STOCKHOLM, Sweden, May 07, 2003 (PRIMEZONE) -- NeoNet:
The Quarter
- The Group's transaction revenues for the period amounted to SEK 35.2 m compared to SEK 60.3 m last year. The reduction of 42% is due to the decrease in trading volumes.
- Personnel and other operating expenses are at present cut to approximately SEK 110 m, or by at least SEK 25 m on an annual basis compared to the levels in the end of the second quarter last year, atwhich time the cost-cutting measures were initiated.
- The measures to reduce the transaction expenses by SEK 10-15 m on an annual basis at present volumes, and thereby improve the gross margin, are implemented successively during the year.
- The operating earnings before depreciation and net financial items were negative at SEK -5.5 m (10.2 m). The pre-tax losses amounted to SEK -13.0 m (0.3 m).
- The number of new clients continues to be high, especially in the U.K., the U.S. and the Nordic countries.
- Investments were almost halved and amounted to SEK 6.5 m (11.9 m), which is equivalent to 19% (20%) of the transaction revenues.
- The consolidated shareholders' equity amounted to SEK 214.4 m (228.1 m on 31 December 2002) at the end of the period and the equity/assets ratio was 66% (59%). The Group's cash in hand, adjusted for items relating to the settlement of clients' equity transactions, amounted to SEK 141.9 m (164.5 m in the beginning of the period).
Events after the end of the period
- NeoNet has entered into an agreement with the New York Stock Exchange providing connectivity for international trading services.
- In the beginning of April, ten employees within the Swedish operation were given notice of termination. The ongoing program of measures to reduce costs by at least SEK 25 m and increase the cash flow by at least SEK 35 m on an annual basis is progressing according to plan.
- NeoNet's ambition to offer trading equivalent to at least 80% of the market capitalization of the world's exchanges still stands. In 2003 electronic trading will be offered at the Madrid and Swiss Virt-X exchanges. NeoNet will offer trading on the New York Stock Exchange through the trading desk in the second quarter and full electronic trading in the beginning of next year.
CEO's Statement
"Over the past three years the combined turnover on the exchanges to which NeoNet has connected its exchange network has fallen by 70%. In spite of this, we are able to report unchanged trading values for the first quarter of the year compared to three years ago due to an increase in the inflow of new clients and trading on an increasing number of major exchanges.
"The ongoing program of measures is progressing according to plan, although it has not been able to compensate for the effect the fall in the markets has had on our first quarter revenues. Consequently, NeoNet is reporting a loss for the period. In the beginning of April, ten employees within the Swedish operation were given notice of termination as a further step in the program of measures launched in the middle of 2002.
"The rate of investment compared to last year has been almost halved, a newly developed system platform will be launched this year and the two remaining sizeable European exchanges, the Swiss Virt-X and the Madrid Exchange, will be connected to NeoNet's exchange network. Trading on the New York Stock Exchange will also be offered soon and full electronic direct access will be available next year. This will mean that our clients will have access to 80% of the market capitalization of the world's exchanges. At the end of 2003, we will have completed a five- year period of extensive investment. We anticipate a much slower rate of investment over the next few years, which will have a favorable effect on both our cash flow and depreciation costs.
"NeoNet's financial position continues to be strong with over SEK 140 m in cash, SEK 214 m in shareholders' equity and an equity/assets ratio of over 60%.
"Despite the market conditions, NeoNet strengthened its position as a recognized and established player in international equity trading. The resources for sales in Europe and the inflow of new clients are good. Our offering is cost-effective, of high quality and gives clients a powerful tool with which to execute transactions on the world's leading exchanges."
NeoNet
Torvald Bohlin, CEO
Tel.: +46 (0)8 454 1539
torvald.bohlin@neonet.biz
Website: www.neonet.biz
Future financial reports Interim report Q2 2003, 21 August 2003 Interim report 2003, 23 October 2003 Year-end report 2003, 29 January 2004
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