TABY, Sweden, Nov. 8, 2002 (PRIMEZONE) -- Enea Data (Other OTC:EDTDF) (Stockholm:ENEA):
- Enea Group net sales decreased in the third quarter by 14% to SEK 152 million. Sales for the nine-month period decreased by 24% to SEK 520 million. - Operating expenses for the quarter, excluding items affecting comparability, decreased compared to the previous year by 30%, or SEK 78 million, to SEK 181 million. In addition, the write-down of the stockholding in Polyhedra burdens the result to the amount of SEK 43 million. - The loss after net financial income in the third quarter was SEK -67 (-87) million. The result for the nine-month period was SEK -135 (-197) million. - OSE Systems net sales in the third quarter increased by 5% to SEK 53 million, with a loss after net financial income of SEK -68 (-81) million, including the write-down of the Polyhedra stockholding. - Consultancy operations net sales in the third quarter decreased by 21% to SEK 106 million, and the operating loss was SEK -4.3 (-8.9) million. - The program that has been put in place to radically improve the Group's efficiency and profitability is continuing. The goal of the program is to achieve a positive result during 2003.
The Market
The global market for investment in real-time operating systems has been marked by restraint among both existing and potential customers. It is our belief that this market will turn around to a positive trend again only after the general state of the market for industrial investments has improved.
Enea's OSE products continue to hold a strong position in the market, evidenced by the fact that even in a declining market, sales of OSE rose in the third quarter compared with the same period last year.
The Swedish market for consultancy shows marked regional differences. In the Oresund region, there is a solid demand for Enea's services, while in the Stockholm region the trend is weaker. In the other regions, market development is stable with a certain weakening in the Linkoping region, which has previously been strong. Thanks to a differentiated offer and excellent cooperation with our most important customers, in most areas we have maintained a strong position in the market.
Restructuring and Cost Reduction
Enea's management is of the opinion that the market for products and services will continue to be weak during the remainder of 2002 and for all of 2003. For this reason, management together with the board of directors has designed a radical restructuring program to bolster the business concept, reduce costs and increase cash flow throughout the entire Group. Solidity remains good, at the end of the period 64% (68%) and the cash flow for the nine-month period was SEK 1,5 million (SEK -- 106 million).
The Group will be reorganized into two branches of operations: one as a global supplier of real-time operating systems with associated services in the real-time area; the other as Swedish consultancy operations with a strong local profile in selected niche markets.
The Group's costs are being reduced to adjust the company to the current market trend and the business concept is being reviewed in order to improve our capacity to meet customers' needs with respect to complete solutions. The goal is to lower the costs by approx. SEK 190 million on an annual basis, with full effect from the turn of the year. The restructuring costs are estimated to be around SEK 50 million, which will burden the result for the fourth quarter.
The restructuring also means an adjustment of the organization to the prevailing market conditions. This means that the OSE organization outside of Sweden will be reduced by between 20 and 30 people. In the Swedish operations, 75 people will be given notice of termination of their employment, of which 35 will be from Enea Realtime in Stockholm, 25 from Enea Business Software in Stockholm and 15 from OSE Systems.
The results of the restructuring program, together with the previously decided and ongoing reductions in personnel mean that the Enea group will have only 600 employees once all the measures that have been decided on have been implemented. The number of employees in the group at the end of the period was 683 (899).
As a result of the strong decline in the global telecoms market, Enea has revised its opinion concerning the market's need for more integrated solutions for high availability. Enea therefore now believes that the acquisition of Polyhedra in spring 2001 will not result in an improvement in the result in the future equivalent to the investment made. For this reason, during the period OSE Systems' stockholding in Polyhedra Plc has been written down to the amount of SEK 43 million. Activities within Polyhedra Plc are concentrated on existing customers.
Analysis of the Third Quarter
Net Sales
Net sales in OSE operations increased by 5 percent to SEK 53.1 million. The quarter was somewhat weaker than anticipated in the U.S., and somewhat stronger than anticipated in Asia. Europe was as roughly as anticipated.
The net sales for consultancy operations reduced all in all by 21 percent to SEK 106 million. This reduction is primarily attributable to smaller volumes as a result of reductions in personnel that have already been implemented, where the most tangible volume changes could be seen in Enea TekSci.
Result
The result before taxes and items affecting comparability has improved strongly, or by SEK 40,8 million to SEK -34.9 million. The improvement in the result was achieved through reductions in operating costs by SEK 78.5 million, of which the reductions of personnel costs account for SEK 51.6 million.
The Group result for the quarter excluding items affecting comparability improved strongly, by SEK 42.1 million to SEK -35.8 million.
Operating loss for OSE operations excluding items affecting comparability was SEK -22.6 million, compared to SEK -67.7 million for the same period last year.
The operating loss for consultancy operations was SEK -4.3 million for the quarter, compared with SEK -8.9 million for the same period last year. Goodwill amortization of SEK 2.9 million is included. Enea Realtime and Enea TekSci showed a profit while Enea Business Software showed a loss for the quarter.
Future Information
Preliminary Report of 2002 Earnings:2003-02-07
Ola Berglund CEO
Please direct questions to Ola Berglund, ph: +46 8 507 140 00
This report has not been audited by the company auditors.
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