Period January - September 2007, continuing operations of Proha:
- Proha comparative net sales grew by 23% and were EUR 35.5 million (28.8
million in corresponding period 2006).
- The net sales for Dovre Consulting and Services division grew by 21% and were
EUR 32.8 (27.1) million.
- The net sales for Safran Systems division grew by 55% and were EUR 2.9 (1.9)
million.
- The comparative operating result of Proha was EUR -0.5 (-0.1) million.
- The operating result for Dovre Consulting and Services division was EUR 1.5
(1.6) million. The operating result for Safran Systems division was EUR -1.0
(-0.4) million. The operating result for other operations was EUR -1.0 (-1.3)
million.
Period January - September 2007, Proha Group:
- The net sales decreased by 23% due to the divestment on June 30, 2006 and were
EUR 35.5 million (EUR 46.0 million in January - September 2006).
- The operating result improved clearly and was EUR -0.5 million (The operating
result before non-recurring items EUR -3.1 million in January - September 2006).
Period July - September 2007, continuing operations of Proha:
- The net sales increased by 14% and were EUR 12.6 million (EUR 11.1 million in
July - September 2006).
- The net sales of Dovre Consulting and Services division grew by 12% and were
EUR 11.7 (10.5) million.
- The net sales of Safran Systems division grew by 67% and were EUR 0.9 (0.5)
million.
- The operating result of Proha was EUR -0.1 (0.3) million.
- The operating result for Dovre Consulting and Services division was EUR 0.5
(0.7) million. The operating result for Safran Systems division was -0.3 (-0.1)
million. The operating result for other operations was -0.3 (-0.3) million.
PROHA CEO PEKKA PERE
During the first nine months of 2007 Proha has focused on the international
expansion of the business of Dovre Consulting and Services division and in the
development of a new family of products within the Safran Systems division.
During 2007 there have been several new versions and functionalities in both
SafranOne and in Safran Project product families.
The net sales of Dovre Services and Consulting division have continued to grow
in the third quarter of 2007. However, there exists plenty of potential for even
stronger international growth in the markets. Special attention is paid to
improvement of profit margins and resourcing and to opportunities particularly
in North-America.
Safran has invested strongly on product development. The first SafranOne product
launch within the SafranOne family of products was made in June as Proha
introduced the new Safran Portal for Knowledge Projects product at the
International Project Management Association World Congress in Cracow following
with new SafranOne versions and SafranOne Mini Portal products after the summer.
The development of international sales channels has also continued. In addition
to partnership discussions, a new affiliated company Safran North-America LLP
was founded together with its CEO Nick Pisano to sell Safran Products in
North-America and in October Proha acquired Camako Data AB in Sweden. Both
actions strengthen the basis for our international growth
For the last quarter of 2007 the essential themes will remain in strengthening
of international business and utilization of synergies between the divisions.
KEY RATIOS FOR THE CONTINUING OPERATIONS
--------------------------------------------------------------------------------
| (EUR | 7-9 | 7-9 | Change | 1-9 | 1-9 | Change | 1-12 |
| million) | 2007 | 2006 | % | 2007 | 2006 | % | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 12,6 | 11,1 | 14,0 % | 35,5 | 28,8 | 23,0 % | 41,0 |
--------------------------------------------------------------------------------
| Operating | -0,1 | 0,3 | -142,6 | -0,5 | -0,5 | 16,4 % | -0,3 |
| result | | | % | | | | |
--------------------------------------------------------------------------------
| % of net | -1,0 % | 2,7 % | | -1,3 % | -1,9 % | | -0,8 % |
| sales | | | | | | | |
--------------------------------------------------------------------------------
| Result | -0,2 | 0,3 | -181,5 | -0,6 | -0,7 | 7,1 % | -0,6 |
| before | | | % | | | | |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
| Result | -0,3 | 0,1 | -357,6 | -0,9 | -1,1 | 22,0 % | -1,1 |
| for the | | | % | | | | |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Return on | -7,8 % | 3,0 % | | -7,6 % | -9,5 % | | -7,1 % |
| equity % | | | | | | | |
--------------------------------------------------------------------------------
| Return on | -1,1 % | 6,6 % | | -1,3 % | -3,0 % | | -0,5 % |
| investmen | | | | | | | |
| t % | | | | | | | |
--------------------------------------------------------------------------------
| Cash and | 10,1 | 12,4 | -18,8 | 10,1 | 12,4 | -18,8 % | 12,0 |
| cash | | | % | | | | |
| equivalen | | | | | | | |
| ts | | | | | | | |
--------------------------------------------------------------------------------
| Debt-equi | -24,3 | -37,8 | | -24,3 % | -37,8 % | | -38,7 % |
| ty ratio | % | % | | | | | |
| % | | | | | | | |
--------------------------------------------------------------------------------
| Equity-ra | 46,3 % | 48,2 % | | 46,3 % | 48,2 % | | 47,0 % |
| tio % | | | | | | | |
--------------------------------------------------------------------------------
| Basic | -0,005 | 0,002 | -329,3 | -0,014 | -0,018 | 20,6 % | -0,018 |
| earnings | | | % | | | | |
| per | | | | | | | |
| share, | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| Diluted | -0,005 | 0,002 | -329,3 | -0,014 | -0,018 | 20,6 % | -0,018 |
| earnings | | | % | | | | |
| per | | | | | | | |
| share, | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 0,24 | 0,25 | -2,9 % | 0,24 | 0,25 | -2,9 % | 0,25 |
| per | | | | | | | |
| share, | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
KEY RATIOS OF THE PROHA GROUP
--------------------------------------------------------------------------------
| | 7-9 | 7-9 | | 1-9 | 1-9 | | 1-12 |
--------------------------------------------------------------------------------
| (EUR | 2007 | 2006 | Change | 2007 | 2006 | Change % | 2006 |
| million | | | % | | | | |
| ) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net | 12,6 | 11,1 | 14,0 % | 35,5 | 46,0 | -23,0 % | 58,2 |
| sales | | | | | | | |
--------------------------------------------------------------------------------
| Operat- | -0,1 | 0,3 | -142,6 | -0,5 | 11,4 | -104,0 % | 11,6 |
| ing | | | % | | | | |
| result | | | | | | | |
--------------------------------------------------------------------------------
| % of | -1,0 % | 2,7 % | | -1,3 % | 24,8 % | | 20,0 % |
| net | | | | | | | |
| sales | | | | | | | |
--------------------------------------------------------------------------------
| Result | -0,2 | 0,3 | -181,5 | -0,6 | 11,9 | -105,2 % | 12,0 |
| before | | | % | | | | |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
