and its subsidiary Dovre and
strengthens their position in the fast growing markets. Proha has issued stock
exchange bulletins on the acquisition on April 4, 2006 and May 12, 2006.
BUSINESS PERFORMANCE
The businesses of the Norwegian subsidiaries form a reporting business segment.
The business of is composed of project management services and software that are
offered and sold to customers worldwide. The business segment includes Dovre
International AS, Dovre Fabcon AS with its international subsidiaries and Safran
Software Solutions AS.
Dovre and Fabcon accounted for approximately 96.2% (96.3%) and Safran
3.8% (3.7%) of the net sales of the Norwegian subsidiaries.
During the first six months of 2006 approximately 85% of the business of the
Norwegian subsidiaries came from oil and gas sector and approximately 15% from
other project management sales. The business of Fabcon companies acquired in the
period under review is fully focused on oil and gas sector.
During period January 1, - June 30, 2006 the demand in the oil and gas sector
has continued strong. The level of investments in the oil and gas industry
remains high.The positive mood of the markets is anticipated to continue.
In developing its business operations Dovre focuses in maintaining the leading
position in the Norwegian markets, improving profitability, taking advantage of
the synergies created by the Fabcon acquisition and in continuing the growth in
the international markets. Dovre is planning to add personnel to meet the
increasing demand in the oil and gas industry. In the Norwegian markets in
particular the challenge is to recruit professionals to meet the demand. The
purchase of Fabcon’s business operations increases Dovre’s international
presence considerably. Significant customers of both Dovre and Fabcon have
positively received the purchase of Fabcon.
During the period under review Dovre has made long term frame agreements with
significant customers to replace existing agreements.
Safran focuses on sales of software for oil and gas sector and on software
support services.
The Mobile Business Unit of Proha that started in the second half of 2005
develops and sells automatic workflow management software and provides the
integration services for the software.
NET SALES
Distribution of net sales by revenue type:
(EUR million, % of net sales)
4-6 4-6 1-6 1-6 1-12
2006 % 2005 % 2006 % 2005 % 2005 %
One time
license
revenue 1,4 7,7 2,6 15,9 2,7 7,7 4,7 14,8 9,7 15,0
Recurring
license
revenue 3,5 19,0 3,7 22,6 7,1 20,2 7,2 22,6 14,3 22,2
Services 13,6 73,2 10,2 61,6 25,2 72,1 20,0 62,6 40,5 62,8
Total 18,7 100,0 16,6 100,0 35,0 100,0 32,0 100,0 64,5 100,0
In the first six months of 2006 the net sales continued to constitute mainly of
services with EUR 25.2 (20.0) million or 72.1% (62.6%) of the net sales.
The service revenue for the second quarter of 2006 was EUR 13.6 (10.2)
million accounting for 73.2% (61.6%) of the net sales.
The license sales amounted to EUR 9.8 (12.0) million, accounting for 27.9%
(37.4%) of the net sales. The share of one-time licenses was EUR 2.7 (4.7)
million and that of recurring licenses EUR 7.1 (7.2) million.
In the second quarter of 2006 the license sales amounted to EUR 5.0 (6.4)
million, accounting for 26.8% (38.4%) of the net sales. The share of one-time
licenses was EUR 1.4 (2.6) million and that of recurring licenses EUR 3.5 (3.7)
million.
Distribution of net sales by segment:
4-6 4-6 Change 1-6 1-6 Change 1-12
(EUR million) 2006 2005 % 2006 2005 % 2005
Norwegian
subsdiaries 10,0 6,5 53,6 17,2 12,7 35,4 25,8
Discontinued
operations 8,4 9,8 -15,1 17,2 19,0 -9,3 38,1
Unallocated items 0,3 0,2 54,5 0,6 0,4 58,8 0,9
Inter-segment
net sales 0,0 0,0 -249,5 -0,1 -0,1 -18,0 -0,2
Group total 18,7 16,6 12,7 35,0 32,0 9,2 64,5
Distribution of net sales by country:
4-6 4-6 1-6 1-6 1-12
(EUR million) 2006 2005 2006 2005 2005
Canada 1,1 1,1
Great Britain 1,4 1,3 2,8 2,7 5,9
Italy 1,0 1,7 2,2 3,1 5,8
Japan 1,5 1,3 3,0 2,3 4,9
Norway 7,3 5,8 13,8 11,2 22,9
France 1,3 1,7 2,7 3,5 6,7
Germany 0,4 0,5 0,8 0,8 1,8
Finland 1,3 1,5 2,6 2,8 5,2
United States 3,0 2,5 5,4 4,9 10,3
Others 0,4 0,3 0,6 0,6 0,9
Net sales
between countries 0,0 0,0 0,0 0,0 -0,1
Total 18,7 16,6 35,0 32,0 64,5
Distribution of net sales by country:
4-6 4-6 1-6 1-6 1-12
(% of net sales) 2006 2005 2006 2005 2005
Canada 5,8 % 0,0 % 3,1 % 0,0 % 0,0 %
Great Britain 7,5 % 8,0 % 7,9 % 8,5 % 9,1 %
Italy 5,5 % 10,0 % 6,4 % 9,8 % 9,0 %
Japan 8,0 % 7,6 % 8,5 % 7,1 % 7,6 %
Norway 39,2 % 34,9 % 39,5 % 35,1 % 35,6 %
France 7,0 % 10,5 % 7,7 % 11,0 % 10,5 %
Germany 2,0 % 2,7 % 2,4 % 2,6 % 2,9 %
Finland 7,0 % 9,1 % 7,6 % 8,7 % 8,1 %
United States 16,0 % 15,3 % 15,4 % 15,3 % 15,9 %
Others 2,0 % 1,8 % 1,6 % 1,9 % 1,5 %
Net sales between
countries 0,1 % 0,0 % 0,0 % -0,1 % -0,1 %
Total 100,0 % 100,0 % 100,0 % 100,0 % 100,0 %
Continuing operations
The net sales of the continuing operations were EUR 17.8 (13.1) million in the
period January 1, - June 30, 2006. The net sales of the Norwegian subsidiaries
totaled EUR 17.2 (12.7) million and accounted for 49.2% (39.7%) of the Group's
net sales and 96.7% (97.3%) of the net sales of continuing operations. The net
sales of Norwegian subsidiaries grew by 35.4% compared to the corresponding
period in 2005.
