Proha Plc Interim Report August 14, 2008 at 9.00 a.m.
PROHA PLC INTERIM REPORT JANUARY 1, - JUNE 30, 2008 (IFRS)
Period January - June 2008:
Net sales grew by 39% and were EUR 31.7 million (22.9 million in January - June
2007).
Dovre division accounted for 95% (97%) and Camako division for 5% (3%) of the
Group net sales. The net sales for Dovre division grew by 36% and were EUR 30.2
(22.2) million, the net sales for Camako division grew by 131% and were EUR 1.5
(0.6) million.
Operating result before non-recurring items was EUR 0.6 (-0.3) million and after
non-recurring items EUR -0.4 (-0.3) million. Proha Group operating result
includes approximately EUR 1.0 million in non-recurring charges.
The operating result for Dovre division was EUR 1.5 (0.8) million. The operating
result for Camako division was EUR -0.3 (-0.5) million. The operating result for
other operations was EUR -1.5 (-0.6) million. The operating result for other
operations includes approximately EUR 0.9 million in non-recurring charges.
In January - June 2008, the Group result before non-recurring items was EUR -0.2
(-0.6) million and after non-recurring items EUR -1.2 (-0.6) million.
The earnings per share were EUR -0.02 (-0.01).
Ilari Koskelo was appointed as the Chief Executive Officer of Proha beginning
March 19, 2008.
On March 30, 2008 the Proha Board of Directors approved the revised strategy for
Proha Group.
April - June 2008:
Net sales grew by 39% and were EUR 16.4 million (11.8 million in April - June
2007).
Dovre division accounted for 94% (97%) and Camako division for 6% (3%) of the
net sales. The net sales for Dovre division grew by 35% and were EUR 15.5 (11.5)
million. The net sales for Camako division grew by 155% and were EUR 0.9 (0.4)
million.
Operating result before non-recurring items was EUR 0.5 (-0.4) million and after
non-recurring items EUR -0.5 (-0.4) million. Proha Group operating result
includes approximately EUR 1.0 million in non-recurring charges.
The operating result for Dovre division was EUR 0.7 (0.2) million. The operating
result for Camako division was EUR -0.1 (-0.2) million. The operating result for
other operations was EUR -1.1 (-0.4) million. The operating result for other
operations includes approximately EUR 0.9 million in non-recurring charges.
In April - June 2008, the Group result before non-recurring items was EUR 0.2
(-0.5) million and after non-recurring items EUR -0.8 (-0.5) million.
The earnings per share were EUR -0.01 (-0.01).
PROHA CEO ILARI KOSKELO:
I have completed my first financial quarter as the CEO of Proha. I have used
this time to implement action items in accordance to Proha‘s new strategy.
One of the most important ones has been appointing new leaders for Dovre and
Camako divisions. Together with the new leaders Otto Søberg and Timo Saros the
staff has renewed and repaired the problem areas of our business practices
leading to first signs of profit improvement for the company.
Dovre division's second quarter net sales improved by 35% and operating profit
by 241% compared with reference quarter Q2/2007 and the first 6 months net sales
improved by 36% and operating profit by 89% compared to the first half of 2007.
Of the quarterly net sales increase 24 percentage points were organic and the
remaining nine percentage points attributable to Canadian Project Resource
Solutions Inc., which was acquired Q4/2007. By developing the business and
earnings models for Dovre it is possible to improve the profitability further in
the future. The success of Dovre is extremely important for Proha as it
generates the majority of net sales.
So far we have not noticed the ongoing softening of the overall economy in the
business areas in which Dovre operates. The high price of oil and gas supports
the investment programs of Dovre's customers, which has facilitated the demand
for Dovre's services.
The Camako consultancy business developed positively and especially the Finnish
subsidiary Datatron Oy proved to be a positive surprise. The challenge to
improve Camako software sales in accordance to plans still remains and to
address that we plan to launch Camako software suite rebranded on August 22nd,
2008.
Extra work is required from the staff during the transition period when a
company is going through large structural changes. I am extremely pleased about
the positive attitude with which the employees have confronted the challenge.
KEY RATIOS OF THE PROHA GROUP
--------------------------------------------------------------------------------
| | 4-6 | 4-6 | | 1-6 | 1-6 | | 1-12 |
--------------------------------------------------------------------------------
| (EUR | 2008 | 2007 | Change | 2008 | 2007 | Change | 2007 |
| million) | | | % | | | % | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 16,4 | 11,8 | 38,9 % | 31,7 | 22,9 | 38,5 % | 51,0 |
--------------------------------------------------------------------------------
| Operating | -0,5 | -0,4 | -17,3 | -0,4 | -0,3 | -16,6 % | -0,2 |
| result | | | % | | | | |
--------------------------------------------------------------------------------
| % of net | -2,9 % | -3,5 % | | -1,2 % | -1,4 % | | -0,3 % |
| sales | | | | | | | |
--------------------------------------------------------------------------------
| Result | -0,7 | -0,4 | -53,6 | -0,9 | -0,4 | -122,7 | -0,6 |
| before | | | % | | | % | |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
| Result for | -0,8 | -0,5 | -67,1 | -1,2 | -0,6 | -111,0 | -1,2 |
| the period | | | % | | | % | |
--------------------------------------------------------------------------------
| Return on | -22,8 | -12,7 | | -12,7 % | -3,0 % | | -7,9 % |
| equity, % | % | % | | | | | |
--------------------------------------------------------------------------------
| Return on | -10,9 | -4,9 % | | -5,0 % | -1,3 % | | 1,6 % |
| investment | % | | | | | | |
| , % | | | | | | | |
--------------------------------------------------------------------------------
| Cash and | 3,5 | 10,9 | -68,2 | 3,5 | 10,9 | -68,2 % | 5,3 |
| cash | | | % | | | | |
| equivalent | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Debt-equit | 5,1 % | -28,6 | | 5,1 % | -28,6 | | -7,3 % |
| y ratio, % | | % | | | % | | |
--------------------------------------------------------------------------------
| Equity-rat | 43,1 % | 46,1 % | | 43,1 % | 46,1 % | | 45,5 % |
| io, % | | | | | | | |
--------------------------------------------------------------------------------
| Basic | -0,013 | -0,008 | -68,5 | -0,020 | -0,009 | -114,0 | -0,019 |
| earnings | | | % | | | % | |
| per share, | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| Diluted | -0,013 | -0,008 | -68,5 | -0,020 | -0,009 | -114,0 | -0,019 |
| earnings | | | % | | | % | |
| per share, | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| Equity per | 0,21 | 0,24 | -12,5 | 0,21 | 0,24 | -12,5 % | 0,23 |
| share, EUR | | | % | | | | |
--------------------------------------------------------------------------------
PROHA PLC'S REVISED STRATEGY
On March 30, 2008 the Proha Board of Directors approved the revised strategy for
Proha Group. The revisions to the strategy aim at improving profitability and
aligning the group structure to better meet the market needs.
IFRS REPORTING
The Group's primary segment reporting is based on business segments. The
reporting structure of Proha was adjusted by placing Norwegian Safran Software
Solutions AS under Dovre division. The remaining units of the previous Safran
Systems division were renamed Camako. The reporting structure of the Group has
been altered in accordance with the new divisional structure so that Dovre,
Camako and other operations constitute separately reporting business segments.
Other operations consist of Proha Group administration. The figures for January
1 - June 30, 2008 together with the comparative data are presented according to
the before mentioned business segments.
BUSINESS PERFORMANCE
Dovre division:
On June 3, 2008, Otto Søberg was appointed as the Chief Executive Officer of
Dovre division.
The first half year of 2008 has been a very busy period. In addition to recent
structural and organizational changes, the level of activity is high within all
geographical areas. In Norway the strong demand for professional project
services has continued within the existing oil & gas clients and also new
clients have been secured.
Dovre has in the period finalized a two month training course within contract
management for 30 managers in a large international oil & gas company. In
addition, nine major project management consulting projects have been worked
with within public sector. Also several new agreements were signed outside the
oil and gas industry focusing on public procurement. Recent recruiting campaign
within public procurement area has also been successful, recruiting within oil &
gas is still challenging in the current market.
In Dovre North America, the international operations of major oil companies
continue to be the focus area for the division's US activities. The Canadian
operations have gained several new customers in East Canada while business in
Alberta continues brisk.
The Norwegian Safran Software business has developed positively with new
customers for Safran products and existing customers purchasing additional
licenses and maintenance. Also, two new distribution agreements were signed in
the USA through Safran North America LLC. Four new resellers and three new
Services and technology partners and several new customers signed.
The markets continue strong and no major changes are foreseen in demand. In all
geographical areas the ability to recruit professionals continues challenging.
Camako division:
On May 7, 2008 Timo Saros was appointed the Chief Operating Officer of Camako
division. Saros has organized the division in accordance with the revised Proha
strategy and prepared the launch of software products and services under the new
brand name.
In Finland the demand for Microsoft EPM systems and related services continues
to grow. The division's Finnish service company Datatron Oy continued to gain
new customers in the second quarter and strengthened its position on the markets
through new maintenance agreements with existing customers.