| Result | -0,3 | 0,1 | -357,6 | -0,9 | 11,0 | -107,8 % | 11,0 |
| for the | | | % | | | | |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Return | -7,8 % | 2,9 % | | -7,6 % | 148,2 % | | 111,2 % |
| on | | | | | | | |
| equity | | | | | | | |
| % | | | | | | | |
--------------------------------------------------------------------------------
| Return | -1,1 % | 6,5 % | | -1,2 % | 92,9 % | | 72,8 % |
| on | | | | | | | |
| invest- | | | | | | | |
| ment % | | | | | | | |
--------------------------------------------------------------------------------
| Cash | 10,1 | 12,4 | -18,8 % | 10,1 | 12,4 | -18,8 % | 12,0 |
| and | | | | | | | |
| cash | | | | | | | |
| equi- | | | | | | | |
| valents | | | | | | | |
--------------------------------------------------------------------------------
| Debt-eq | -24,3 | -37,3 | | -24,3 % | -37,3 % | | -38,2 % |
| uity | % | % | | | | | |
| ratio % | | | | | | | |
--------------------------------------------------------------------------------
| Equity- | 46,3 % | 48,5 % | | 46,3 % | 48,5 % | | 47,3 % |
| ratio % | | | | | | | |
--------------------------------------------------------------------------------
| Basic | -0,005 | 0,002 | -329,3 | -0,014 | 0,179 | -108,0 % | 0,179 |
| earning | | | % | | | | |
| s per | | | | | | | |
| share, | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| Diluted | -0,005 | 0,002 | -329,3 | -0,014 | 0,179 | -108,0 % | 0,179 |
| earning | | | % | | | | |
| s per | | | | | | | |
| share, | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 0,24 | 0,25 | -2,9 % | 0,24 | 0,25 | -2,9 % | 0,25 |
| per | | | | | | | |
| share, | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
EVENTS AFTER PERIOD
Proha Acquired Swedish Camako Data AB.
Proha strengthens its position in the Nordic project management markets and
acquires full ownership of the Swedish project management IT consultancy company
Camako Data AB. Camako will become part of the Proha's Safran Systems division.
The purchase price is composed of a fixed price of EUR 725,000 and of a possible
additional purchase price that will be paid based on certain performance
objectives. The fixed part of the purchase price will be paid in two
installments with the first installment of EUR 450,000 was paid in cash at the
closing on October 26, 2007 and the remainder after three months either in cash
or as new Proha Plc shares. The possible additional purchase price will be paid
at latest in 2009 either in cash or in Proha Plc shares. If all performance
objectives are met in full, the additional purchase price will total EUR
375,000.
Camako's estimate for pro forma net sales in 2007 is SEK 10.5 million (EUR 1.2
million) and the operating result slightly positive. The acquisition does not
have a material impact on Proha's net sales in 2007.
Established in 1996 Camako is a project and resource management IT consultancy
company concentrating especially in Microsoft products. Camako employs 8
consultants.
BUSINESS PERFORMANCE
Proha's net sales mainly consist of oil and gas sector project management
business. Dovre Consulting and Services Division accounted for approximately 92%
(94%) and Safran Systems Division 8% (6%) of the net sales of the Group
continuing operations during the period January 1, - September 30, 2007.
Dovre Consulting and Services Division
Dovre Consulting and Services division consists of Norwegian Dovre International
AS and Dovre Fabcon AS together with their international subsidiaries. The
division delivers consulting and services within project management and supply
chain management globally.
During the period January 1 - September 30, 2007, the majority of Dovre
Consulting and Services division business came from oil and gas sector, but the
division companies are also serving a wide range of other industries and
sectors.
The development of Dovre Consulting and Services division has continued
favorably during the first nine months of 2007. In Norway, the merger of Dovre's
two largest customers, Statoil and Norsk Hydro, has advanced as planned and was
finalized on October 1, 2007. Several new projects have been manning up their
project management teams after summer holiday and the activity level remains
high in all markets. Availability of new consultants is limited in the Norwegian
market due to very high demand.
The business operations in Canada have developed as planned. The required shift
in geographical focus of the project operations from North-East Canada to also
include oil sands projects in Alberta has advanced as planned and Dovre's
subsidiary Fabcon Canada has worked successfully towards several new clients in
the period.
In the USA, the project operations within the oil and gas industry have
continued. The third quarter of 2007 has been a busy period with several new
employees and assignments in Singapore, the USA and Spain.
Safran Systems division
Safran Systems business is operated by the parent company, Datamar Oy and
Norwegian Safran Software Solutions AS.
Safran Software Solutions AS develops and sells project management software
specifically for the needs of oil and gas industry, construction and ship
building industry. Safran Software Solutions AS products are now in compliance
with ANSI-748 standard. The Group parent company and Datamar Oy develop and sell
products in the SafranOne family of products, mobile solutions based on
intelligent SMS technology (iSMS) and RescuePlanner applications directed to
safety and rescue operations.
During the period under review the focus areas of Safran Systems division have
been SafranOne software products development as well as building of
international delivery and partnership networks.
On the second quarter of 2007 Safran established a new associated company Safran
North America, LLC with market focus on federal, airspace and defense, energy
and oil & gas industries.
NET SALES
Group, January - September 2007:
Net sales for Proha Group decreased by 23% due to divestment on June 30, 2006
and were EUR 35.5 million (EUR 46.0 million in January - September 2006).
However, the decrease was partially offset by the growth in net sales of Dovre
Consulting and Services and Safran Systems divisions.
Continuing operations, January - September 2007:
Net sales for Proha continuing operations grew by 23% and were EUR 35.5 (28.8)
million. The net sales of Dovre Consulting and Services division grew by 21% and
were EUR 32.8 (27.1) million. The net sales of Safran Systems division grew by
55% and were EUR 2.9 (1.9) million.
Proha Group and continuing operations, July - September 2007:
The net sales for Proha Group grew by 14% and were EUR 12.6 (11.1) million. The
net sales for Dovre Consulting and Services division grew by 12% and were 11.7
(10.5) million. The net sales for Safran systems division grew by 67% and were
EUR 0.9 (0.5) million.