The net sales of the continuing operations were EUR 10.3 (6.7) million in the
second quarter of 2006. The net sales of the Norwegian subsidiaries totaled EUR
10.0 (6.5) million and accounted for 53.6% (39.3%) of the Group's net sales. The
net sales of Norwegian subsidiaries grew by 53.6% compared to the corresponding
period in 2005.
Discontinued operations
The net sales of the discontinued operations totaled EUR 17.2 (19.0) million and
accounted for 49.2% (59.2%) in the period January 1, - June 30, 2006. The net
sales of the discontinued operations declined by 9.3% compared to the
corresponding period in 2005.
In the second quarter of 2006 the net sales of the discontinuing operations were
EUR 8.4 (9.8) million and accounted for 44.8% (59.4%) of the Group's net sales.
The net sales of the discontinued operations declined by 15.1% compared to the
corresponding period in 2005.
PROFITABILITY
In the period January 1, - June 30, 2006 Proha Group's operating result was EUR
11.1 (-1.3) million. The Group’s operating result for the period under review
is composed of EUR 14.5 million in gain of disposal of Artemis, EUR -3.0
million of Artemis operating result and EUR -0.3 million of the operating
result of the continuing operations.
The Group’s operating result for the second quarter was
EUR 12.7 (-0.6) million. The Group’s operating result for the second quarter
of 2006 is composed of EUR 14.5 million in gain of disposal of Artemis,
EUR -1.4 million of Artemis operating result and EUR -0.4 million of the
operating result of the continuing operations.
Distribution of operating result by segment:
4-6 4-6 Change 1-6 1-6 Change 1-12
(EUR million) 2006 2005 % 2006 2005 % 2005
Norwegian
subsidiaries 0,2 0,3 -20,6 0,8 0,6 44,9 1,0
Discontinued
operations 13,5 -0,4 3936,9 11,8 -0,8 1574,7 -2,6
Unallocated
items -1,0 -0,5 -94,9 -1,4 -0,9 -46,2 -1,8
Inter-segment
operating result 0,0 -0,1 29,4 -0,1 -0,1 5,0 -0,2
Group total 12,7 -0,6 2183,3 11,1 -1,3 975,0 -3,6
Continuing operations
The operating result for the continuing operations was EUR -0.8 (-0.5) million
for the period January 1, - June 30, 2006. The operating profit of the Norwegian
subsidiaries was EUR 0.7 (0.5) million.
In the second quarter of 2006 the operating result for the continuing operations
was EUR -0.9 (-0.2) million. The operating profit of the Norwegian subsidiaries
was EUR 0.2 (0.3) million.
In both the period January 1, - June 30, 2006 and the second quarter of 2006 the
operating result for the continuing operations include approx. EUR 0.5 million
of loss on disposal recognized by the parent company for its divestment of
Artemis shares on the second quarter.
During the period January 1, - June 30, 2006 the operating result for the
continuing operations excluding non-recurring items was EUR -0.3 (-0.5) million.
In the second quarter of 2006 the operating result for the continuing
operations excluding non-recurring items was EUR -0.4 (-0.2) million.
The Group's goodwill is not amortized but tested for impairment under IAS 36. No
indications of impairment of assets exist.
Discontinued operations
In the period January 1, - June 30, 2006 the operating result for the
discontinued operations was approx. EUR 12.0 (-0.8) million. In the second
quarter of 2006 the operating result for the discontinued operations was EUR
13.6 (-0.4) million.
In the period January 1, - June 30, 2006 and the second quarter of 2006 the
operating result for the discontinued operations include a gain on disposal of
EUR 15.0 million for the divestment of Artemis.
In the period January 1, - June 30, 2006 the operating loss of Artemis excluding
the gain on disposal was EUR 3.0 million. In the second quarter of 2006 the
operating loss of Artemis without the gain on disposal was EUR 1.4 million.
Proha Group
In the period January 1, - June 30, 2006 the result before tax for Proha Group
was EUR 11.6 (-2.0) million.
For the period January 1, - June 30, 2006 the result for Proha Group was
EUR 10.8 (2.5) million. The Group’s result for the period under review is
composed of EUR 14.5 million in gain of disposal of Artemis, EUR -3.1 million
of Artemis result and EUR -0.7 million of the result of the continuing
operations.
In the period January 1, - June 30, 2006 the result for the continuing
operations was EUR -1.2 (-0.7) million. In the period January 1, - June 30, 2006
the result without non-recurring items for the continuing operations was EUR -
0.7 (-0.7) million.
Earnings per share amounted to EUR 0.177 (-0.040). For the continuing operations
the earnings per share were EUR -0.020 (-0.011). For the discontinued operations
the earnings per share were EUR 0.197 (-0.030).
Return on investment (ROI) was 133.8% (-3.8%).
CASH FLOW, FINANCING AND INVESTMENTS
The balance sheet total on June 30, 2006 was EUR 31.6 (42.9) million.
At the end of the period under review, the Group cash and cash equivalents
totaled EUR 2.7 (6.5) million. The cash and cash equivalents for the continuing
operations were EUR 2.7 (3.4) million on June 30, 2006. The receivable from
disposal of Artemis was approximately EUR 10.0 million is included in other
receivables of the Group balance sheet on June 30, 2006. The purchase price was
paid in July, which consequently will increase the Group’s cash and cash
equivalents by approx. EUR 10.0 million.
In the period January 1, - June 30, 2006, cash flow from operating activities
was EUR -0.6 (-1.8).million
In the period January 1, - June 30, 2006 the gross investments totaled in EUR
2.1 (0.3) million. The gross investments of the continuing operations were EUR
2.0 (0.3) million and gross investments of the discontinued operations were EUR
0.1 (0.0) million. The gross investments of the continuing operations consist
mainly of acquisition of Fabcon. Approximately EUR 0.5 million of the
acquisition cost of Fabcon was allocated to customer agreements and customer
relations. Approximately EUR 1.4 million was recognized as goodwill.