At the end of the period under review, Camako signed a significant agreement for
the division on specification, development, testing and implementation of a cost
management module for investment projects using SafranOne technology. The new
module is known to have demand and its introduction as a generic product is
estimated to take place early 2009.
In the new organization the cooperation between Camako's Espoo office focusing
on software business and Datamar Oy in Lahti has been intensified. Datamar has a
significant role in definition and implementation of the new cost module for
investment projects. Additionally Datamar is responsible for the execution of
most tailored reporting and interface related deliveries. To secure
profitability some personnel restructuring were carried out at Datamar Oy during
the period under review.
Also in Sweden the Camako Data AB operations continued steady. Microsoft EPM
services have long been the core business of Camako and the level of know-how at
Camako is highly regarded in the Nordic countries. In the second quarter Camako
has recruited new professionals both in Finland and in Sweden in order to be
able to meet the growing demand. Also the know-how on applications based on
SafranOne technology has been increased and solutions have been presented to
customers in Sweden.
SafranOne family of products will be rebranded at the launch on August 22, 2008.
NET SALES
January - June 2008
In the first half of 2008 the net sales for Proha Group increased by 39% and
were EUR 31.7 million (EUR 22.9 million in January - June 2007). Dovre division
accounted for 95% (97%) and Camako division for 5% (3%) of the Group net sales.
The net sales for Dovre division grew by 36% and were EUR 30.2 (22.2) million,
the net sales for Camako division grew by 131% and were EUR 1.5 (0.6) million.
April - June 2008:
Proha Group net sales grew by 39% and were EUR 16.4 million (11.8 million in
April - June 2007). Dovre division accounted for 94% (97%) and Camako division
for 6% (3%) of the Group net sales. The net sales for Dovre division grew by 35%
and were EUR 15.5 (11.5) million, the net sales for Camako division grew by 155%
and were EUR 0.9 (0.4) million.
Distribution of net sales by business segments:
--------------------------------------------------------------------------------
| | 4-6 | 4-6 | | 1-6 | 1-6 | | 1-12 |
--------------------------------------------------------------------------------
| (EUR million) | 2008 | 2007 | Change | 2008 | 2007 | Change % | 2007 |
| | | | % | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dovre | 15.5 | 11.5 | 35.3 % | 30.2 | 22.2 | 35.9 % | 49.6 |
--------------------------------------------------------------------------------
| Camako | 0.9 | 0.4 | 155.0 % | 1.5 | 0.6 | 131.0 % | 1.4 |
--------------------------------------------------------------------------------
| Other | 0.0 | 0.2 | -75.6 % | 0.1 | 0.2 | -53.5 % | 0.4 |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Inter-segment | 0.0 | -0.1 | -84.2 % | 0.0 | -0.2 | -70.5 % | -0.4 |
| net sales | | | | | | | |
--------------------------------------------------------------------------------
| Group total | 16.4 | 11.8 | 38.9 % | 31.7 | 22.9 | 38.5 % | 51.0 |
--------------------------------------------------------------------------------
Distribution of net sales by geographical segments:
--------------------------------------------------------------------------------
| | 4-6 | 4-6 | 1-6 | 1-6 | 1-12 |
--------------------------------------------------------------------------------
| (EUR million) | 2008 | 2007 | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EMEA | 10,9 | 8,8 | 20,8 | 17,6 | 35,6 |
--------------------------------------------------------------------------------
| AMERICAS | 5,6 | 3,2 | 11,0 | 6,0 | 15,8 |
--------------------------------------------------------------------------------
| APAC | 0,2 | 0,3 | 0,5 | 0,8 | 1,7 |
--------------------------------------------------------------------------------
| Inter-segment net | -0,2 | -0,5 | -0,6 | -1,5 | -2,1 |
| sales | | | | | |
--------------------------------------------------------------------------------
| Group total | 16,4 | 11,8 | 31,7 | 22,9 | 51,0 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| | 4-6 | 4-6 | 1-6 | 1-6 | 1-12 |
--------------------------------------------------------------------------------
| (% of net sales) | 2008 | 2007 | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EMEA | 66,1 % | 74,3 % | 65,6 % | 77,1 % | 69,7 % |
--------------------------------------------------------------------------------
| AMERICAS | 33,9 % | 27,2 % | 34,7 % | 26,3 % | 31,0 % |
--------------------------------------------------------------------------------
| APAC | 1,4 % | 2,5 % | 1,5 % | 3,4 % | 3,4 % |
--------------------------------------------------------------------------------
| Inter-segment net | -1,4 % | -4,0 % | -1,9 % | -6,7 % | -4,1 % |
| sales | | | | | |
--------------------------------------------------------------------------------
| Group total | 100,0 % | 100,0 % | 100,0 % | 100,0 % | 100,0 % |
--------------------------------------------------------------------------------
Distribution of net sales by revenue type (EUR million and % of net sales):
--------------------------------------------------------------------------------
| | 4-6/ | % | 4-6/ | % | 1-6/ | % | 1-6/ | % | 1-12 | % |
| | | | | | | | | | / | |
--------------------------------------------------------------------------------
| | 2008 | | 2007 | | 2008 | | 2007 | | 2007 | |
--------------------------------------------------------------------------------
| Servic | 16,0 | 97,7 | 11,6 | 98,1 | 30,9 | 97,8 | 22,2 | 96,6 | 49,6 | 97,3 |
| es | | | | | | | | | | |
--------------------------------------------------------------------------------
| One | 0,2 | 1,0 | 0,1 | 1,1 | 0,3 | 0,9 | 0,3 | 1,3 | 0,6 | 1,2 |
| time | | | | | | | | | | |
| licens | | | | | | | | | | |
| e | | | | | | | | | | |
| revenu | | | | | | | | | | |
| e | | | | | | | | | | |
--------------------------------------------------------------------------------
| Recurr | 0,2 | 1,4 | 0,1 | 0,8 | 0,4 | 1,3 | 0,5 | 2,1 | 0,8 | 1,5 |
| ing | | | | | | | | | | |
| licens | | | | | | | | | | |
| e | | | | | | | | | | |
| revenu | | | | | | | | | | |
| e | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 16,4 | 100, | 11,8 | 100, | 31,7 | 100, | 22,9 | 100, | 51,0 | 100, |
| | | 0 | | 0 | | 0 | | 0 | | 0 |
--------------------------------------------------------------------------------
PROFITABILITY
Operating result January - June 2008
The Group operating result before non-recurring items was EUR 0.6 (-0.3) million
and EUR -0.4 (-0.3) million after non-recurring items. The operating result for
Dovre division was EUR 1.5 (0.8) million. The operating result for Camako
division was EUR -0.3 (-0.5) million. The operating result for other operations
was EUR -1.5 (-0.6) million.
Operating result April - June 2008
Proha Group operating result was EUR 0.5 (-0.4) million and after non-recurring
items EUR -0.5 (-0.4) million. The operating result for Dovre division was EUR
0.7 (0.2) million. The operating result for Camako division was EUR -0.1 (-0.2)
million. The operating result for other operations was EUR -1.1 (-0.4) million.
Distribution of operating result by segment (excluding non-recurring items):
--------------------------------------------------------------------------------
| | 4-6 | 4-6 | | 1-6 | 1-6 | | 1-12 |
--------------------------------------------------------------------------------
| (EUR million) | 2008 | 2007 | Change | 2008 | 2007 | Change % | 2007 |
| | | | % | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dovre | 0,8 | 0,2 | 263,7 | 1,5 | 0,8 | 89,4 | 2,1 |
--------------------------------------------------------------------------------
| Camako | 0,0 | -0,2 | 80,1 | -0,3 | -0,5 | 44,9 | -0,9 |
--------------------------------------------------------------------------------
| Others | -0,2 | -0,4 | 39,8 | -0,6 | -0,6 | -0,4 | -1,4 |
--------------------------------------------------------------------------------
| Group Total | 0,5 | -0,4 | 225,2 | 0,6 | -0,3 | 284,6 | -0,2 |
--------------------------------------------------------------------------------
Distribution of operating result by segment (including non-recurring items):
--------------------------------------------------------------------------------
| | 4-6 | 4-6 | | 1-6 | 1-6 | | 1-12 |
--------------------------------------------------------------------------------
| (EUR | 2008 | 2007 | Change | 2008 | 2007 | Change % | 2007 |
| million) | | | % | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dovre | 0,7 | 0,2 | 240,7 | 1,5 | 0,8 | 83,2 | 2,1 |
--------------------------------------------------------------------------------
| Camako | -0,1 | -0,2 | 55,8 | -0,3 | -0,5 | 32,8 | -0,9 |
--------------------------------------------------------------------------------
| Others | -1,1 | -0,4 | -193,0 | -1,5 | -0,6 | -138,5 | -1,4 |
--------------------------------------------------------------------------------
| Group Total | -0,5 | -0,4 | -17,3 | -0,4 | -0,3 | -16,6 | -0,2 |
--------------------------------------------------------------------------------
Non-recurring items
The operating result for both the period January - June 2008 and April - June
2008 as well as the result for the period January - June 2008 include approx.