Distribution of net sales for the continuing operations by revenue type (EUR
million and % of net sales):
--------------------------------------------------------------------------------
| | 7-9 | % | 7-9 | % | 1-9 | % | 1-9 | % | 1-12 | % |
--------------------------------------------------------------------------------
| | 200 | | 200 | | 200 | | 2006 | | 2006 | |
| | 7 | | 6 | | 7 | | | | | |
--------------------------------------------------------------------------------
| Service | 12, | 98,4 | 10, | 98,1 | 34, | 97,4 | 28,3 | 98,0 | 40,1 | 97,7 |
| s | 4 | | 8 | | 6 | | | | | |
--------------------------------------------------------------------------------
| One | 0,1 | 0,6 | 0,1 | 0,7 | 0,3 | 0,9 | 0,1 | 0,5 | 0,3 | 0,6 |
| time | | | | | | | | | | |
| license | | | | | | | | | | |
| revenue | | | | | | | | | | |
--------------------------------------------------------------------------------
| Recurri | 0,1 | 1,1 | 0,1 | 1,3 | 0,6 | 1,7 | 0,4 | 1,5 | 0,7 | 1,7 |
| ng | | | | | | | | | | |
| license | | | | | | | | | | |
| revenue | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 12, | 100, | 11, | 100, | 35, | 100, | 28,8 | 100,0 | 41,0 | 100,0 |
| | 6 | 0 | 1 | 0 | 5 | 0 | | | | |
--------------------------------------------------------------------------------
In the period January 1, - September 30, 2007, the service revenue was EUR 34.6
(28.3) million or 97% (98%) of the net sales. In the period January 1, -
September 30, 2007 the license sales amounted to EUR 0.9 (0.5) million,
accounting for 3% (2%) of the net sales.
In the period July 1, - September 30, 2007, the service revenue was EUR 12.4
(10.8) million or 98% (98%) of the net sales. In the period July 1, - September
30, 2007 the license sales amounted to EUR 0.2 (0.2) million, accounting for 2%
(2%) of the net sales.
Distribution of net sales by segment:
--------------------------------------------------------------------------------
| | 7-9 | 7-9 | Change | 1-9 | 1-9 | Change | 1-12 |
--------------------------------------------------------------------------------
| (EUR | 2007 | 2006 | % | 2007 | 2006 | % | 2006 |
| million) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dovre | 11,7 | 10,5 | 11,7 | 32,8 | 27,1 | 21,0 | 38,1 |
--------------------------------------------------------------------------------
| Safran | 0,9 | 0,5 | 66,9 | 2,9 | 1,9 | 55,3 | 3,0 |
--------------------------------------------------------------------------------
| Others | 0,1 | 0,2 | -46,0 | 0,3 | 0,3 | -14,6 | 0,5 |
--------------------------------------------------------------------------------
| Discontinued | 0,0 | 0,0 | | 0,0 | 17,2 | -100,0 | 17,2 |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Net sales | -0,1 | -0,2 | | -0,5 | -0,4 | | -0,6 |
| between | | | | | | | |
| segments | | | | | | | |
--------------------------------------------------------------------------------
| Group total | 12,6 | 11,1 | 14,0 | 35,5 | 46,0 | -23,0 | 58,2 |
--------------------------------------------------------------------------------
Distribution of net sales by geographical segments:
--------------------------------------------------------------------------------
| | 7-9 | 7-9 | 1-9 | 1-9 | 1-12 |
--------------------------------------------------------------------------------
| (EUR million) | 2007 | 2006 | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EMEA | 8,0 | 9,4 | 25,6 | 36,0 | 43,1 |
--------------------------------------------------------------------------------
| AMERICAS | 4,4 | 2,2 | 10,4 | 7,1 | 12,9 |
--------------------------------------------------------------------------------
| APAC | 0,6 | 1,0 | 1,4 | 4,5 | 5,4 |
--------------------------------------------------------------------------------
| Net sales between | -0,3 | -1,5 | -1,9 | -1,5 | -3,2 |
| segments | | | | | |
--------------------------------------------------------------------------------
| Group total | 12,6 | 11,1 | 35,5 | 46,0 | 58,2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 7-9 | 7-9 | 1-9 | 1-9 | 1-12 |
--------------------------------------------------------------------------------
| (% of net sales) | 2007 | 2006 | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EMEA | 63,2 % | 84,9 % | 72,2 % | 78,1 % | 74,0 % |
--------------------------------------------------------------------------------
| AMERICAS | 34,7 % | 19,5 % | 29,3 % | 15,4 % | 22,2 % |
--------------------------------------------------------------------------------
| APAC | 4,7 % | 9,2 % | 3,8 % | 9,9 % | 9,3 % |
--------------------------------------------------------------------------------
| Net sales between | -2,6 % | -13,7 % | -5,3 % | -3,3 % | -5,5 % |
| segments | | | | | |
--------------------------------------------------------------------------------
| Group total | 100,0 % | 100,0 % | 100,0 % | 100,0 % | 100,0 % |
--------------------------------------------------------------------------------
PROFITABILITY
Proha continuing operations, January - September 2007:
The operating result of Proha continuing operations was EUR -0.5 million
(operating result before non-recurring items EUR -0.1 million and after
non-recurring items EUR -0.5 million in corresponding period of 2006). The
operating result of Dovre Consulting and Services Division was EUR 1.5 (1.6)
million. The operating result of Safran Systems Division was EUR -1.0 (-0.4)
million. The operating result for other operations was EUR -1.0 million
(operating result before non-recurring items EUR -1.3 million and after
non-recurring items
EUR -1.8 million in corresponding period of 2006).
Proha Group, January - September 2007:
The operating result of the Group improved materially to EUR -0.5 million
(operating result before non-recurring items EUR -3.1 million and after
non-recurring items EUR 11.4 million in corresponding period of 2006)
Proha Group and continuing operations, July - September 2007:
The operating result of Proha was EUR -0.1 (0.3) million. The operating result
of Dovre Consulting and Services Division was EUR 0.5 (0.7) million. The
operating result of Safran Systems Division was EUR -0.3 (-0.1) million. The
operating result for other operations was EUR -0.3 (-0.3) million.