The total cash flow of investments was EUR -5.7 (3.9) million. EUR 1.9 million
was invested in Fabcon acquisition. The cash flow of investments was increased
by EUR 6.6 million for the proceeds from the disposal of Artemis net of cash
disposed of. The receivable for purchase price of EUR 10.0 million is presented
in the cash flow of investments. Payment for the receivable was received in
July 2006.
Total of EUR 2.1 million new loans were drawn for the financing of Fabcon
acquisition and total of EUR 0.4 million loans were repaid resulting in total
EUR 1.7 (-0.6) million in cash flow of financing activities.
Equity to assets ratio was 49.2% (18.6%) and gearing was 27.4% (25.0%). On June
30, 2006 the interest-bearing liabilities amounted to EUR 7.0 (8.4) million,
accounting for 22.0% (19.6%) of the Group's shareholders' equity and liabilities
total. Of the interest-bearing liabilities, EUR 5.8 (4.4) million were non-
current liabilities and EUR 1.2 (4.0) million current liabilities. The Group's
Quick Ratio was 2.4 (1.1).
STATEMENT ON THE ADEQUACY OF THE COMPANY'S ASSETS
On June 30, 2006 the Group's cash and cash equivalents amounted to EUR 2.8
million. After the end of the period under review, Proha’s cash and cash
equivalents were increased by approximately EUR 10.0 million proceeds from
divestment of Artemis.
According to Proha's management, the liquid assets of the company are sufficient
for Proha to continue as a going concern during the following 12 months.
RESEARCH AND DEVELOPMENT
In the period January 1, - June 30, 2006 the research and development costs for
the strategic products were EUR 3.4 (3.4) million accounting for 9.7% (10.5%) of
the net sales. The research and development costs for the continuing operations
were EUR 0.4 (0.3) million accounting for 2.1% (2.6%) of the net sales of
continuing operations. The research and development costs for the discontinued
operations were EUR 3.0 (3.0) million accounting for 17.6% (16.0%) of the net
sales of the discontinued operations. No research and development costs were
capitalized during the period under review.
The software development costs at Artemis included in the discontinued
operations have been recognized as expense because the control systems at
Artemis do not meet the capitalizing criteria of IAS 38 standards.
PERSONNEL
The Group staff costs amounted to EUR 28.7 (26.1) million, constituting 82.2%
(81.5%) of net sales. The staff costs for the continuing operations were EUR
16.5 (12.5) million accounting for 92.9% (96.0%) of the net sales of the
continuing operations. The staff costs for the discontinuing operations were EUR
12.2 (13.6) million accounting for 71.0% (71.5%) of the net sales of the
discontinuing operations.
On June 30, 2006 the Proha Group employed 312 (527) people worldwide and the
average number of Group personnel was 549 (529). At the end of the period, the
continuing operations employed 312 (216) people.
Distribution of personnel by segment (average):
4-6 4-6 1-6 1-6 1-12
Personnel 2006 2005 Change % 2006 2005 Change % 2005
Norwegian
subsidiaries 255 186 37,0 228 186 22,9 188
Discontinued
operations 283 311 -9,0 288 313 -8,0 308
Others 33 30 8,9 33 30 8,8 29
Total 571 527 8,3 549 529 3,8 525
In the period January 1, - June 30, 2006 total of EUR 0.2 (0.2) million of
options were expensed. Of the expensed options the continuing operations
accounted for EUR 0.04 (0.02) million and the discontinued operations for EUR
0.1 (0.2) million.
DECISIONS OF PROHA ANNUAL GENERAL MEETING OF SHAREHOLDERS
On April 25, 2006 the Annual General Meeting of Proha Plc made the following
decisions:
The Annual General Meeting confirmed the 2005 Financial Statements and
discharged the Board of Directors and CEO from liability. The Annual General
Meeting approved the Board of Directors' proposal that the net loss for the
financial period be transferred to profit/loss brought forward account and no
dividend is paid.
The following five members were elected to the Board of Directors of Proha Plc:
Birger Flaa, Pekka Mäkelä, Pekka Pere, Olof Ödman and Ernst Jilderda as a new
member.
The Annual General Meeting decided that the Chairman of the Board be paid EUR
18,000 and each Board member, at the moment of election not employed by the
Proha Group or by such company which owns more than five percents of Proha's
share capital and who does not exercise dominant influence over such company, to
be paid EUR 10,000 per year as remuneration for board work.
Ernst & Young Oy was elected to continue as the Company's auditor, with Ulla
Nykky, APA, as the auditor in charge.
Issue of option rights
The Annual General Meeting approved the Board of Directors' proposal to issue a
maximum of 1,395,000 option rights to be offered deviating from the
shareholders' pre-emptive subscription right to the Board of Directors and to
the management of the Group companies.
The subscription of the option rights began on April 25, 2006 and ended on May
25, 2006. The subscription price EUR 0.48 is the weighted average price of the
Company share from April 4, 2006 through April 25, 2006. The share subscription
period will commence in steps between years 2007 and 2009 and will end on May
25, 2010. If the options are exercised the share capital of Proha Plc may
increase by a maximum of 1,395,000 shares and EUR 362,700.00. The options issued
constitute a maximum of 2.23% of the Company's shares and voting rights after
the potential share capital increase. The complete terms and conditions were
given in a stock exchange bulletin on April 4, 2006.
Authorization of the Board of Directors to increase the company's share capital
The Annual General Meeting authorized the Board of Directors to increase the
Company's share capital through an issue of new shares, stock options, option
warrants and/or convertible bonds deviating from the shareholders' pre-emptive
subscription rights. Pursuant to this authorization, the aggregate maximum
number of new shares to be issued or offered for subscription pursuant to stock
options, option warrants and/or convertible bonds shall not exceed 12,243,734
shares with an account equivalent value of EUR 0.26 each, and the share capital
of the Company may be increased by no more than EUR 3,183,370.84, which
represents 20% of the currently registered share capital and of the votes that
can be cast in the General Meeting of Shareholders. The authorization was
granted for a period of one year from the date of the Annual General Meeting.