EUR 1.0 million of non-recurring charges.
The operating result for other operations includes approx. EUR 0.9 million in
non-recurring charges. Of the non-recurring charges approx. EUR 0.7 million were
due to severance pay for the managing director and approx. EUR 0.2 million were
related to terminations of employment within the Group administration.
Dovre's operating result includes EUR 50 thousand and Camako's operating result
EUR 60 thousand in non-recurring charges. The non-recurring items resulted from
terminations of employment.
Result January - June 2008
In January - June 2008, the Group's result before taxes were EUR -0.9 (-0.4)
million and after taxes EUR -1.2 (-0.6) million.
In January - June 2008, the Group's result before non-recurring items was EUR
-0.2 (-0.6) million and after non-recurring items EUR -1.2 (-0.6) million.
In January - June 2008, Proha Group earnings per share was EUR -0.02 (-0.01).
Proha Group return on investment (ROI) was -5.0% (-1.3%).
Result April - June 2008
In April - June 2008, the Group's result before taxes were EUR -0.7 (-0.4)
million and after taxes -0.8 (-0.5) million.
In April - June 2008, the Group's result before non-recurring items was EUR 0.2
(-0.5) million and after non-recurring items EUR -0.8 (-0.5) million.
In April - June 2008, the Group earnings per share were EUR -0.01 (-0.01).
CASH FLOW, FINANCING AND INVESTMENTS
On June 30, 2008, the Proha Group balance sheet total was EUR 31.6 (33.0)
million.
On June 30, 2008, the cash and cash equivalents for the Proha Group totaled EUR
3.5 (10.9) million. On December 31, 2007, the cash and cash equivalents totaled
EUR 5.3 million. Additionally the Group parent company and subsidiaries have
unused checking account limits.
The cash flow from operating activities was EUR -1.1 (-1.1) million. The cash
flow from operating activities was decreased by the increase of EUR 1.6 million
in current interest-free receivables and EUR 1.3 million decrease in current
interest-free payables. EUR 0.7 million were paid in taxes.
The cash flow from investing activities was EUR -0.6 (-0.3) million. The gross
investments totaled EUR 0.6 (0.5) million. The gross investments include
acquisitions of subsidiaries EUR 0.2 million, investments of EUR 0.2 in Dovre's
associated company in the USA and capitalized software development costs of EUR
0.1 million.
The cash flow from financing activities was EUR -0.1 (0.3) million. New loans
worth of EUR 0.7 million were drawn, and EUR 0.8 million paid back.
On June 30, 2008, approximately EUR 0.2 million in non-recurring restructuring
charges remained unpaid and they are included in current provision on the
balance sheet.
The balance sheet goodwill totaled EUR 6.7 (4.9) million on June 30, 2008. The
Group's goodwill is not amortized but tested for impairment under IAS 36. No
indications of impairment of assets exist.
Equity ratio was 43.1% (46.1%) and debt to equity ratio was 5.1% (-28.6%). On
June 30, 2008, the interest-bearing liabilities amounted to EUR 4.2 (6.6)
million, accounting for 13.1 % (20.0%) of the Group's shareholders' equity and
liabilities total. Of the interest-bearing liabilities, EUR 1.5 (1.7) million
were non-current and EUR 2.7 (4.9) million current. The Group's Quick Ratio was
1.4 (1.6).
RESEARCH AND DEVELOPMENT
In the first half of 2008, the research and development costs for the Proha
Group were EUR 0.4 (0.4) million accounting for 3% (3%) of Group net sales.
A total of EUR 0.1 (0.1) million of research and development costs were
capitalized during the period under review. The research and development costs
of the Group consist nearly totally of the R&D of Safran Software Solutions AS
that is part of Dovre division and of the R&D at the units of Camako division.
The rebranding of SafranOne product of Camako division has not yet been carried
out but it has been combined with the launch of the next version on August 22,
2008. Functionalities for the family of products have been built as planned with
emphasis on development of interfaces to MS Project and MS Project Server. The
new interfaces enable the seamless integration of SafranOne software products
with the existing solutions of MS Project Server customers. The new 4.0 version
is trusted to bring increased market potential for the family of products.
The products for the resource planning and management solution for rescue
operations have been developed further. The new functionalities of Rescue
Planner is trusted to play a decisive role in the future bidding competitions.
The localization and introduction also to the Swedish markets is under review.
Safran Software Solutions AS, that is part of Dovre division focused
specifically on developing Safran for Microsoft Project to comply with the US
market needs.
PERSONNEL
In the first half of 2008, the staff costs for the Group amounted to EUR 29.3
(21.1) million. The staff costs include approx. EUR 0.9 (0.0) million in
non-recurring charges.
The staff costs of Dovre division were EUR 26.9 (19.9) million. The staff costs
of Camako division were EUR 1.2 (0.8) million. The staff costs for other
operations were EUR 1.2 (0.4) million.
The staff costs for the Group include approx. EUR 0.9 million in non-recurring
charges consisting of approx. EUR 0.7 million severance pay for the former
managing director and approx. EUR 0.2 million in other charges related to
termination of employments.
The average number of Group personnel was 388 (322) in the first half of 2008.
Distribution of personnel by segment (average):
--------------------------------------------------------------------------------
| | 4-6 | 4-6 | | 1-6 | 1-6 | | 1-12 |
--------------------------------------------------------------------------------
| | 2008 | 2007 | Change | 2008 | 2007 | Change % | 2007 |
| | | | % | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dovre | 349 | 287 | 21,9 | 346 | 287 | 20,6 | 297 |
--------------------------------------------------------------------------------
| Camako | 35 | 28 | 24,7 | 35 | 29 | 20,8 | 30 |
--------------------------------------------------------------------------------
| Other | 7 | 7 | | 7 | 6 | 13,5 | 6 |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Total | 391 | 322 | 21,6 | 388 | 322 | 20,5 | 333 |
--------------------------------------------------------------------------------
On June 30, 2008, the Proha Group employed 396 (323) people worldwide, with 355
(287) being employed by Dovre division, 35 (29) by Camako division and 6 (7) by
Group administration.
CHANGES IN MANAGEMENT
Proha Plc
Ilari Koskelo was appointed as the Chief Executive Officer of Proha beginning
March 19, 2008. Previously Ilari Koskelo has operated among others, as the
Managing Director of Navdata Oy, a company founded by him. Ilari Koskelo is the
Vice Chairman of Proha Board of Directors.
Dovre division
On June 3, 2008, Otto Søberg was appointed as the Chief Executive Officer of
Dovre division and as the member of Proha Group management team.
Mr. Søberg has extensive experience in the oil and gas related industries with
his latest position as the President of division Oil, Gas and Marine solutions
in Siemens AG. His previous employment also includes leading Kvaerner Oil & Gas
Field Development as President of the division.
Otto Søberg is the CEO for the entire Dovre division and he will be reporting
directly to the Dovre's Board of Directors. Arve Jensen will continue to lead
Dovre's Norwegian operations and Mike Critch the North American operations. Both
Mr. Jensen and Mr. Critch will report to Mr. Søberg. The founder of Dovre
International AS, Mr. Birger Flaa, will take an active role in the company's
Board of Directors.
Camako division
On May 7, 2008, Timo Saros was appointed as the Chief Operating Officer of
Camako division and as the member of Proha Group management team.
Previously Timo Saros has functioned, among others, as the managing director of
Proha's former subsidiary, Artemis Finland Oy and other positions within Proha
Group e.g. as member of the board of Safran Software Solutions AS, Dovre
International AS and Datamar Oy. Timo Saros is also the founder of Planman Oy, a
company specializing in project management software operating as the company's
managing director in 1986-2000. In 2000 the company was sold to Proha Group.
Group management team
Following the appointments the Proha Group management team consists of Proha Plc
CEO Ilari Koskelo, EVP Janne Rainvuori, CFO Sirpa Haavisto, CEO of Dovre
division Otto Søberg and COO of Camako division Timo Saros.
Both Dovre and Camako divisions have also their internal management teams.
DECISIONS OF GENERAL MEETINGS OF SHAREHOLDERS
DECISIONS OF EXTRAORDINARY GENERAL MEETING OF PROHA PLC SHAREHOLDERS ON FEBRUARY
26, 2008
The Extraordinary General Meeting decided to alter the number of Board members
to six.
The Extraordinary General Meeting selected the following persons in the Proha
Board: Birger Flaa, Ernest Jilderda, Antti Manninen, Ilari Koskelo, Jon Erling
Tenvik and Svein Stavelin. Birger Flaa and Ernest Jilderda are continuing from
the previous Board of Directors whereas all others are new members to the Board.
DECISIONS OF PROHA ANNUAL GENERAL MEETING OF SHAREHOLDERS APRIL 8, 2008
The Proha Annual General Meeting confirmed the 2007 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 result for the
financial period be entered in shareholders' equity and no dividend be paid.
Remuneration of the members of the Board of Directors and auditors' fees
The Annual General Meeting decided that the Chairman of the Board be paid EUR
30,000 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 20,000 per year as remuneration for board work.