Distribution of operating result by segment:
--------------------------------------------------------------------------------
| | 7-9 | 7-9 | | 1-9 | 1-9 | | 1-12 |
--------------------------------------------------------------------------------
| (EUR | 2007 | 2006 | Change % | 2007 | 2006 | Change % | 2006 |
| million) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dovre | 0,5 | 0,7 | -32,1 | 1,5 | 1,6 | -8,9 | 2,2 |
--------------------------------------------------------------------------------
| Safran | -0,3 | -0,1 | -160,7 | -1,0 | -0,4 | -134,8 | -0,6 |
--------------------------------------------------------------------------------
| Others | -0,3 | -0,3 | -9,9 | -1,0 | -1,8 | 45,1 | -2,0 |
--------------------------------------------------------------------------------
| Continuing | -0,1 | 0,3 | -142,6 | -0,5 | -0,5 | 16,4 | -0,3 |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Discontinue | 0,0 | 0,0 | | 0,0 | 12,0 | -100,0 | 12,0 |
| d | | | | | | | |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Group total | -0,1 | 0,3 | -142,6 | -0,5 | 11,4 | -104,0 | 11,6 |
--------------------------------------------------------------------------------
Result for January 1, - September 30, 2007:
In the period January 1, - September 30 2007, the result before tax for Proha
Group was EUR -0.6 (11.9) million and after tax EUR -0.9 (11.0) million. For the
continuing operations the result before taxes was EUR -0.6 (-0.7) million and
result after tax was EUR -0.9 (-1.1) million.
Earnings per share:
Group earnings per share was EUR -0.01 (0.18). For the continuing operations the
earnings per share were EUR -0.01 (-0.02).
Group return on investment (ROI) was -1.2% (92.9%). The return on investment
(ROI) for the continuing operations was -1.3% (-3.0%).
CASH FLOW, FINANCING AND INVESTMENTS
On September 30, 2007, the Group balance sheet total was EUR 32.5 (31.9)
million.
On September 30, 2007, the cash and cash equivalents for the Group totaled EUR
10.1 (12.4) million.
In the period January 1, - September 30, 2007, cash flow from operating
activities was EUR -1.3 (-1.0) million. The cash flow from operating activities
was decreased by the increase of EUR 1.2 million in net working capital.
The cash flow of investments was EUR -0.6 (4.6) million in the period January 1,
- September 30, 2007. The gross investments totaled EUR 0.5 (2.1) million. The
gross investments include capitalized software development expenses of EUR 0.3
(0.0) million.
The balance sheet goodwill totaled EUR 5.1 (4.7) million on September 30, 2007.
The Group's goodwill is not amortized but tested for impairment under IAS 36. No
indications of impairment of assets exist.
In the period January 1, - September 30, 2007, the cash flow of financing
activities was EUR 0,0 (1.5) million. Total of EUR 0.9 (0.5) million new loans
were drawn. A total of EUR 0.9 (0.5) million loans were repaid.
Group equity ratio was 46.3% (48.5%) and debt to equity ratio was -24.3%
(-37.3%). On September 30, 2007, the interest-bearing liabilities amounted to
EUR 6.4 (6.7) million, accounting for 19.8 % (21.0%) of the Group's
shareholders' equity and liabilities total. Of the interest-bearing liabilities,
EUR 1.8 (5.7) million were non-current liabilities and EUR 4.6 (0.9) million
current liabilities. The Group's Quick Ratio was 1.7 (2.4).
RESEARCH AND DEVELOPMENT
The research and development expenses for the Group continuing operations were
EUR 1.4 (0.6) million accounting for 4% (2%) of the net sales of the continuing
operations. In the period January 1, - September 30, 2006, the research and
development expenses EUR 3.6 million consisted of EUR 0.6 million of the
research and development expenses for the continuing operations and EUR 3.0
million of the research and development expenses for the discontinued
operations. In the period January 1, - September 30, 2007, EUR 0.3 (0.0) million
of research and development costs were capitalized.
During the period under review, a new version of SafranOne technical platform
was released. SafranOne is used as the platform for the separate Safran portal
solutions.
In May, 2007 the international central organization of project management
associations IPMA (International Project Management Association) chose SafranOne
solution developed by Proha as its medium for member communication and Internet
platform. Also IPMA's intranet and extranet functions such as documents
distribution and common calendar are managed by SafranOne.
In June 2007, Proha launched its new project management portal solution at the
International Project Management Association World Congress in Cracow. After the
summer, also new SafranOne versions and Safran Mini Portal products have been
introduced.
The further development of Proha's Safran Project and Safran for Microsoft
Project continued as planned.
The implementation project at Oulu-Koillismaa rescue department is proceeding
according to plan for RescuePlanner developed by Proha for resource management
at rescue departments. The application of Proha's mobile solution is extended at
Helsinki Rescue department also for urgent communication between various
authorities.
PERSONNEL
In January 1, - September 30, 2007, the staff costs for the Group and continuing
operations amounted to EUR 32.9 million and EUR 11.7 million in July 1, -
September 30, 2007. For the continuing operations the staff costs constituted
93% (93%) of the net sales for the period January 1, - September 30, 2007, and
93% (92%) for the period July 1, - September 30, 2007. In January 1, - September
30, 2006, the Group staff costs EUR 38.9 million constituted of EUR 26.7 million
of the staff costs of the continuing operations and EUR 12.2 million of the
staff costs of the discontinued operations.
Distribution of personnel by segment (average):
--------------------------------------------------------------------------------
| | 7-9 | 7-9 | | 1-9 | 1-9 | | 1-12/ |
--------------------------------------------------------------------------------
| Personnel | 2007 | 2006 | Change % | 2007 | 2006 | Change % | 2006 |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Dovre | 276 | 266 | 3,8 | 267 | 228 | 17,2 | 237 |
--------------------------------------------------------------------------------
| Safran | 51 | 46 | 10,1 | 52 | 44 | 18,7 | 46 |
--------------------------------------------------------------------------------
| Other | 6 | 9 | -33,3 | 6 | 9 | -32,9 | 18 |
--------------------------------------------------------------------------------
| Discontinue | | | | | | | |
| d | | | | | | | |
--------------------------------------------------------------------------------
| operations | | | | 0 | 192 | -100,0 | 168 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 333 | 321 | 3,6 | 325 | 473 | -31,2 | 469 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
On September 30, 2007, the Proha Group employed 333 (325) people worldwide. The
average number of Group personnel was 325 (473) for the period January 1, -
September 30, 2007.
