Walldorf, July 24, 2003. REALTECH AG's revenues fell in the 1st half of 2003 by 5% to Euro 27.7m (1st half of 2002: Euro 29.1m). Software revenues increased slightly to Euro 4.0m (Euro 3.9m), while consulting revenues fell by 6% to Euro 23.7m (Euro 25.2m).
EBITDA rose to Euro 1.8m (Euro 1.6m), while EBIT rose to Euro 0.3m (Euro 0.1m). When compar-ing these figures, you should bear in mind that - seeing as the software theGuard! developed in house had become ready for marketing - REALTECH has not capi-talized any further development expenditure in accordance with US GAAP since the fourth quarter of 2002. Compared to the same quarter in the previous year, this has resulted in EBIT falling by Euro 0.5m so far in 2003.
Consolidated net income amounts to minus Euro 0.9m (minus Euro 0.3m), while earnings per share are minus Euro 0.19 (minus Euro 0.06). The company has achieved a cash flow of Euro 2.5m (Euro 3.0m). At the end of June 2003, net cash and cash equivalents were Euro 18.2m, compared to Euro 16.6m at the end of 2002.
2nd quarter of 2003:
Revenues fell by 6% to Euro 14.2m (from Euro 15.2m in the first half year of 2002). As a result of customers postponing investments, software revenues fell 22% to Euro 2.0m (Euro 2.6m). Despite pressure on daily rates, consulting revenues - at Euro 12.3m - were only slightly below the figure in the previous year (Euro 12.6m).
Decreases were recorded in terms of EBITDA - from Euro 1.5m to Euro 1.1m - and EBIT - from Euro 0.7m to Euro 0.4m. If the company had continued to capitalize development expenditure as in the previous year, income from operations would have been Euro 0.3m higher. As a result of depreciation of interests in Grau Data Storage AG to the amount of Euro 0.7m, consolidated net income dropped to minus Euro 0.6m (Euro 0.1m), corresponding to earnings per share of minus Euro 0.11 EUR (Euro 0.03).
Daniele Di Croce, CEO at REALTECH AG: "In the difficult market environment at present, it has become particularly apparent that we have chosen the ideal strat-egy. Our software for monitoring and optimizing entire IT landscapes, combined with our technology consulting expertise, is beginning to enjoy increasing attention on the market and acceptance from our customers. Our slight increase in software sales despite the declining IT market - especially in terms of demand for standard consulting services - confirms that we have done the right thing in investing in our system and network management solution, theGuard! System Management Suite."
Even though the economic situation remains tense, REALTECH still expects to achieve the revenue and income targets it has set itself for fiscal year 2003.
The report on the 2nd quarter of 2003 is scheduled to be published on August 7, 2003.