The Annual General Meeting decided that the auditors will be paid in accordance
with a reasonable invoice.
Election of the members of Board of Directors
The persons elected by the extraordinary general meeting were re-elected in the
Proha Board, i.e. Birger Flaa, Ernest Jilderda, Antti Manninen, Ilari Koskelo,
Jon Erling Tenvik and Svein Stavelin.
Election of the regular Auditors
The Annual General Meeting decided that one firm of auditors, authorized by the
Central Chamber of Commerce, be elected as the auditor to the company. The
Annual General Meeting decided that Ernst & Young Oy, Authorized Public
Accountants, with APA Ulla Nykky in charge, be re-elected as the auditor.
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
makes one exception from the recommendation: 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
Shares:
Proha Plc has one class of shares. Each share entitles the shareholder to one
vote. Proha Plc shares are traded on the Nordic Exchange of OMX Group.
On January 1, 2008, the subscribed capital of Proha Plc was EUR 15,916,854.20.
No changes were made on the share capital during the period under review.
On January 1, 2008, the number of shares was 61,218,670.
In January 2008, a total of 500,000 new Proha Plc shares were issued as a
directed issue at the payment of the second installment of Camako acquisition.
The subscription price of the shares was the weighted average price of Proha
shares in Helsinki Stock Exchange from January 22 to 28, 2008, i.e. EUR 0.26 per
share, totaling at EUR 130 thousand. The total amount paid for the shares was
recorded in the fund for invested non-restricted equity.
In March 2008, 243,081 new Proha Plc shares were issued as a directed issue at
the payment of Datatron Oy acquisition. The subscription price of the shares was
the weighted average price of Proha shares in Helsinki Stock Exchange from
November 1, 2007 to January 31, 2008, i.e. EUR 0.27 per share, totaling at EUR
66 thousand. The total amount paid for the shares was recorded in the fund for
invested non-restricted equity.
On June 30, 2008, the number of shares was 61,961,751.
Option rights:
On January 1, 2008, a total of 4,123,250 options were outstanding of the option
plans of 2005, 2006 and 2007, entitling to subscription of 4,123,250 shares.
No shares were subscribed for with Proha Plc's option during the period under
review.
In the first half of 2008, a total of 27,720 option rights under 2005 plan and a
total of 90,000 option rights under 2007 plan were redeemed.
In its meeting on February 27, 2008, the company board approved 60,000
subscriptions of the 2007 plan. In its meeting on April 8, 2008, the board
approved 90,000 subscriptions and 90,000 subscriptions in its meeting on April
17, 2008 of the 2007 plan.
In its meeting on May 7, 2008, the company board approved the subscription of
90,000 Proha Plc option rights under 2007 plan that was earlier redeemed.
The subscription of the option rights of 2007 plan ended on April 17, 2008. The
terms of the options issue were presented in the stock exchange bulletin on
March 28, 2007. A total of 1,977,000 Proha Plc option rights were subscribed
for.
On June 30, 2008, a total of 4,393,250 option rights were outstanding as
follows: 1,075,250 option rights under 2005 plan (at subscription price of EUR
0.50), 1,341,000 option rights under 2006 plan (EUR 0.48) and 1,977,000 option
rights under 2007 plan (EUR 0.37). The company has redeemed 27,720 option rights
under 2005 plan. Each option right entitles to subscription of one share.
Board Authorization:
The Annual General Meeting on April 18, 2007 authorized the Board of Directors
to resolve to issue a maximum of 12,243,734 shares through issuance of shares or
special rights entitling to shares (including option rights) under Chapter 10,
Section 1 of the Companies Act, in one or more issues. The authorization
includes both the issuance of new shares as well as shares held by the Company,
and corresponded to 20 percent of the Company's total number of shares at the
date of the Annual General Meeting. The authorization is effective until April
17, 2012. Based on the authorization a total of 743,081 new shares were issued
and a total of 11,500,653 shares were remaining of the authorization on June 30,
2008.
TRADING ON THE HELSINKI STOCK EXCHANGE
The number of registered shareholders of Proha Plc totaled 3,189 on June 30,
2008. In January - June 2008, the share price was EUR 0.24 at its lowest and EUR
0.35 at its highest. The closing price on June 30, 2008 was EUR 0.32. Market
capitalization was approximately EUR 19.8 million at the end of the period under
review. The trading volume of the Proha share on the OMX Nordic Exchange was
approximately EUR 2.6 million during the period under review. Proha Plc had
liquidity providing agreement with Remium AB for the Proha share. The agreement
was terminated on April 29, 2008.
RISKS AND UNCERTAINTIES IN THE NEAR FUTURE
The demand in oil and gas sector together with the level of investments in the
sector impact the success of Dovre division. The companies operating in oil and
gas industry are challenged also by the adequacy of resources and added
personnel turnover.
According to Proha's revised strategy on March 30, 2008, Dovre division will
offer its customers more extensive projects with somewhat higher level of
liability and risks than what has been customary so far. The risk taking is
controlled and will be reflected in pricing of the services.
General competitive situation and technological solutions developed by the
competition impact the business of Camako division. The profitable growth for
Camako business calls for success in Microsoft cooperation and in the upcoming
launching of the family of software products under the new brand.
The development of Proha's international business includes also possible
acquisitions and shareholdings in companies operating in the field. Such
acquisitions always include risks. They are being managed, among others, by
ensuring that the size of acquisitions is reasonable.
EVENTS AFTER THE PERIOD
The Camako business activities were incorporated under a new Camako Nordic Oy
company, which is fully owned by Proha Plc. The companies Datamar Oy, Camako
Data AB and Datatron Oy operate under Camako Nordic Oy. The business activities
under the new company started August 1st, 2008.
The joint ownership of Dovre International AS by Proha Plc (current ownership 60
%) and Safran Software Solutions AS (current ownership 40 %) is being dissolved.
As the end result Proha Plc will own 100% of Dovre International AS shares and
Dovre International AS will own 100% of Safran Software Solutions AS shares.
The reason for the ownership arrangements is to form a judicial company
structure, which conforms with the organizational and reporting structure.
PROSPECTS FOR 2008
Proha's strategy was revised on March 30, 2008, and the organizational changes
and enhancement of operations are advancing as planned.
The normal seasonal fluctuations will effect the third quarter operating result,
however, it is estimated to improve from the comparison quarter in 2007. Due to
restructuring charges of approx. EUR 1.0 million that materialized in the second
quarter, a positive operating profit is still considered challenging but
possible in 2008.
The market outlook is anticipated to continue positive. The level of investments
within oil and gas industry is estimated to stay high and consequently the
demand for professional services by Dovre division is anticipated to remain
strong. The business models and management practices of Dovre will be revised.
The international growth of Dovre is anticipated to continue, but the main aim
is to improve profitability.
With the latest versions of Dovre's Safran Products now in compliance with the
US market needs and requirements we expect growth in sales in the USA for the
next 12 months.
The software business of Camako division is not yet profitable. It remains a
challenge for the new management to gain a substantial position within the
Nordic markets for the SafranOne family of products that will be rebranded.
Although the product is technically ready its success requires success in sales
and marketing as well as gaining sufficient number of references. The EPM
service business is anticipated to continue its profitable growth both in
Finland and in Sweden. The growth in service business requires successful
recruiting. In Norway the EPM service business is strengthened with the support
by Finnish and Swedish units.
The above prospects are based on forecasts approved by Proha Board.
Espoo on August 14, 2008
Proha Plc
Board of Directors
The interim report is unaudited.
PRESS CONFERENCE
Proha Plc will hold a press conference for the media and financial analysts on
August 14, 2008 at 1 p.m. at Proha Plc premises at Maapallonkuja 1 A, Espoo.
More information
PROHA PLC
CEO Ilari Koskelo, tel +358 (0)20 4362 000
ilari.koskelo@proha.com
CFO Sirpa Haavisto, tel. + 358 (0)20 4362 000
sirpa.haavisto@proha.com
DISTRIBUTION:
Helsinki Stock Exchange
Major Media
The quarterly report has been prepared in accordance to IFRS standards and the
same accounting principles have been followed as in the year-end financial
statements of 2007. The calculation principles of key financial figures and
their formulas remain unchanged and they are presented in the year-end financial
statements of 2007.