DECISIONS OF PROHA ANNUAL GENERAL MEETING OF SHAREHOLDERS
On April 18, 2007 the Annual General Meeting of Proha Plc made the following
decisions:
1. The issues inherent to the Annual General Meeting under section 11 of the
Articles of Association
The Annual General Meeting confirmed the 2006 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 transferred to profit/loss brought forward account and no
dividend is paid.
The Annual General Meeting decided to alter the number of Board members to four.
Proha CEO Pekka Pere and Pekka Mäkelä resigned from the Board. Mr. Gjalt de
Vries was elected as a new member to the Board. Mr. de Vries is a citizen of the
Netherlands. Olof Ödman, Birger Flaa and Ernst Jilderda continue as members of
the Proha Board.
The Annual General Meeting decided that, following the present practice, the
Chairman of the Board be paid EUR 18,000 and each Board member, at the moment of
election not employed by the Proha Group or by such company which owns more than
five percents of Proha's share capital and who does not exercise dominant
influence over such company, to be paid EUR 10,000 per year as remuneration for
board work. Additionally, it was decided that the auditors will be paid in
accordance with a reasonable invoice.
Ernst & Young Oy was elected to continue as the Company's auditor, with Ulla
Nykky, APA, as the auditor in charge.
2. Amendment of the Articles of Association
The Annual General Meeting decided to amend the Articles of Association due to
the new Companies Act, effective as of September 1, 2006 as proposed by the
Board as follows:
- Article 4 containing provisions on minimum and maximum share capital as well
as the number of shares was removed.
- The provisions on record date from Article 5 were removed.
- The provisions in Article 8 on the right to represent the Company were amended
to align with the terminology of the new law.
- The list of agenda items of the Annual General Meeting in Article 11 was
amended to correspond to the new law.
- The provisions in Article 13 on the notice period of the Annual General
Meeting were amended to the effect that the notice must be published no earlier
than three (3) months prior to the latest date of registration. Also the method
of notice is amended so that as an alternative to publishing the notice in a
nationally published newspaper, the notice can be sent in writing. Previously,
the alternative method of notice has been a registered letter.
In addition, the Company's field of business (Article 3) was expanded to include
consulting in business management and engineering. The new articles of
association were presented in the appendix of stock exchange bulletin on March
28, 2007.
3. Recording the subscription prices for shares issued based on stock options in
the fund for invested non-restricted equity
The Annual General Meeting decided to complete the terms and conditions of Proha
Stock Option Plans 2005 and 2006 to the effect that the total amount of the
subscription prices paid for new shares issued after the date of the General
Meeting, based on stock options under Plans 2005 and 2006, be recorded in the
fund for invested non-restricted equity.
4. Option rights to key personnel and Board of Directors
The Annual General Meeting approved without changes the Board proposition to
issue a maximum of 2,110,000 option rights that are offered deviating from the
shareholders' pre-emptive subscription right to the Board of Directors and to
the key personnel of the Group companies.
The subscription of the option rights began immediately and will end on April
17, 2008. The proposed share subscription price will be the weighted average
price of Proha share within the period of 30 days before the General Meeting,
from March 19 through April 17, 2007, i.e. EUR 0.37. The exercise period of the
option rights for share subscription will commence in steps between years 2008
and 2010 and will end on May 31, 2011. If only newly issued shares are used for
share subscriptions, the shares subscribed under the Stock Option Plan 2007
constitute a maximum of 3.33 percent of the total number of Proha shares after
the subscription. The complete terms and conditions are presented in the
appendix of stock exchange bulletin on March 28, 2007.
5. Board of Directors' proposal to authorize the Board of Directors to resolve
on the issuance of shares and special rights entitling to shares
The Annual General Meeting 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 stock options) 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 may be used to finance or execute acquisitions or other
arrangements, to carry out equity-based incentive plans, or to other purposes
resolved by the Board. The authorization includes the right for the Board to
decide on all the terms and conditions of the issuance of shares or special
rights under Chapter 10, Section 1 of the Companies Act, including to whom
shares or special rights may be issued as well as the consideration to be paid.
The authorization thereby includes the right for issuance in deviation from the
shareholders' pre-emptive rights within the limits set by law.
The authorization is effective until April 17, 2012.
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 two exceptions from the recommendation: 1) Proha Board of Directors
comprises of four members and 2) A share-based bonus system may also be applied
to those members of the Board, who do not have an employment relationship with
the company. Proha's corporate governance principles can be found on the
company's website at www.proha.com.
SHARE CAPITAL AND AUTHORIZATIONS TO ISSUE SHARES
Proha Plc has one class of shares. The book value of the shares is EUR 0.26 per
share. Each share entitles the shareholder to one vote. Proha Plc shares are
traded on the Nordic Exchange of OMX Group.
On January 1, 2007, the subscribed capital of Proha Plc was EUR 15,916,854.20
and the number of shares is 61,218,670. No changes were made on the share
capital during the period under review.
No shares were subscribed for with Proha Plc's option during the period under
review.
The option plans 2002 and 2003 ended on April 1, 2007. A total of 500 shares
were subscribed for under the plan 2002 and no shares were subscribed for under
the plan 2003.
The Annual General Meeting 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 stock options) 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.
The Annual General Meeting approved without changes the Board proposition to
issue a maximum of 2,110,000 option rights that are offered deviating from the
shareholders' pre-emptive subscription right to the Board of Directors and to
the key personnel of the Group companies.
In its meeting on June 28, 2007, Proha Board of Directors approved subscriptions
of the option issue. A total of 1,707,000 Proha Plc stock options were
subscribed, entitling to the subscription of 1,707,000 shares.
The subscription of the option rights began on April 18, 2007 and will end on
April 17, 2008. The share subscription price is EUR 0.37 i.e. the weighted
average price of Proha share within the period of 30 days before the General
Meeting, from March 19 through April 17, 2007. The exercise period of the option
rights for share subscription will commence in steps between years 2008 and 2010
and will end on May 31, 2011. The complete terms and conditions are presented in
the appendix of stock exchange bulletin on March 28, 2007.
TRADING ON THE HELSINKI STOCK EXCHANGE
The number of registered shareholders of Proha Plc totaled 3,513 on September
30, 2007. In the period January 1, - September 30, 2007, the share price was EUR
0.30 at its lowest and EUR 0.45 at its highest. The closing price on September
28, 2007 was EUR 0.31. Market capitalization was approximately EUR 19.0 million
at the end of the period under review. The trading volume of the Proha share on
the OMX Nordic Exchange was approximately EUR 11.9 million during the period
under review. Proha Plc has liquidity providing agreement with Remium AB for the
Proha share.