CORPORATE GOVERNANCE
Proha Plc follows the recommendations of the Helsinki Stock Exchange, the
Central Chamber of Commerce and the Confederation of Finnish Industries and
Employers regarding the corporate governance of publicly held companies. Proha
deviates from the recommendation in two respects. 1) Of the five members of the
Proha Board of Directors only two are currently independent of the company and
any of its significant owners. 2) A share-based bonus system may also be applied
to those members of the Board, who do not have an employment relationship with
the company. Proha's corporate governance principles can be found on the
company's website at www.proha.com.
SHARE CAPITAL AND AUTHORIZATIONS TO ISSUE SHARES
Proha Plc has one class of shares. The book value of the shares is EUR 0.26 per
share. Each share entitles the shareholder to one vote. Proha Plc shares are
traded on the NM list of the Helsinki Stock Exchange.
On January 1, 2006, the subscribed capital of Proha Plc was EUR 15,916,854.20
and the number of shares is 61,218,670. No changes were made on the share
capital during the period January 1, - June 30, 2006.
The Board of Directors has the authorization by the Annual General Meeting on
April 25, 2006 to increase the company's share capital. Pursuant to this
authorization, the aggregate maximum number of new shares to be issued shall not
exceed 12,243,734 shares with an account equivalent value of EUR 0.26 each, and
the share capital of the Company may be increased by no more than EUR
3,183,370.84. The authorization is valid for one year following the Annual
General Meeting and the authorization remains fully unused as of now.
In it's meeting on May 30, 2006, Proha Board of Directors approved the
subscriptions of the option issue that is part of Proha Group's incentive and
commitment program and that was decided by the Annual General Meeting on April
25, 2006. In the issue, a total of 1.341.000 Proha Plc stock options were
subscribed, entitling to the subscription of 1.341.000 shares. The stock options
were granted without compensation to the management of the Group companies and
company board. The terms and conditions of the option issue were published in
the Stock Exchange Bulletin on April 4, 2006.
TRADING ON THE HELSINKI STOCK EXCHANGE
Liquidity Providing for Proha Plc's Share
Proha Plc and Swedish Remium AB signed a market making agreement that
follows the guidelines set by the Helsinki Stock Exchange on April 5, 2004.
Market making in accordance with the LP agreement commenced on June 12, 2006.
The agreement will be in force initially for a fixed term of six (6) months and
thereafter until further notice, and the agreement's period of notice is one (1)
month.
According to the agreement Remium AB will quote bids and offers for Proha Plc's
share so that the spread of the bid and offer prices is EUR 0.02. The bids and
offers quoted by the liquidity provider must be for at least 10,000 shares,
which represents 100 trading lots.
The number of registered shareholders of Proha Plc totaled 3,448 on June 30,
2006. During the period January 1 - June 30, 2006, the share price was EUR 0.35
at its lowest and EUR 0.50 at its highest. The closing price on June 30, 2006
was EUR 0.39. Market capitalization was approximately EUR 23.9 million at the
end of the period. The trading volume of the Proha share on the NM list of the
Helsinki Stock Exchange was approximately EUR 8.7 million during the period
under review.
PROSPECTS FOR 2006
The divestment of Artemis will have a significant impact on Proha Group's
operation in 2006. The divestment improved significantly Proha’s result for the
period January 1, - June 30, 2006. After the divestment, Proha Group’s net sales
for the second half of 2006 will be clearly below that of the first half. During
the first half of 2006 Artemis accounted for 49.2% of Proha’s net sales. The
divestment also strengthens Proha’s balance sheet significantly and provides a
strong basis for business development.
The continued positive mood in the oil and gas sector caused by the increased
oil prices have a significant impact on the development of Norwegian
subsidiaries both in Norway and internationally. The investments are
anticipated to keep the demand strong for 2006. The challenge for Proha's
Norwegian subsidiaries is to respond to the demand, which calls for successful
recruiting. Improved profitability and increased share of international
business are additional goals. During the period under review Proha’s
subsidiary Dovre acquired Norwegian Fabcon as part of its strategy of
international expansion. On May 1, 2006 Fabcon’s business was transferred
to Dovre’s subsidiary Dovre Fabcon AS. The aquisition increases Dovre’s
business and global presence considerably. During the second half
of 2006 the target is to take advantage of the synergies created by the
acquisition particularly in the operations outside Norway and thus boost
the international expansion of Dovre group. The net sales of Fabcon are
estimated to exceed EUR 11 million in 2006, of which eight months will be
included in net sales of Proha.
The divestment of Artemis and the acquisition of Fabcon’s business operations
will have a material impact on Proha’s business and strategy. The focus will
shift towards the rapidly developing international oil and gas sector.
PRESS CONFERENCE
Proha Plc will hold a press conference for the media and financial
analysts on August 10, 2006 at 12.00 a.m., at Marskin Sali cabinet at
World Trade Center, address Aleksanterinkatu 17, Helsinki.
More information
PROHA PLC
CEO Pekka Pere, tel +358 (0)20 4362 000
pekka.pere@proha.com
www.proha.com
DISTRIBUTION:
Helsinki Stock Exchange
Major Media
The figures are unaudited.