GROUP INCOME STATEMENT
--------------------------------------------------------------------------------
| | 4-6 | 4-6 | | 1-6 | 1-6 | | 1-12 |
--------------------------------------------------------------------------------
| (EUR | 2008 | 2007 | Change | 2008 | 2007 | Change | 2007 |
| thousand) | | | % | | | % | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES | 16 423 | 11 821 | 38,9 | 31 675 | 22 863 | 38,5 | 51 004 |
--------------------------------------------------------------------------------
| Other | 39 | 8 | 388,1 | 71 | 31 | 124,4 | 79 |
| operating | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Material and | -117 | -12 | 878,0 | -153 | -40 | 277,5 | -89 |
| services | | | | | | | |
--------------------------------------------------------------------------------
| Employee | -15 | -11 | 39,5 | -29 | -21 | 38,9 | -46 |
| benefits | 403 | 043 | | 336 | 120 | | 858 |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | -130 | -99 | 31,2 | -274 | -188 | 45,7 | -421 |
| and | | | | | | | |
| amortisation | | | | | | | |
--------------------------------------------------------------------------------
| Other | -1 293 | -1 085 | 19,2 | -2 368 | -1 875 | 26,3 | -3 872 |
| operating | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| OPERATING | -481 | -410 | -17,3 | -385 | -330 | -16,6 | -156 |
| RESULT | | | | | | | |
--------------------------------------------------------------------------------
| Financing | 29 | 200 | -85,4 | 74 | 243 | -69,5 | 569 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Financing | -160 | -159 | 0,5 | -409 | -251 | 63,1 | -934 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Share of | -43 | -57 | -24,7 | -148 | -52 | -183,3 | -85 |
| results in | | | | | | | |
| associates | | | | | | | |
--------------------------------------------------------------------------------
| RESULT BEFORE | -655 | -426 | 53,6 | -868 | -390 | -122,7 | -607 |
| TAX | | | | | | | |
--------------------------------------------------------------------------------
| Tax on income | -155 | -58 | 166,1 | -333 | -179 | 85,6 | -566 |
| from | | | | | | | |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| RESULT FOR | -810 | -484 | -67,1 | -1 200 | -569 | -111,0 | -1 174 |
| THE PERIOD | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ALLOCATION OF RESULT FOR THE | | | | | |
| PERIOD | | | | | |
--------------------------------------------------------------------------------
| Result | -836 | -490 | -70,6 | -1 247 | -578 | -115,9 | -1 191 |
| attributable | | | | | | | |
| to equity | | | | | | | |
| holders of | | | | | | | |
| the parent | | | | | | | |
--------------------------------------------------------------------------------
| Result | 27 | 6 | 359,9 | 47 | 9 | 428,3 | 18 |
| attributable | | | | | | | |
| to minority | | | | | | | |
| interest | | | | | | | |
--------------------------------------------------------------------------------
| | -810 | -484 | -67,1 | -1 200 | -569 | -111,0 | -1 174 |
--------------------------------------------------------------------------------
| Earnings/shar | -0,013 | -0,008 | -68,5 | -0,020 | -0,009 | -114,0 | -0,019 |
| e (undiluted) | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| Earnings/shar | -0,013 | -0,008 | -68,5 | -0,020 | -0,009 | -114,0 | -0,019 |
| e (diluted) | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
GROUP BALANCE SHEET
--------------------------------------------------------------------------------
| | 30.6. | 30.6. | | 31.12. |
--------------------------------------------------------------------------------
| (EUR thousand) | 2008 | 2007 | Change % | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Intangible assets | 2 583 | 2 118 | 21,9 | 2 676 |
--------------------------------------------------------------------------------
| Goodwill | 6 725 | 4 911 | 36,9 | 6 747 |
--------------------------------------------------------------------------------
| Tangible assets | 361 | 209 | 72,3 | 356 |
--------------------------------------------------------------------------------
| Investments in associates | 1 313 | 1 124 | 16,8 | 1 277 |
--------------------------------------------------------------------------------
| Trade receivables and | 204 | 48 | 327,8 | 136 |
| other receivables | | | | |
--------------------------------------------------------------------------------
| Available-for-sale | 48 | 48 | -0,1 | 48 |
| investments | | | | |
--------------------------------------------------------------------------------
| Deferred tax asset | 179 | 253 | -29,0 | 204 |
--------------------------------------------------------------------------------
| Non-current assets | 11 412 | 8 711 | 31,0 | 11 444 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Trade receivables and | 16 766 | 13 339 | 25,7 | 15 216 |
| other receivables | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 3 463 | 10 902 | -68,2 | 5 349 |
--------------------------------------------------------------------------------
| Current assets | 20 229 | 24 241 | -16,6 | 20 566 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL ASSETS | 31 642 | 32 952 | -4,0 | 32 009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | | | | |
--------------------------------------------------------------------------------
| Share capital | 15 917 | 15 917 | 0,0 | 15 917 |
--------------------------------------------------------------------------------
| Share premium account | 4 379 | 4 379 | 0,0 | 4 379 |
--------------------------------------------------------------------------------
| Fair value reserve and | 497 | 361 | 37,9 | 329 |
| other reserves | | | | |
--------------------------------------------------------------------------------
| Translation differences | 72 | 251 | -71,5 | 187 |
--------------------------------------------------------------------------------
| Retained earnings | -7 649 | -5 980 | 27,9 | -6 470 |
--------------------------------------------------------------------------------
| Equity attributable to | 13 215 | 14 927 | -11,5 | 14 342 |
| equity holders of the | | | | |
| parent | | | | |
--------------------------------------------------------------------------------
| Minority interest | 195 | 110 | 77,6 | 115 |
--------------------------------------------------------------------------------
| Shareholders' equity | 13 411 | 15 037 | -10,8 | 14 457 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Deferred tax liability | 640 | 492 | 30,2 | 653 |
--------------------------------------------------------------------------------
| Long-term liabilities, | 1 488 | 1 702 | -12,6 | 2 010 |
| interest-bearing | | | | |
--------------------------------------------------------------------------------
| Long-term liabilities, | 395 | 0 | | 439 |
| interest-free | | | | |
--------------------------------------------------------------------------------
| Liabilities from defined | 522 | 530 | -1,4 | 488 |
| benefit plan | | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | 3 045 | 2 724 | 11,8 | 3 590 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Short-term interest | 2 663 | 4 898 | -45,6 | 2 289 |
| bearing liabilities | | | | |
--------------------------------------------------------------------------------
| Trade payables and other | 12 018 | 9 848 | 22,0 | 11 041 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Tax liability, income tax | 294 | 446 | -34,2 | 632 |
--------------------------------------------------------------------------------
| Current provisions | 211 | 0 | | 0 |
--------------------------------------------------------------------------------
| Current liabilities | 15 186 | 15 192 | 0,0 | 13 962 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL EQUITY AND | 31 642 | 32 952 | -4,0 | 32 010 |
| LIABILITIES | | | | |
--------------------------------------------------------------------------------
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
a) Share capital
b) Share premium account
c) Fair value reserve and other reserves
d) Translation differences
e) Retained earnings
f) Equity attributable to equity holders of the parent
g) Minority interest
h) Shareholders' equity total
--------------------------------------------------------------------------------
| | a) | b) | c) | d) | e) | f) | g) | h) |
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 15 | 4 | 368 | 38 | -5 497 | 15 205 | 112 | 15 316 |
| EQUITY 1.1.2007 | 917 | 379 | | | | | | |
--------------------------------------------------------------------------------
| Change in | 0 | 0 | 13 | 149 | 50 | 211 | -14 | 197 |
| translation | | | | | | | | |
| diff. | | | | | | | | |
--------------------------------------------------------------------------------
| Share based | 0 | 0 | 0 | 0 | 117 | 117 | 0 | 117 |
| payments | | | | | | | | |
--------------------------------------------------------------------------------
| Transfers | 0 | 0 | -51 | 0 | 51 | 0 | 0 | 0 |
| between items | | | | | | | | |
--------------------------------------------------------------------------------
| NET PROFIT/LOSS | 0 | 0 | -38 | 149 | 218 | 329 | -14 | 315 |
| RECOGNISED | | | | | | | | |
| DIRECTLY IN | | | | | | | | |
| SHAREHOLDERS' | | | | | | | | |
| EQUITY | | | | | | | | |
--------------------------------------------------------------------------------
| Result for the | 0 | 0 | 0 | 0 | -1 191 | -1 191 | 18 | -1 174 |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| TOTAL PROFIT | 0 | 0 | 0 | 0 | -1 191 | -1 191 | 18 | -1 174 |
| AND LOSS | | | | | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 15 | 4 | 329 | 187 | -6 470 | 14 342 | 115 | 14 457 |
| EQUITY 1.1.2008 | 917 | 379 | | | | | | |
--------------------------------------------------------------------------------
| Change in | 0 | 0 | -2 | -11 | -29 | -147 | -11 | -158 |
| translation | | | | 6 | | | | |
| diff. | | | | | | | | |
--------------------------------------------------------------------------------
| Share based | 0 | 0 | 0 | 0 | 72 | 72 | 0 | 72 |
| payments | | | | | | | | |
--------------------------------------------------------------------------------
| Share issues | 0 | 0 | 196 | 0 | 0 | 196 | 0 | 196 |
--------------------------------------------------------------------------------
| Company | | | | | | 0 | 44 | 44 |
| purchases | | | | | | | | |
--------------------------------------------------------------------------------
| Transfers | 0 | 0 | -25 | 0 | 25 | 0 | 0 | 0 |
| between items | | | | | | | | |
--------------------------------------------------------------------------------
| NET PROFIT/LOSS | 0 | 0 | 168 | -11 | 68 | 120 | 33 | 154 |
| RECOGNISED | | | | 6 | | | | |
| DIRECTLY IN | | | | | | | | |
| SHAREHOLDERS' | | | | | | | | |
| EQUITY | | | | | | | | |
--------------------------------------------------------------------------------
| Result for the | 0 | 0 | 0 | 0 | -1 247 | -1 247 | 47 | -1 200 |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| TOTAL PROFIT | 0 | 0 | 0 | 0 | -1 247 | -1 247 | 47 | -1 200 |
| AND LOSS | | | | | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 15 | 4 | 497 | 72 | -7 649 | 13 215 | 195 | 13 411 |
| EQUITY | 917 | 379 | | | | | | |
| 30.6.2008 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | a) | b) | c) | d) | e) | f) | g) | h) |
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 15 | 4 | 368 | 38 | -5 497 | 15 205 | 112 | 15 316 |
| EQUITY 1.1.2007 | 917 | 379 | | | | | | |
--------------------------------------------------------------------------------
| Change in | 0 | 0 | 6 | 213 | 69 | 288 | -10 | 277 |
| translation | | | | | | | | |