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 Consulting and Services division. The
companies operating in oil and gas industry are challenged also by the adequacy
of resources and added personnel turnover.
General competitive situation and technological solutions developed by the
competition impact the business of Safran Systems division. The profitable
growth for Safran business call for successful creation of international
distribution and partner networks.
The development of Proha's international business includes also possible
acquisitions and shareholdings in companies operating in the field. Such
strategic acquisitions always include risks. They are being managed, among
others, by ensuring that the size of acquisitions is reasonable.
PROSPECTS FOR 2007
Proha seeks international growth and profitability by concentrating on project
management services and software and by emphasizing the synergies between the
group businesses. Though the focus of Proha service business will continue to
be in demanding oil and gas industry companies and projects, the company will
also expand the business operations of both divisions also in other industries.
The high energy prices and strong demand are anticipated to continue. They will
keep the number of international investments in the field high. The development
of Proha's present software business is impacted by the general development of
IT markets and, following the new partnership strategy, by the advancement of
Microsoft's new products in the markets. The recent acquisition of Camako Data
AB in October 2007 will make Proha's Safran Division the leading Microsoft
Project Management partner in Finland, Sweden and Norway and strengthen the
basis for our international expansion.
The general outlook remains good for business development of Dovre Consulting
and Services division. The consulting and services business is anticipated to
continue developing favorably. The recruiting of experienced consultants will
continue to be challenging and as a result there is higher turnover in the
market.
The profitability of Dovre Consulting and Services division is anticipated to
remain on the same level as in 2006. With the recent Safran Product
introductions the focus areas of Safran Systems division will remain in
continuing software products development as well as in expanding the
international delivery and partnership networks. To strengthen the network
Proha's Growth Ventures operations aim to continue strategic acquisition at a
low risk level that will create basis for rapid growth in the future around the
world.
In 2007 the comparable net sales of the Group are anticipated to grow from the
previous year. The profitability of Dovre Consulting and Services division is
anticipated to remain on the same level as in 2006. Due to investments made by
Safran Systems division its operating result will remain negative. The Group
administrative expenses are anticipated to decline slightly from the level of
2006. The Group operating result for 2007 is anticipated to be slightly
negative.
The above prospects are based on forecasts approved by Proha Board.
Espoo, November 1, 2007
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 November 1, 2007 at 12.00 a.m., in Marskin Sali at
World Trade Center, address Aleksanterinkatu 17, Helsinki.
More information
PROHA PLC
CEO Pekka Pere, tel +358 (0)20 4362 000
pekka.pere@proha.com
www.proha.com
DISTRIBUTION:
Helsinki Stock Exchange
Major Media
GROUP INCOME STATEMENT
--------------------------------------------------------------------------------
| CONTINUING OPERATIONS | | | | | | |
--------------------------------------------------------------------------------
| | 7-9 | 7-9 | Chang | 1-9 | 1-9 | Change | 1-12 |
| | | | e | | | | |
--------------------------------------------------------------------------------
| (EUR | 2007 | 2006 | % | 2007 | 2006 | % | 2006 |
| thousand) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES | 12 | 11 058 | 14,0 | 35 464 | 28 838 | 23,0 | 41 021 |
| | 601 | | | | | | |
--------------------------------------------------------------------------------
| Other | 7 | 46 | -83,7 | 39 | 223 | -82,5 | 392 |
| operating | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Gain on | | | | | -472 | 100,0 | -472 |
| disposal of | | | | | | | |
| discontinued | | | | | | | |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Material and | -42 | 76 | 155,5 | -83 | -50 | 66,1 | -85 |
| services | | | | | | | |
--------------------------------------------------------------------------------
| Employee | -11 | -10 | 15,5 | -32 | -26 683 | 23,1 | -37 887 |
| benefits | 730 | 159 | | 850 | | | |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | -105 | -101 | 3,7 | -293 | -279 | 5,0 | -374 |
| and | | | | | | | |
| amortisation | | | | | | | |
--------------------------------------------------------------------------------
| Other | -858 | -621 | 38,0 | -2 733 | -2 123 | 28,8 | -2 920 |
| operating | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| OPERATING | -127 | 299 | -142, | -457 | -547 | 16,4 | -326 |
| RESULT | | | 6 | | | | |
--------------------------------------------------------------------------------
| Financing | 106 | 56 | 88,1 | 349 | 71 | 393,4 | 222 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Financing | -172 | -69 | 147,5 | -423 | -194 | 118,0 | -539 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Share of | -40 | | | -92 | | | -2 |
| result in | | | | | | | |
| associates | | | | | | | |
--------------------------------------------------------------------------------
| RESULT BEFORE | -233 | 286 | -181, | -622 | -670 | 7,1 | -645 |
| TAX | | | 5 | | | | |
--------------------------------------------------------------------------------
| Tax on income | -58 | -173 | -66,5 | -237 | -432 | -45,1 | -455 |
| from | | | | | | | |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| RESULT FOR | -291 | 113 | -357, | -860 | -1 102 | 22,0 | -1 100 |
| THE PERIOD | | | 6 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ALLOCATION OF | | | | | | | |
| RESULT FOR | | | | | | | |
| THE PERIOD | | | | | | | |
--------------------------------------------------------------------------------
| Result | -296 | 129 | -329, | -874 | -1 100 | 20,6 | -1 108 |
| attributable | | | 3 | | | | |
| to equity | | | | | | | |
| holders of | | | | | | | |
| the parent | | | | | | | |
--------------------------------------------------------------------------------
| Result | 5 | -16 | 131,8 | 14 | -2 | | 8 |
| attributable | | | | | | | |
| to minority | | | | | | | |
| interest | | | | | | | |
--------------------------------------------------------------------------------
| | -291 | 113 | -357, | -860 | -1 102 | 22,0 | -1 100 |
| | | | 6 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings/shar | -0,00 | 0,002 | -329, | -0,014 | -0,018 | 20,6 | -0,018 |
| e | 5 | | 3 | | | | |
| (undiluted), | | | | | | | |
| Euro | | | | | | | |
--------------------------------------------------------------------------------