GROUP INCOME STATEMENT AND BALANCE SHEET JANUARY 1-JUNE 30, 2006
GROUP INCOME STATEMENT
Continuing operations
4-6 4-6 Change 1-6 1-6 Change 1-12
(EUR thousand) 2006 2005 % 2006 2005 % 2005
NET SALES 10 316 6 727 53 17 780 13 057 36 26 421
Other operating
income 34 201 -83 177 208 -15 160
Gain on
disposal
of discontinued
operations -472 -472
Material and
services -123 -8 -126 -13 -853 -97
Employee
benefits
expense -9 825 -6 348 -55 -16 524 -12 528 -32 -24 997
Depreciation and
amortisation -92 -82 -12 -178 -169 -5 -346
Other operating
expenses -753 -694 -9 -1 501 -1 073 -40 -2 529
OPERATING
RESULT -915 -204 -348 -846 -519 -63 -1 388
Financing
income 7 26 -73 14 93 -84 253
Financing
expenses -62 -31 -100 -125 -86 -44 -539
Share of
result
in associates 0 100 0 100 0
RESULT BEFORE
TAX -970 -209 -363 -956 -512 -87 -1 674
Tax on income
from operations -103 -95 -8 -259 -156 -66 -263
RESULT FOR
THE PERIOD -1 073 -305 -252 -1 215 -668 -82 -1 937
ALLOCATION OF
RESULT FOR
THE PERIOD
Result
attributable to
equity holders
of the parent -1 085 -305 -256 -1 230 -659 -87 -1 942
Result
attributable
to minority
interest 12 0 15 -9 257 4
Earnings/share
(undiluted),eur -0,018 -0,005 -256 -0,020 -0,011 -87 -0,032
Earnings/share
(diluted), eur -0,018 -0,005 -256 -0,020 -0,011 -87 -0,032
Discontinued operations
4-6 4-6 Change 1-6 1-6 Change 1-12
(EUR thousand) 2006 2005 % 2006 2005 % 2005
NET SALES 8 357 9 844 -15 17 195 18 957 -9 38 106
Other operating
income 79 423 -81 116 1 153 -90 1 396
Gain on disposal
of discontinued
operations 15 006 15 006
Material and
services -784 -972 19 -1 744 -1 828 5 -3 349
Employee benefits
expense -5 880 -6 764 13 -12 210 -13 555 10 -27 117
Depreciation
and amortisation 0 -46 100 0 -93 100 -325
Other operating
expenses -3 139 -2 891 -9 -6 402 -5 386 -19 -10 883
OPERATING RESULT 13 640 -407 11 961 -752 -2 172
Financing income 709 420 69 1 004 852 18 1 146
Financing
expenses -60 -748 92 -369 -1 579 77 -2 303
Share of result
in associates
RESULT BEFORE
TAX 14 289 -735 12 596 -1 479 952 -3 329
Tax on income
from operations -237 -164 -44 -489 -329 -49 -759
RESULT FOR
THE PERIOD 14 052 -899 12 106 -1 808 770 -4 088
ALLOCATION OF
RESULT FOR
THE PERIOD
Result
attributable to
equity holders
of the parent 14 031 -899 12 070 -1 808 768 -4 088
Result
attributable
to minority
interest 21 0 36 0 0
Earnings/share
(undiluted), eur 0,229 -0,015 1 661 0,197 -0,030 768 -0,067
Earnings/share
(diluted), eur 0,229 -0,015 1 663 0,197 -0,029 769 -0,067
Group Total
4-6 4-6 Change 1-6 1-6 Change 1-12
(EUR thousand) 2006 2005 % 2006 2005 % 2005
NET SALES 18 673 16 571 13 34 974 32 014 9 64 527
Other operating
income 113 624 -82 293 1 361 -78 1 555
Gain on disposal
of discontinued
operations 14 534 14 534
Material and
services -907 -980 7 -1 871 -1 841 -2 -3 447
Employee benefits
expense -15 705 -13 112 -20 -28 734 -26 083 -10 -52 113
Depreciation
and amortisation -92 -128 28 -178 -262 32 -670
Other operating
expenses -3 892 -3 585 -9 -7 903 -6 459 -22 -13 412
OPERATING RESULT 12 725 -611 11 115 -1 270 975 -3 560
Financing income 716 446 61 1 019 945 8 1 399
Financing
expenses -122 -779 84 -494 -1 666 70 -2 841
Share of result
in associates
RESULT BEFORE
TAX 13 319 -944 11 640 -1 991 685 -5 003
Tax on income
from operations -340 -260 -31 -748 -485 -54 -1 022
RESULT FOR
THE PERIOD 12 979 -1 204 10 892 -2 476 540 -6 025
ALLOCATION OF
RESULT FOR
THE PERIOD
Result
attributable to
equity holders
of the parent 12 946 -1 203 10 841 -2 467 539 -6 029
Result
attributable
to minority
interest 33 0 51 -9 643 4
Earnings/share
(undiluted), eur 0,211 -0,020 1 176 0,177 -0,040 539 -0,098
Earnings/share
(diluted), eur 0,211 -0,020 1 177 0,177 -0,040 540 -0,098
GROUP BALANCE SHEET
CONTINUING OPERATIONS
30.6. 30.6. Change 31.12.
(EUR thousand) 2006 2005 % 2005
ASSETS
Non-current assets
Intangible assets 2 133 1 838 16,1 1 708
Goodwill 4 909 3 521 39,4 3 474
Tangible assets 257 259 -0,8 278
Investments in associates 962 962 0,0 962
Long-term
receivables 0 14 -100,0 0
Long-term trade receivables
and other receivables 373 -48 874,3 0
Available-for-sale
investments 39 27 47,1 27
Deferred tax asset 97 72 34,5 97
Non-current assets 8 772 6 645 32,0 6 545
Current assets
Trade receivables
and other receivables 20 100 6 573 205,8 6 172
Tax receivable, income tax 0 363 -100,0 0
Cash and cash equivalents 2 736 3 416 -19,9 3 829
Current assets 22 836 10 352 120,6 10 001
TOTAL 31 608 16 997 86,0 16 546
Minority interest 116 45 157,1 59
Non current liabilities
Deferred tax liability 543 447 21,6 418
Non-current interest
bearing liabilities 5 791 3 422 69,2 3 428
Non-current non-interest
bearing liabilities 0 -37 100,0 0
Liabilities from defined
benefit plan 148 181 -18,6 147
Non-current provisions 0 24 -100,0 0
Non current liabilities 6 482 4 038 60,5 3 992
Current liabilities
Current interest
bearing liabilities 1 167 1 380 -15,4 1 477
Trade payables and
other liabilities 8 051 5 254 53,2 5 400
Tax liability, income tax 473 185 155,3 285
Current provisions 0 0 0,0 21
Current liabilities 9 691 6 819 42,1 7 183
TOTAL 16 289 10 902 -9,1 11 234
DISCONTINUED OPERATIONS *)
30.6. 30.6. Change 31.12.