| diff. | | | | | | | | |
--------------------------------------------------------------------------------
| Share based | 0 | 0 | 0 | 0 | 12 | 12 | 0 | 12 |
| payments | | | | | | | | |
--------------------------------------------------------------------------------
| Transfers | 0 | 0 | -13 | 0 | 13 | 0 | 0 | 0 |
| between items | | | | | | | | |
--------------------------------------------------------------------------------
| NET PROFIT/LOSS | 0 | 0 | -7 | 213 | 94 | 300 | -10 | 290 |
| RECOGNISED | | | | | | | | |
| DIRECTLY IN | | | | | | | | |
| SHAREHOLDERS' | | | | | | | | |
| EQUITY | | | | | | | | |
--------------------------------------------------------------------------------
| Result for the | 0 | 0 | 0 | 0 | -578 | -578 | 9 | -569 |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| TOTAL PROFIT | 0 | 0 | 0 | 0 | -578 | -578 | 9 | -569 |
| AND LOSS | | | | | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 15 | 4 | 361 | 251 | -5 980 | 14 927 | 110 | 15 037 |
| EQUITY | 917 | 379 | | | | | | |
| 30.6.2007 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP CASH FLOW STATEMENT | | | |
--------------------------------------------------------------------------------
| | | | 1-6 | 1-6 | 1-12 |
--------------------------------------------------------------------------------
| (EUR thousand) | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from operating activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Operating result | -385 | -330 | -156 |
--------------------------------------------------------------------------------
| | Adjustments | | | |
--------------------------------------------------------------------------------
| | | Employee benefits expense | 109 | 162 | 194 |
--------------------------------------------------------------------------------
| | | Depreciation and amortisation | 274 | 188 | 421 |
--------------------------------------------------------------------------------
| | | Other adjustments | 17 | | |
--------------------------------------------------------------------------------
| | Adjustments, total | 400 | 350 | 615 |
--------------------------------------------------------------------------------
| | Change in net working capital | | | |
--------------------------------------------------------------------------------
| | | Increase (-) / decrease (+) in | -1 581 | -848 | -2 610 |
| | | current receivables | | | |
--------------------------------------------------------------------------------
| | | Increase (-) / decrease (+) in | 1 278 | -21 | 1 430 |
| | | current liabilities | | | |
--------------------------------------------------------------------------------
| | | Other adjustments | | | |
--------------------------------------------------------------------------------
| | Change in net working capital, total | -303 | -869 | -1 181 |
--------------------------------------------------------------------------------
| | Interest paid | -171 | -112 | -613 |
--------------------------------------------------------------------------------
| | Interest received | 72 | 263 | 566 |
--------------------------------------------------------------------------------
| | Other financial expenses paid | -30 | -37 | -236 |
--------------------------------------------------------------------------------
| | Other financial income received | 1 | 10 | 28 |
--------------------------------------------------------------------------------
| | Income taxes paid | -742 | -342 | -486 |
--------------------------------------------------------------------------------
| Cash flow from operating activities | -1 159 | -1 065 | -1 463 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities | | | |
--------------------------------------------------------------------------------
| | Investments in tangible and intangible | -183 | -301 | -577 |
| | assets | | | |
--------------------------------------------------------------------------------
| | Acquisition of subsidiaries net cash | -164 | | -2 177 |
| | acquired *) | | | |
--------------------------------------------------------------------------------
| | Investments in associates | -223 | -110 | -378 |
--------------------------------------------------------------------------------
| | Investments in other investments | | -12 | -12 |
--------------------------------------------------------------------------------
| | Proceeds from other investments | | 74 | 74 |
--------------------------------------------------------------------------------
| | Dividends received | 3 | 2 | 2 |
--------------------------------------------------------------------------------
| Cash flow from investing activities | -568 | -347 | -3 068 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing activities | | | |
--------------------------------------------------------------------------------
| | Proceeds from short-term loans | 399 | 931 | 1 015 |
--------------------------------------------------------------------------------
| | Repayments of short-term loans | -420 | -624 | -702 |
--------------------------------------------------------------------------------
| | Repayment of convertible loans | | | -2 810 |
--------------------------------------------------------------------------------
| | Proceeds from long-term loans | 262 | | 435 |
--------------------------------------------------------------------------------
| | Repayments of long-term loans | -340 | -3 | |
--------------------------------------------------------------------------------
| Cash flow from financing activities | -99 | 304 | -2 062 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -1 826 | -1 108 | -6 592 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at beginning of the | 5 349 | 12 022 | 12 022 |
| period | | | |
--------------------------------------------------------------------------------
| Foreign exchange rate adjustment | -60 | -18 | -80 |
--------------------------------------------------------------------------------
| Cash and cash equivalents of subsidiaries | 131 | | 19 |
| acquired | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents of subsidiaries | | | |
| divested | | | |
--------------------------------------------------------------------------------
| Fair value adjustment | | 6 | |
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -1 956 | -1 108 | -6 612 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end of the | 3 464 | 10 902 | 5 349 |
| period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| *) Portion of acquisition cost of | 1-6 | 1-6 | 1-12 |
| subsidiaries | | | |
--------------------------------------------------------------------------------
| less cash at acquisition: | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Camako Data AB | -145 | | -441 |
--------------------------------------------------------------------------------
| | Project Resource Solutions Inc. | -81 | | -861 |
--------------------------------------------------------------------------------
| | Datatron Oy | 62 | | |
--------------------------------------------------------------------------------
| | Fabcon sub-group | | | -875 |
--------------------------------------------------------------------------------
| | Total | | -164 | | -2 177 |
--------------------------------------------------------------------------------
NOTES TO THE GROUP FINANCIAL STATEMENTS
ACQUISITIONS
Datatron Oy
In the period under review 2008, Proha Plc decided to use the right by the
option agreement to acquire 40% of the Datatron Oy share capital. After the
option right was used Proha Plc owns 60% of Datatron Oy. Datatron Oy has been
consolidated in the Proha group financial statements beginning March 31, 2008.
The acquisition of Datatron Oy does not have a material impact on net sales or
result of Proha Group in 2008.
The acquisition cost of the shares is EUR 135 thousand, added with the potential
premium to be paid in 2009 based on the 2008 result. Datatron's acquisition cost
is approximately EUR 154 thousand according to estimates on June 30, 2008. The
fixed part of EUR 132 thousand of the purchase price was paid by EUR 66 thousand
in cash installment and EUR 66 thousand in new Proha Plc shares.
EUR 24 thousand of the acquisition cost is allocated to customer relations. Of
the acquisition, EUR 92 thousand is recognized as goodwill.
The following assets and liabilities were recognized of the acquire on March 31,
2008:
--------------------------------------------------------------------------------
| | Fair value | Carrying | Carrying |
| | upon | amount before | amount before |
| | business | business | business |
| | combination | combination | combination |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 40,0 % | 40,0 % | 100,0 % |
--------------------------------------------------------------------------------
| Acquisition date | 31.3.2008 | 31.3.2008 | 31.3.2008 |
--------------------------------------------------------------------------------
| (EUR thousand) | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Tangible assets | 24 | 0 | 0 |
--------------------------------------------------------------------------------
| Intangible assets | 2 | 2 | 6 |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Trade receivables and other | 32 | 32 | 80 |
| receivables | | | |
--------------------------------------------------------------------------------
| Cash and bank | 52 | 52 | 131 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets total | 111 | 87 | 216 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liability | 6 | 0 | 0 |
--------------------------------------------------------------------------------
| Trade payables and | 30 | 30 | 74 |
| other liabilities | | | |
--------------------------------------------------------------------------------
| Income tax liability | 13 | 13 | 31 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities total | 48 | 42 | 105 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minority interest | 0 | 44 | 111 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Net assets | 62 | | |
--------------------------------------------------------------------------------
| Goodwill on acquisition | 92 | | |
--------------------------------------------------------------------------------
| Acquisition cost, total | 154 | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Amount of acquisition cost | 66 | | |
| paid in cash | | | |
--------------------------------------------------------------------------------
| Amount of acquisition cost | 66 | | |
| paid in Proha Plc shares | | | |
--------------------------------------------------------------------------------
| Costs directly attributable | 3 | | |
| to the acquisition | | | |
--------------------------------------------------------------------------------
| Amount of non-current, | 20 | | |
| non-interest bearing | | | |
| liabilities | | | |
--------------------------------------------------------------------------------
| Acquisition cost total | 154 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Amount of acquisition cost | 69 | | |
| paid in cash | | | |
--------------------------------------------------------------------------------
| - cash on acquisition date | -131 | | |
--------------------------------------------------------------------------------
| Impact on cash flow from | -62 | | |
| investing activities 1.1. - | | | |
| 30.6.2008 | | | |
--------------------------------------------------------------------------------
The figures of the table are based on exchange rate of the acquisition date.