| Earnings/shar | -0,00 | 0,002 | -329, | -0,014 | -0,018 | 20,6 | -0,018 |
| e (diluted), | 5 | | 3 | | | | |
| Euro | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| DISCONTINUED OPERATIONS | | | | | |
--------------------------------------------------------------------------------
| | 7-9 | 7-9 | Chang | 1-9 | 1-9 | Change | 1-12 |
| | | | e | | | | |
--------------------------------------------------------------------------------
| (EUR | 2007 | 2006 | % | 2007 | 2006 | % | 2006 |
| thousand) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES | | | | | 17 195 | -100,0 | 17 195 |
--------------------------------------------------------------------------------
| Other | | | | | 116 | -100,0 | 116 |
| operating | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Gain on | | | | | 15 006 | -100,0 | 15 006 |
| disposal of | | | | | | | |
| discontinued | | | | | | | |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Material and | | | | | -1 744 | -100,0 | -1 744 |
| services | | | | | | | |
--------------------------------------------------------------------------------
| Employee | | | | | -12 210 | -100,0 | -12 210 |
| benefits | | | | | | | |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | -6 402 | -100,0 | -6 402 |
| operating | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| OPERATING | | | | | 11 961 | -100,0 | 11 961 |
| RESULT | | | | | | | |
--------------------------------------------------------------------------------
| Financing | | | | | 1 004 | -100,0 | 1 004 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Financing | | | | | -369 | -100,0 | -369 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| RESULT BEFORE | | | | | 12 596 | -100,0 | 12 596 |
| TAX | | | | | | | |
--------------------------------------------------------------------------------
| Tax on income | | | | | -489 | -100,0 | -489 |
| from | | | | | | | |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| RESULT FOR | | | | | 12 106 | -100,0 | 12 106 |
| THE PERIOD | | | | | | | |
--------------------------------------------------------------------------------
| ALLOCATION OF | | | | | | | |
| RESULT FOR | | | | | | | |
| THE PERIOD: | | | | | | | |
--------------------------------------------------------------------------------
| Result | | | | | 12 070 | -100,0 | 12 070 |
| attributable | | | | | | | |
| to equity | | | | | | | |
| holders of | | | | | | | |
| the parent | | | | | | | |
--------------------------------------------------------------------------------
| Result | | | | | 36 | -100,0 | 36 |
| attributable | | | | | | | |
| to minority | | | | | | | |
| interest | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | 12 106 | -100,0 | 12 106 |
--------------------------------------------------------------------------------
| Earnings/share | | | | 0,197 | | 0,197 |
| (undiluted), Euro | | | | | | |
--------------------------------------------------------------------------------
| Earnings/s | | | | | 0,197 | | 0,197 |
| hare | | | | | | | |
| (diluted), | | | | | | | |
| Euro | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP | | | | | | | |
| TOTAL | | | | | | | |
--------------------------------------------------------------------------------
| | 7-9 | 7-9 | Chang | 1-9 | 1-9 | Change | 1-12 |
| | | | e | | | | |
--------------------------------------------------------------------------------
| (EUR | 2007 | 2006 | % | 2007 | 2006 | % | 2006 |
| thousand) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES | 12 601 | 11 058 | 14,0 | 35 464 | 46 032 | -23,0 | 58 215 |
--------------------------------------------------------------------------------
| Other | 7 | 46 | -83,7 | 39 | 339 | -88,5 | 508 |
| operating | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Gain on | | | | | 14 534 | -100,0 | 14 534 |
| disposal | | | | | | | |
| of | | | | | | | |
| discontinu | | | | | | | |
| ed | | | | | | | |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Material | -42 | 76 | 155,5 | -83 | -1 794 | -95,4 | -1 829 |
| and | | | | | | | |
| services | | | | | | | |
--------------------------------------------------------------------------------
| Employee | -11 730 | -10 | 15,5 | -32 | -38 893 | -15,5 | -50 097 |
| benefits | | 159 | | 850 | | | |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Depreciati | -105 | -101 | 3,7 | -293 | -279 | 5,0 | -374 |
| on and | | | | | | | |
| amortisati | | | | | | | |
| on | | | | | | | |
--------------------------------------------------------------------------------
| Other | -858 | -621 | 38,0 | -2 733 | -8 525 | -67,9 | -9 322 |
| operating | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| OPERATING | -127 | 299 | -142, | -457 | 11 413 | -104,0 | 11 635 |
| RESULT | | | 6 | | | | |
--------------------------------------------------------------------------------
| Financing | 106 | 56 | 88,1 | 349 | 1 075 | -67,5 | 1 227 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Financing | -172 | -69 | 147,5 | -423 | -563 | -25,0 | -908 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Share of | -40 | | | -92 | | | -2 |
| result in | | | | | | | |
| associates | | | | | | | |
--------------------------------------------------------------------------------
| RESULT | -233 | 286 | -181, | -622 | 11 925 | -105,2 | 11 951 |
| BEFORE TAX | | | 5 | | | | |
--------------------------------------------------------------------------------
| Tax on | -58 | -173 | -66,5 | -237 | -921 | -74,2 | -944 |
| income | | | | | | | |
| from | | | | | | | |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| RESULT FOR | -291 | 113 | -357, | -860 | 11 004 | -107,8 | 11 007 |
| THE PERIOD | | | 6 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ALLOCATION | | | | | | | |
| OF RESULT | | | | | | | |
| FOR THE | | | | | | | |
| PERIOD | | | | | | | |
--------------------------------------------------------------------------------
| Result | -296 | 129,0 | -329, | -874 | 10 970 | -108,0 | 10 962 |
| attributab | | | 3 | | | | |
| le to | | | | | | | |
| equity | | | | | | | |
| holders of | | | | | | | |
| the parent | | | | | | | |
--------------------------------------------------------------------------------
| Result | 5 | -16 | 131,8 | 14 | 34 | -59,2 | 45 |
| attributab | | | | | | | |
| le to | | | | | | | |
| minority | | | | | | | |
| interest | | | | | | | |
--------------------------------------------------------------------------------
| | -291 | 113 | -357, | -860 | 11 004 | -107,8 | 11 007 |
| | | | 6 | | | | |
--------------------------------------------------------------------------------
| Earnings/s | -0,005 | 0,002 | -329, | -0,014 | 0,179 | -108,0 | 0,179 |
| hare | | | 3 | | | | |
| (undiluted | | | | | | | |
| ), Euro | | | | | | | |
--------------------------------------------------------------------------------
| Earnings/s | -0,005 | 0,002 | -329, | -0,014 | 0,179 | -108,0 | 0,179 |
| hare | | | 3 | | | | |
| (diluted), | | | | | | | |
| Euro | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP BALANCE SHEET | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 30.9. | 30.9. | | 31.12. |