(EUR thousand) 2006 2005 % 2005
ASSETS
Non-current assets
Intangible assets 96 -100,0 76
Goodwill 7 771 -100,0 7 751
Tangible assets 435 -100,0 352
Investments in associates 5 -100,0 5
Long-term trade receivables
and other receivables 186 -100,0 205
Available-for-sale
investments 55 -100,0 54
Non-current assets 8 547 -100,0 8 442
Current assets
Trade receivables
and other receivables 14 241 -100,0 14 268
Tax receivable, income tax 0 0,0 117
Cash and cash equivalents 3 119 -100,0 3 464
Current assets 17 360 -100,0 17 849
TOTAL 25 907 -100,0 26 291
Minority interest 15 -100,0 14
Non current liabilities
Non-current interest
bearing liabilities 1 022 -100,0 1 228
Non-current non-interest
bearing liabilities 114 -100,0
Liabilities from defined
benefit plan 3 031 -100,0 3 258
Non-current provisions 270 -100,0 77
Non current liabilities 4 437 -100,0 4 564
Current liabilities
Current interest
bearing liabilities 2 602 -100,0 3 261
Trade payables and
other liabilities 17 079 -100,0 18 134
Tax liability, income tax 371 -100,0 1 230
Current liabilities 20 052 -100,0 22 625
TOTAL 24 504 -100,0 27 203
*) Assets and liabilities related to discontinued operations are
classified as held for sale.
GROUP TOTAL
(EUR thousand)
ASSETS 30.6. 30.6. 31.12.
Non-current assets 2006 2005 Change 2005
%
Intangible assets 2 133 1 934 10,3 1 784
Goodwill 4 909 11 292 -56,5 11 225
Tangible assets 257 694 -62,9 629
Investments in associates 962 966 -0,5 966
Long-term
receivables 0 14 -100,0 0
Long-term trade receivables
and other receivables 373 138 171,1 205
Available-for-sale
investments 39 81 -51,6 81
Deferred tax receivable 97 72 34,5 97
Non-current assets 8 772 15 191 -42,3 14 987
Current assets
Trade receivables
and other receivables 20 100 20 813 -3,4 20 439
Tax receivable, income tax 0 363 -100,0 117
Cash and cash equivalents 2 736 6 535 -58,1 7 293
Current assets 22 836 27 712 -17,6 27 850
ASSETS TOTAL 31 608 42 903 -26,3 42 837
SHAREHOLDERS' EQUITY AND
LIABILITIES
Shareholders' equity
Share capital 15 917 15 917 0,0 15 917
Share premium account 4 379 4 807 -8,9 4 808
Fair value reserve
and other reserves 407 461 -11,6 430
Translation differences 268 206 30,1 463
Retained earnings -5 652 -13 892 59,3 -17 219
Equity attributable to equity
holders of the parent 15 319 7 498 104,3 4 400
Minority interest 116 60 93,1 73
Shareholders' equity 15 434 7 558 104,2 4 473
Non current liabilities
Deferred tax liability 543 447 21,6 418
Non-current interest
bearing liabilities 5 791 4 444 30,3 4 656
Non-current non-interest
bearing liabilities 0 78 -100,0 0
Liabilities from defined
benefit plan 148 3 212 -95,4 3 405
Non-current provisions 0 294 -100,0 77
Non current liabilities 6 482 8 475 -23,5 8 556
Current liabilities
Current interest
bearing liabilities 1 167 3 982 -70,7 4 738
Trade payables and
other liabilities 8 051 22 334 -63,9 23 534
Tax liability, income tax 473 556 -15,0 1 515
Current provisions 0 0 0,0 21
Current liabilities 9 691 26 871 -63,9 29 808
TOTAL EQUITY AND LIABILITIES 31 608 42 903 -26,3 42 837
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 1-6/2006
Share Re- Re-
Sha- pre- valu- tai Min-
re mium ation Trans- ned- ority
(EUR thousand) capi- ac- re- lation earn- inte-
tal count serve diff. ings Total rest Total
SHAREHOLDERS'
EQUITY 1.1.2006 15 917 4 808 430 463 -17 219 4 400 73 4 473
Change in
translation
difference 3 49 -9 43 43
Share based
payments 35 35 35
Transfers
between items -26 26
Disposal of
Artemis -429 -244 673 -50 -50
Acquisition of
Fabcon 57 57
NET PROFITS
/LOSSES
RECOGNIZED
DIRECTLY TO
SHAREHOLDERS'
EQUITY -429 -23 -196 726 78 7 85
Result for
the period 10 841 10 841 51 10 892
Dividend
distribution -15 -15
TOTAL PROFITS
AND LOSSES -429 -23 -196 11 567 10 919 43 10 961
SHAREHOLDERS'
EQUITY
30.6.2006 15 917 4 379 407 268 -5 652 15 319 116 15 434
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 1-6/2005
Share Re- Re-
Sha- pre- valu- tai Min-
re mium ation Trans- ned- ority
(EUR thousand) capi- ac- re- lation earn- inte-
tal count serve diff ings Total rest Total
.
SHAREHOLDERS'
EQUITY 1.1.2005 15 917 4 807 467 -545 -11 171 9 475 70 9 545
Change in
translation
difference 20 751 -494 277 8 286
Share based
payments 204 204 204
Transfers
between items -27 27
Other change 8 8 8
NET PROFITS
/LOSSES
RECOGNIZED
DIRECTLY TO
SHAREHOLDERS'
EQUITY -7 751 -255 489 8 498
Result for
the period -2 467 -2 467 -9 -2 476
TOTAL PROFITS
AND LOSSES -7 751 -2 721 -1 977 -1 -1 978
Dividend -9 -9
SHAREHOLDERS'
EQUITY
30.6.2005 15 917 4 807 461 206 -13 892 7 498 60 7 558
GROUP CASH FLOW STATEMENT
1-6 1-6 1-12
(EUR thousand) 2006 2005 2005
Cash flow from operating activities
Operating result 11 115 -1 270 -3 560
Adjustments
Disposal of Artemis -11 256
Other operating income -935 -1 369
Depreciation and amortisation 178 262 670
Employee benefits expense 35 233 995
Other operating expenses 256 253
Other adjustments 35 193 3
Adjustments, total -11 008 9 553
Change in net working capital
Increase (-) / decrease (+)
in current receivables -419 -2 029 16
Increase (+) / decrease (-)
in current liabilities 35 1 818 3 626
Change in provisions -119 594 21
Change in net working capital, total -503 382 3 663
Interest paid -108 -602 -171
Interest received 12 275 434
Other financial expenses paid -418 -1 003 -2 501
Other financial income received 388 807 2 188
Income taxes paid -71 -465 -442
Cash flow from operating activities -593 -1 867 163
Cash flow from investing activities
Investments in tangible and intangible assets -18 -268 -279
Acquisition of subsidiaries net
cash acquired -1 949
Disposal of subsidiaries net
cash acquired 6 579
*) Receivable for disposal of Artemis -10 043
Partial disposals of subsidiaries 548 629
Disposal of associates 626 619
Proceeds (-) and repayments (+) of
loan receivables -265 3 030 186
Dividends received 2 20
Cash flow from investing activities -5 694 3 936 1 173
Cash flow from financing activities
Proceeds from issuance
of share capital 1
Proceeds from short-term loans 2 409 3 563
Repayments of short-term loans -309 -3 568 -3 740
Proceeds from long-term loans 2 082 1 705
Repayments of long-term loans -41 543 -782
Dividends paid -15 -13 -9
Cash flow from financing activities 1 717 -629 738
Change in cash and cash equivalents -4 570 1 440 2 075
Cash and cash equivalents at
beginning of the period 7 293 5 069 5 069
Foreign exchange rate adjustment 14 26 -150
Cash and cash equivalents at
end of the period 2 737 6 535 7 293
*) Payment for the receivable was received in July 2006.