Camako Data AB
In October 2007 Proha acquired full ownership of the Swedish project management
IT consultancy company Camako Data AB (Camako). Camako is consolidated in
Proha's group financial statements beginning November 1, 2007.
The acquisition cost of Camako is estimated at EUR 1.1 million on June 30, 2008.
The acquisition cost of Camako is composed of a fixed portion of approximately
EUR 0.7 million and of a potential additional purchase price that is based on
certain performance objectives. If all performance objectives are met in full,
the additional purchase price will total approximately EUR 0.4 million.
The fixed portion approximately EUR 0.7 million was paid in two installments
with approximately EUR 0.4 million paid at closing and approximately EUR 0.3
million in January 2008.
The second installment EUR 275,000 of the fixed purchase price for Camako Data
AB was paid partly in shares by issuing 500,000 new Proha shares for
subscription by the seller. According to the terms of the purchase agreement the
subscription price of the shares is the weighted average price of Proha shares
in Helsinki Stock Exchange between January 22 - 28, 2008, i.e. EUR 0.26 per
share, totaling at EUR 130,000.00. The total amount paid for the shares was
recorded in the fund for invested non-restricted equity. The remainder of the
second installment, EUR 145,000 was paid in cash. Two thirds of the new shares
include a sales restriction that will expire on October 26, 2008 for the first
third and on October 26, 2009 for the second third.
According to the estimates on June 30, 2008, the possible additional purchase
price would be approximately EUR 0.4 million and will be paid at latest in 2009
either in cash or in Proha Plc shares. The estimated additional purchase price
of approximately 0.4 million is included in the accrued liabilities of the
non-current liabilities in the Group balance sheet on June 30, 2008.
Project Resource Solutions Inc
Proha's Canadian subsidiary Fabcon Canada Limited acquired full ownership of
Project Resource Solutions Inc (PRS)in November 2007. PRS is consolidated in
Proha's group financial statements beginning November 20, 2007.
In November 2007, the fixed part of the purchase price CAD 1.2 million (approx.
EUR 0.9 million) was paid in cash.
In addition, the agreement contains an earn out model that will pay the sellers
30% of PRS gross profits over the 36 months between November 20, 2007 - December
19, 2010. The acquisition cost of PRS is estimated at EUR 1.1 million both on
December 31, 2007 and June 30, 2008. The acquisition cost of PRS is composed of
a fixed portion of CAD 1.2 million (approximately EUR 0.8 million) and immediate
related acquisition costs of EUR 30 thousand. Additionally, on the date of
acquisition EUR 0.2 were recognized as adjustment to the acquisition cost. The
EUR 0.2 million adjustment to acquisition cost consists of additional purchase
price based on gross margin between November 20, 2007 and December 31, 2008 and
is based on the probability of the adjustment and that it can be reliably
defined. The estimated gross margin is based on actual earnings development in
November 20, 2007-June 30, 2008 and on the budget approved by Proha Board for
July 1, - December 31, 2008. Of the estimated additional purchase price of
approximately EUR 0.1 million is included in the accrued liabilities of the
current liabilities in the Group balance sheet on June 30, 2008.
GROUP COMMITMENTS AND CONTINGENT LIABILITIES
--------------------------------------------------------------------------------
| (EUR thousand) | 30.6. | 30.6. | 31.12. | |
--------------------------------------------------------------------------------
| | 2008 | 2007 | 2007 | |
--------------------------------------------------------------------------------
| COLLATERAL FOR OWN COMMITMENTS | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Debts secured by corporate mortgages | | | | |
--------------------------------------------------------------------------------
| Loans from financing institutions | 3 845 | 3 349 | 3 714 | |
--------------------------------------------------------------------------------
| Book value of shares of Dovre | 7 292 | 6 315 | 7 264 | |
| International AS and Dovre Fabcon AS | | | | |
| and current assets of Dovre Fabcon AS | | | | |
| given as security | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Debts secured by assets | | | | |
--------------------------------------------------------------------------------
| Loans and checking account credit | 250 | 251 | 251 | |
| lines | | | | |
--------------------------------------------------------------------------------
| Book value of trade receivables and | 536 | 385 | 674 | |
| fixed assets given as security | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Debts secured by shares | | | | |
--------------------------------------------------------------------------------
| Loans and checking account credit | | 12 | | |
| lines | | | | |
--------------------------------------------------------------------------------
| Book value of pledged shares | 511 | 511 | 511 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Future minimum lease payments under | | | | |
| non-cancellable operating leases | | | | |
--------------------------------------------------------------------------------
| Not later than one year | 263 | 284 | 338 | |
--------------------------------------------------------------------------------
| Later than one year and not later than | 679 | 1 180 | 1 008 | |
| five years | | | | |
--------------------------------------------------------------------------------
| Total | 942 | 1 464 | 1 346 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deposits given as security for lease | 19 | | 19 | |
| agreement | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DISPUTES AND COURT PROCEEDINGS
The disputed termination of employment by Steinar Dalva, the former CEO of the
Proha's Norwegian subsidiary Safran Software Solutions AS, has been settled.
The company has no disputes or court proceedings ongoing.
CHANGES IN TANGIBLE ASSETS
--------------------------------------------------------------------------------
| | 30.6.2008 | 30.6.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Opening balance | 356 | 216 | 216 |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries | 6 | 21 | 43 |
--------------------------------------------------------------------------------
| Additions | 85 | 21 | 204 |
--------------------------------------------------------------------------------
| Disposals | -30 | 0 | 0 |
--------------------------------------------------------------------------------
| Depreciation and impairment | -52 | -50 | -103 |
--------------------------------------------------------------------------------
| Translation differences | -5 | 1 | -3 |
--------------------------------------------------------------------------------
| Closing balance | 361 | 209 | 356 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RELATED PARTY TRANSACTIONS | | | |
--------------------------------------------------------------------------------
| Investments in associates, | 30.6.2008 | 30.6.2007 | 31.12.2007 |
| changes: | | | |
--------------------------------------------------------------------------------
| Book value, opening balance | 1 277 | 982 | 982 |
--------------------------------------------------------------------------------
| Additions | 225 | 193 | 373 |
--------------------------------------------------------------------------------
| Share of profit / loss in | -143 | -51 | -78 |
| associates | | | |
--------------------------------------------------------------------------------
| Transferred to subsidiary | -23 | 0 | 0 |
| investments | | | |
--------------------------------------------------------------------------------
| Translation differences | -23 | 0 | 0 |
--------------------------------------------------------------------------------
| Book value, closing balance | 1 313 | 1 124 | 1 277 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Transactions with associates: | 1-6/2008 | 1-6/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| Sales | 4 | 0 | 6 |
--------------------------------------------------------------------------------
| Financial income | 0 | 0 | 15 |
--------------------------------------------------------------------------------
| Purchases | 32 | 0 | 45 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Open balances with associates: | 30.6.2008 | 30.6.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Trade payables | 0 | 0 | 7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transactions with other | | | |
--------------------------------------------------------------------------------
| related parties: | 1-6/2008 | 1-6/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| Sales | 14 | 23 | 74 |
--------------------------------------------------------------------------------
| Consulting fees *) | 126 | 141 | 286 |
--------------------------------------------------------------------------------
| Rents for premises *) | 132 | 116 | 240 |
--------------------------------------------------------------------------------
| Other purchases | 3 | 5 | 9 |
--------------------------------------------------------------------------------
| Interest on the convertible | 0 | 42 | 84 |
| loan **) | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Open balances with | | | |
--------------------------------------------------------------------------------
| other related parties: | 30.6.2008 | 30.6.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Increase in available-for | 0 | 12 | 12 |
| sales investments | | | |
--------------------------------------------------------------------------------
| Trade receivables | 0 | 0 | 1 |
--------------------------------------------------------------------------------
| Convertible loan **) | 0 | 1 405 | 0 |
--------------------------------------------------------------------------------
| Trade payables | 41 | 1 | 32 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| *) The consulting fees and rents have been paid to companies controlled by |
| the member of the board. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| **) The convertible loan subscribed by the investment company of the former |
| CEO fell due on December 30, 2007. |
--------------------------------------------------------------------------------
INCOME STATEMENT QUARTERLY
--------------------------------------------------------------------------------
| | 4-6 | 1-3 | 10-12 | 7-9 | 4-6 | 1-3 |
--------------------------------------------------------------------------------
| (EUR thousand) | 2008 | 2008 | 2007 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES | 16 423 | 15 253 | 15 540 | 12 601 | 11 821 | 11 041 |
--------------------------------------------------------------------------------
| Other operating | 39 | 32 | 40 | 7 | 8 | 24 |
| income | | | | | | |
--------------------------------------------------------------------------------
| Materials and | -117 | -35 | -6 | -42 | -12 | -28 |
| services | | | | | | |
--------------------------------------------------------------------------------
| Employee benefits | -15 | -13 | -14 | -11 730 | -11 043 | -10 077 |
| expense | 403 | 933 | 007 | | | |
--------------------------------------------------------------------------------
| Depreciation and | -130 | -144 | -127 | -105 | -99 | -89 |
| amortisation | | | | | | |
--------------------------------------------------------------------------------
| Other operating | -1 293 | -1 075 | -1 139 | -858 | -1 085 | -791 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| OPERATING RESULT | -481 | 96 | 301 | -127 | -410 | 80 |
--------------------------------------------------------------------------------
| % | -2,9 % | 0,6 % | 1,9 % | -1,0 % | -3,5 % | 0,7 % |
--------------------------------------------------------------------------------
| Financing income | 29 | 45 | 219 | 106 | 200 | 44 |
--------------------------------------------------------------------------------
| Financing | -160 | -249 | -512 | -172 | -159 | -91 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Share of result | -43 | -105 | 7 | -40 | -57 | 5 |
| in associates | | | | | | |
--------------------------------------------------------------------------------
| RESULT BEFORE TAX | -655 | -213 | 15 | -233 | -426 | 37 |
--------------------------------------------------------------------------------
| % | -4,0 % | -1,4 % | 0,1 % | -1,8 % | -3,6 % | 0,3 % |
--------------------------------------------------------------------------------
| Tax on income | -155 | -178 | -329 | -58 | -58 | -121 |
| from operations | | | | | | |
--------------------------------------------------------------------------------
| RESULT FOR THE | -810 | -391 | -314 | -291 | -484 | -85 |
| PERIOD | | | | | | |
--------------------------------------------------------------------------------
| % | -4,9 % | -2,6 % | -2,0 % | -2,3 % | -4,1 % | -0,8 % |
--------------------------------------------------------------------------------
GROUP KEY RATIOS
--------------------------------------------------------------------------------
| | 4-6 | 4-6 | 1-6 | 1-6 | 1-12 |
--------------------------------------------------------------------------------
| (EUR million) | 2008 | 2007 | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 16,4 | 11,8 | 31,7 | 22,9 | 51,0 |
--------------------------------------------------------------------------------
| Operating | -0,5 | -0,4 | -0,4 | -0,3 | -0,2 |
| result | | | | | |
--------------------------------------------------------------------------------
| % of Net sales | -2,9 % | -3,5 % | -1,2 % | -1,4 % | -0,3 % |
--------------------------------------------------------------------------------
| Result before | -0,7 | -0,4 | -0,9 | -0,4 | -0,6 |
| taxes | | | | | |
--------------------------------------------------------------------------------
| % of Net sales | -4,0 % | -3,6 % | -2,7 % | -1,7 % | -1,2 % |
--------------------------------------------------------------------------------
| Result for the | -0,8 | -0,5 | -1,2 | -0,6 | -1,2 |
| period | | | | | |
--------------------------------------------------------------------------------
| % of Net sales | -4,9 % | -4,1 % | -3,8 % | -2,5 % | -2,3 % |
--------------------------------------------------------------------------------
| Return on | -22,8 % | -12,7 % | -12,7 % | -3,0 % | -7,9 % |
| equity, % | | | | | |
--------------------------------------------------------------------------------
| Return on | -10,9 % | -4,9 % | -5,0 % | -1,3 % | 1,6 % |
| investment, % | | | | | |
--------------------------------------------------------------------------------
| Interest-beari | 4,2 | 6,6 | 4,2 | 6,6 | 4,3 |
| ng liabilities | | | | | |
--------------------------------------------------------------------------------
| Cash and cash | 3,5 | 10,9 | 3,5 | 10,9 | 5,3 |
| equivalents | | | | | |
--------------------------------------------------------------------------------
| Gearing, % | 5,1 % | -28,6 % | 5,1 % | -28,6 % | -7,3 % |
--------------------------------------------------------------------------------
| Equity-ratio, | 43,1 % | 46,1 % | 43,1 % | 46,1 % | 45,5 % |
| % | | | | | |
--------------------------------------------------------------------------------
| Balance sheet | 31,6 | 33,0 | 31,6 | 33,0 | 32,0 |
| total | | | | | |
--------------------------------------------------------------------------------
| Gross | 0,2 | 0,3 | 0,6 | 0,5 | 3,4 |
| Investments | | | | | |
--------------------------------------------------------------------------------
| % of Net sales | 1,2 % | 2,2 % | 1,8 % | 2,0 % | 6,7 % |
--------------------------------------------------------------------------------
| R & D expenses | 0,4 | 0,4 | 0,9 | 0,8 | 1,7 |
--------------------------------------------------------------------------------
| % of Net sales | 2,7 % | 3,4 % | 2,8 % | 3,6 % | 3,4 % |
--------------------------------------------------------------------------------
| Personnel | 391 | 322 | 388 | 322 | 333 |
| average for | | | | | |
| the period | | | | | |
--------------------------------------------------------------------------------
| Personnel | 396 | 323 | 396 | 323 | 381 |
| average at the | | | | | |
| end of the | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
| Earnings per | -0,013 | -0,008 | -0,020 | -0,009 | -0,019 |
| share, EUR | | | | | |
--------------------------------------------------------------------------------
| Diluted | -0,013 | -0,008 | -0,020 | -0,009 | -0,019 |
| earnings per | | | | | |
| share, EUR | | | | | |
--------------------------------------------------------------------------------
| Equity per | 0,21 | 0,24 | 0,21 | 0,24 | 0,23 |
| share, EUR | | | | | |
--------------------------------------------------------------------------------
| Average share | | | | | |
| number | | | | | |
--------------------------------------------------------------------------------
| Undiluted | 61 961 751 | 61 218 | 61 749 | 61 218 | 61 218 670 |
| | | 670 | 044 | 670 | |
--------------------------------------------------------------------------------
| Diluted | 61 961 751 | 61 221 | 61 749 | 61 220 | 61 219 400 |
| | | 588 | 044 | 129 | |
--------------------------------------------------------------------------------
| Number of | 61 961 751 | 61 218 | 61 961 | 61 218 | 61 218 670 |
| shares at the | | 670 | 751 | 670 | |
| end of the | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
LARGEST SHAREHOLDERS ON JUNE 30, 2008
--------------------------------------------------------------------------------
| Name | Number of | % of all shares |
| | shares | and voting rights |
--------------------------------------------------------------------------------
| Dovregruppen A.S.*) | 6 560 646 | 10.6 |
--------------------------------------------------------------------------------
| Etra-Invest Oy | 6 211 500 | 10.0 |
--------------------------------------------------------------------------------
| Pekka Mäkelä | 2 882 375 | 4.6 |
--------------------------------------------------------------------------------
| Pekka Pere | 2 210 723 | 3.6 |
--------------------------------------------------------------------------------
| Etola Erkki | 2 000 000 | 3.2 |
--------------------------------------------------------------------------------
| Eficor Oyj | 1 860 000 | 3.0 |
--------------------------------------------------------------------------------
| Ilari Koskelo | 1 420 000 | 2.3 |
--------------------------------------------------------------------------------
| Navdata Oy**) | 1 300 000 | 2.1 |
--------------------------------------------------------------------------------
| Thominvest Oy | 1 043 500 | 1.7 |
--------------------------------------------------------------------------------
| Petri Hinkka | 889 500 | 1.4 |
--------------------------------------------------------------------------------
| Rauni Siik | 800 000 | 1.3 |
--------------------------------------------------------------------------------
| Eero Ruokostenpohja | 703 950 | 1.1 |
--------------------------------------------------------------------------------
| Reino Jokinen | 530 000 | 0.9 |
--------------------------------------------------------------------------------
| Hinkka Invest Oy | 509 790 | 0.8 |
--------------------------------------------------------------------------------
| Lars Nyqvist | 479 171 | 0.8 |
--------------------------------------------------------------------------------
| Astea AS | 471 257 | 0.8 |
--------------------------------------------------------------------------------
| Seppo Siik | 455 000 | 0.7 |
--------------------------------------------------------------------------------
| Kefura AB | 430 000 | 0.7 |
--------------------------------------------------------------------------------
| Nordea Pankki Suomi Oyj, nominee reg. | 414 525 | 0.7 |
--------------------------------------------------------------------------------
| Risto Saikko | 402 065 | 0.6 |
--------------------------------------------------------------------------------
*) Birger Flaa holds control over Dovregruppen A.S.
**) Ilari Koskelo holds control over Navdata Oy