The following assets and liabilities were recognized
of Fabcon acquisition:
Carrying
Fair values amount
upon before
business business
combination combination
Acquisition date May 1, 2006 May 1, 2006
(EUR thousand)
Non-current assets
Intangible assets 544 0
Tangible assets 22 22
Trade and other
receivables 137 137
Available-for-sale
investments 13 13
Current assets
Trade and other
receivables 3 256 3 256
Cash and cash equivalents 213 213
Assets total 4 185 3 641
Minority interest 57 57
Non-current liabilities
Deferred tax liability 152 0
Long term interest
bearing liabilities 323 323
Current liabilities
Trade payables and
other liabilities 1 901 1 901
Liabilities total 2 376 2 224
Net assets 1 752 1 360
Goodwill on acquisition 1 449
Cost of acquisition total 3 200
Amount of acquisition cost paid
in cash and cash equivalents 2 162
Included in accrued liabilities 1 038
Cost of acquisition total 3 200
Amount of acquisition cost paid
in cash and cash equivalents 2 162
- cash and cash equivalents
acquired -213
Impact to cash flow in cash flow
of investments
Jan.1, - June 30, 2006 1 949
The figures of the table are based on exchange rate of
the acquisition date.
COMMITMENTS AND CONTINGENT LIABILITIES
CONTINUING OPERATIONS
30.6. 30.6. 31.12.
(EUR thousand) 2006 2005 2005
COLLARETAL FOR OWN COMMITENTS
Debts secured by corporate
mortgages
Loans from financing
institutions 3 313
The debt is secured by
current assets of Dovre
International AS and Dovre
Fabcon AS and 100% of Dovre
Fabcon AS shares
Debts secured by assets
Loans and checking
account credit lines used 1 433 1 927
Book value of trade receivables
and fixed assets given
as security 5 063 6 880
Debts secured by shares
Loans from financial
institutions 36 60 48
Book value of pledged shares 152 152 152
Future minimum lease payments
under non-cancellable
operating leases:
Not later than one year 252 152 309
Later than one year and not
later than five years 1 009 1 157 875
Total 1 262 1 309 1 185
DISCONTINUED OPERATIONS
30.6. 30.6. 31.12.
(EUR thousand) 2006 2005 2005
COLLARETAL FOR OWN COMMITENTS
Debts secured by corporate
mortgages
Pension loans - 100 86
Corporate mortgages given
as security of the loans 168 168
Debts secured by the assets of
the company
Loans from financial
institutions - 715 3 276
Debts secured by the assets
of Artemis International
Solutions Corporation in USA
and in Great Britain except for
intellectual property rights.
Future minimum lease payments
under non-cancellable
operating leases:
Not later than one year - 1 826 2 249
Later than one year and not
later than five years - 4 319 3 992
Total - 6 145 6 240
GROUP
30.6. 30.6. 31.12.
(EUR thousand) 2006 2005 2005
COLLARETAL FOR OWN COMMITENTS
Debts secured by corporate
mortgages
Pension loans - 100 86
Corporate mortgages given
as security of the loans - 168 168
Debts secured by the assets of
the company
Loans from financial
institutions - 715 3 276
Debts secured by the assets of
Artemis International
Solutions Corporation in USA
and in Great Britain except for
intellectual property rights.
Debts secured by corporate
mortgages
Loans from financing
institutions 3 313
The debt is secured by
current assets of Dovre
International As and Dovre
Fabcon AS and 100% of Dovre
Fabcon AS shares
Debts secured by assets
Loans and checking
account credit lines used 1 433 1 927
Book value of trade receivables
and fixed assets
given as security 5 063 6 880
Debts secured by shares
Loans from financial
institutions 36 60 48
Book value of pledged shares 152 152 152
Future minimum lease payments
under non-cancellable
operating leases:
Not later than one year 252 1 978 2 558
Later than one year and not
later than five years 1 009 5 476 4 867
Total 1 262 7 454 7 425
GROUP QUARTERLY INCOME STATEMENT
Continuing operations
1-3 4-6 1-3 4-6 7-9 10-12
(EUR thousand) 2006 2006 2005 2005 2005 2005
NET SALES 7 464 10 316 6 330 6 727 6 279 7 085
Other operating
income 143 34 8 201 -83 35
Gain on disposal of
discontinued
operations 0 -472
Material and
services -3 -123 -5 -8 -50 -34
Employee
benefits expense -6 699 -9 825 -6 180 -6 348 -5 500 -6 968
Depreciation
and amortisation -86 -92 -87 -82 -85 -91
Other operating
expenses -748 -753 -379 -694 -838 -618
OPERATING RESULT 70 -915 -315 -204 -278 -592
% 0,9 % -8,9 % -5,0 % -3,0 % -4,4 % -8,3 %
Financing income 7 7 67 26 4 156
Financing expenses -63 -62 -56 -31 -48 -405
RESULT BEFORE TAX 15 -970 -303 -209 -322 -840
% 0,2 % -9,4 % -4,8 % -3,1 % -5,1 % -11,9 %
Tax on income from
operations -156 -103 -60 -95 -68 -39
RESULT FOR THE -141 -1 073 -363 -305 -390 -879
PERIOD
% -1,9 % -10,4 % -5,7 % -4,5 % -6,2 % -12,4 %
Discontinued operations
1-3 4-6 1-3 4-6 7-9 10-12
(EUR thousand) 2006 2006 2005 2005 2005 2005
NET SALES 8 837 8 357 9 113 9 844 8 319 10 829
Other operating
income 37 79 730 423 59 184
Gain on disposal of
discontinued
operations 0 15 006
Material and
services -961 -784 -856 -972 -536 -985
Employee
benefits expense -6 330 -5 880 -6 791 -6 764 -6 450 -7 112
Depreciation
and amortisation 0 0 -47 -46 -156 -76
Other operating
expenses -3 263 -3 139 -2 495 -2 891 -2 403 -3 094
OPERATING RESULT -1 679 13 640 -345 -407 -1 167 -254
% -19,0 % 163,2 % -3,8 % -4,1 % -14,0 % -2,3 %
Financing income 295 709 432 420 143 151
Financing expenses -309 -60 -832 -748 -473 -251
RESULT BEFORE TAX AND
MINORITY INTEREST -1 694 14 289 -744 -735 -1 496 -354
% -19,2 % 171,0 % -8,2 % -7,5 % -18,0 % -3,3 %
Tax on income from
operations -252 -237 -165 -164 -40 -390
RESULT FOR THE -1 946 14 052 -909 -899 -1 536 -744
PERIOD
% -22,0 % 168,1 % -10,0 % -9,1 % -18,5 % -6,9 %
Group Total
1-3 4-6 1-3 4-6 7-9 10-12
(EUR thousand) 2006 2006 2005 2005 2005 2005
NET SALES 16 301 18 673 15 443 16 571 14 598 17 915
Other operating
income 180 113 737 624 -24 219
Gain on disposal of
discontinued
operations 14 534
Material and
services -964 -907 -861 -980 -586 -1 019
Employee
benefits expense -13 029 -15 705 -12 971 -13 112 -11 950 -14 080
Depreciation and
amortisation -86 -92 -134 -128 -241 -167
Other operating
expenses -4 011 -3 892 -2 874 -3 585 -3 240 -3 713
OPERATING RESULT -1 610 12 725 -660 -611 -1 444 -846
% -9,9 % 68,1 % -4,3 % -3,7 % -9,9 % -4,7 %
Financing income 302 716 500 446 147 307
Financing expenses -372 -122 -887 -779 -520 -655
RESULT BEFORE TAX AND
MINORITY INTEREST -1 679 13 319 -1 047 -944 -1 817 -1 194
% -10,3 % 71,3 % -6,8 % -5,7 % -12,4 % -6,7 %
Tax on income from
operations -408 -340 -225 -260 -108 -429
RESULT FOR THE
PERIOD -2 087 12 979 -1 273 -1 204 -1 925 -1 623
% -12,8 % 69,5 % -8,2 % -7,3 % -13,2 % -9,1 %
GROUP KEY FIGURES
(EUR million) 1-6 1-6 1-12
2006 2005 2005
Net sales 35,0 32,0 64,5
Net sales
continued operations 17,8 13,1 26,4
Net sales
discontinued operations 17,2 19,0 38,1
Operating result 11,1 -1,3 -3,6
% of net sales 31,8 % -4,0 % -5,5 %
Operating result
continued operations -0,8 -0,5 -1,4
Operating result
discontinued operations 12,0 -0,8 -2,2
Result before taxes 11,6 -2,0 -5,0
% of net sales 33,3 % -6,2 % -7,8 %
Result for the period 10,8 -2,5 -6,0
% of net sales 31,0 % -7,7 % -9,3 %
Return on equity, % 218,8 % -57,9 % -86,0 %
Return on investment,% 133,8 % -3,8 % -13,4 %
Interest-bearing liabilities 7,0 8,4 9,4
Cash and cash equivalents 2,7 6,5 7,3
Gearing, % 27,4 % 25,0 % 47,0 %
Equity to assets ratio, % 49,2 % 18,6 % 11,0 %
Balance sheet total 31,6 42,9 42,8
Gross investments 2,1 0,3 0,3
% of net sales 6,0 % 0,8 % 0,4 %
Research and development costs 3,4 3,4 7,3
% of net sales 9,7 % 10,5 % 11,3 %
Personnel average for
the period 549 529 525
Personnel at the end of
the period 312 527 531
Basic earnings
per share, EUR 0,177 -0,040 -0,098
Equity per share, EUR 0,25 0,12 0,07
Diluted earnings
per share, EUR 0,177 -0,040 -0,098
Average number of shares:
Undiluted 61 218 670 61 217 770 61 217 970
Diluted 61 255 219 61 352 668 61 217 970
Number of shares at end of
period: 61 218 670 61 217 770 61 218 670
LARGEST SHAREHOLDERS ON JUNE 30, 2006
Shareholder Percentage
of all
shares and
Number of voting
shares rights
Dovregruppen A.S. 6 560 646 10.7
Alec E. Gores Trust 6 357 655 10.4
Pekka Pere 4 241 105 6.9
Etra-Invest Oy 3 600 000 5.9
Pekka Mäkelä 2 923 775 4.8
Etola Erkki 2 000 000 3.3
Lars Nyqvist 1 799 355 2.9
Suupohjan Osuuspankki 1 655 000 2.7
Thominvest Oy 1 043 500 1.7
Eero Ruokostenpohja 700 950 1.1
Risto Saikko 566 390 0.9
Patrick Ternier 550 087 0.9
Reino Jokinen 530 000 0.9
Lapuan Osuuspankki 500 000 0.8
Alexa Marie Gores 474 720 0.8
Eric B. Gores 474 720 0.8
Lauren C. Gores 474 720 0.8
Rochelle Francis Gores 474 720 0.8
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