--------------------------------------------------------------------------------
| (EUR thousand) | 2007 | 2006 | Change % | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Intangible assets | 2 174 | 2 070 | 5,0 | 1 999 |
--------------------------------------------------------------------------------
| Goodwill | 5 074 | 4 730 | 7,3 | 4 758 |
--------------------------------------------------------------------------------
| Tangible assets | 264 | 229 | 14,9 | 216 |
--------------------------------------------------------------------------------
| Investments in associates | 968 | 962 | 0,7 | 982 |
--------------------------------------------------------------------------------
| Trade receivables and | | | | |
--------------------------------------------------------------------------------
| other receivables | 329 | 89 | 269,9 | 130 |
--------------------------------------------------------------------------------
| Available-for-sale | | | | |
--------------------------------------------------------------------------------
| investments | 49 | 39 | 24,9 | 36 |
--------------------------------------------------------------------------------
| Deferred tax asset | 234 | 94 | 149,4 | 208 |
--------------------------------------------------------------------------------
| Non-current assets | 9 091 | 8 213 | 10,7 | 8 328 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Trade receivables and | | | | |
--------------------------------------------------------------------------------
| other receivables | 13 353 | 11 251 | 18,7 | 12 339 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 10 056 | 12 387 | -18,8 | 12 022 |
--------------------------------------------------------------------------------
| Current assets | 23 409 | 23 638 | -1,0 | 24 361 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL ASSETS | 32 500 | 31 851 | 2,0 | 32 689 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 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 other reserves | 353 | 380 | -7,2 | 368 |
--------------------------------------------------------------------------------
| Translation differences | 401 | 82 | 391,1 | 38 |
--------------------------------------------------------------------------------
| Retained earnings | -6 271 | -5 533 | -13,3 | -5 497 |
--------------------------------------------------------------------------------
| Equity attributable to | | | | |
--------------------------------------------------------------------------------
| equity holders of the | 14 778 | 15 224 | -2,9 | 15 205 |
| parent | | | | |
--------------------------------------------------------------------------------
| Minority interest | 114 | 101 | 13,1 | 112 |
--------------------------------------------------------------------------------
| Shareholders' equity | 14 892 | 15 325 | -2,8 | 15 316 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Deferred tax liability | 499 | 507 | -1,6 | 491 |
--------------------------------------------------------------------------------
| Long-term liabilities, | | | | |
--------------------------------------------------------------------------------
| interest-bearing | 1 794 | 5 724 | -68,7 | 1 958 |
--------------------------------------------------------------------------------
| Liabilities from defined | | | | |
--------------------------------------------------------------------------------
| benefit plan | 716 | 142 | 403,6 | 379 |
--------------------------------------------------------------------------------
| Non-current liabilities | 3 008 | 6 373 | -52,8 | 2 828 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Short-term interest- | | | | |
--------------------------------------------------------------------------------
| bearing liabilities | 4 642 | 950 | 388,7 | 4 205 |
--------------------------------------------------------------------------------
| Trade payables and other | | | | |
--------------------------------------------------------------------------------
| liabilities | 9 462 | 8 601 | 10,0 | 9 783 |
--------------------------------------------------------------------------------
| Tax liability, income tax | 495 | 602 | -17,9 | 556 |
--------------------------------------------------------------------------------
| Current liabilities | 14 599 | 10 153 | 43,8 | 14 545 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL EQUITY AND LIABILITIES | 32 500 | 31 851 | 2,0 | 32 689 |
--------------------------------------------------------------------------------
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 1-9/2007
1) Share capital
2) Share premium account
3) Revaluation reserve
4) Translation difference
5) Retained earnings
6) Equity attributable to equity holders of the parent
7) Minority interest
8) Shareholders' equity total
--------------------------------------------------------------------------------
| (EUR | 1) | 2) | 3) | 4) | 5) | 6) | 7) | 8) |
| thousand) | | | | | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDE | 15 | 4 379 | 368 | 38 | -5 497 | 15 205 | 112 | 15 316 |
| RS' EQUITY | 917 | | | | | | | |
| 1.1.2007 | | | | | | | | |
--------------------------------------------------------------------------------
| Change in | 0 | 0 | 25 | 363 | -12 | 376 | -12 | 364 |
| translatio | | | | | | | | |
| n | | | | | | | | |
| difference | | | | | | | | |
| s | | | | | | | | |
--------------------------------------------------------------------------------
| Share | 0 | 0 | 0 | 0 | 72 | 72 | 0 | 72 |
| based | | | | | | | | |
| payments | | | | | | | | |
--------------------------------------------------------------------------------
| Transfers | | | -40 | | 40 | | 0 | 0 |
| between | | | | | | | | |
| items | | | | | | | | |
--------------------------------------------------------------------------------
| NET | 0 | 0 | -15 | 363 | 99 | 447 | -12 | 436 |
| PROFITS | | | | | | | | |
| /LOSSES | | | | | | | | |
| RECOGNIZED | | | | | | | | |
| DIRECTLY | | | | | | | | |
| TO | | | | | | | | |
| SHAREHOLDE | | | | | | | | |
| RS' EQUITY | | | | | | | | |
--------------------------------------------------------------------------------
| Result for | 0 | 0 | 0 | 0 | -874 | -874 | 14 | -860 |
| the period | | | | | | | | |
--------------------------------------------------------------------------------
| TOTAL | 0 | 0 | -15 | 363 | -774 | -426 | 2 | -424 |
| PROFITS | | | | | | | | |
| AND LOSSES | | | | | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDE | 15 | 4 379 | 353 | 401 | -6 271 | 14 778 | 114 | 14 892 |
| RS' EQUITY | 917 | | | | | | | |
| 30.9.2007 | | | | | | | | |
--------------------------------------------------------------------------------
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 1-9/2006
--------------------------------------------------------------------------------
| (EUR | 1) | 2) | 3) | 4) | 5) | 6) | 7) | 8) |
| thousand) | | | | | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDE | 15 | 4 | 430 | 463 | -17 219 | 4 400 | 73 | 4 473 |
| RS' EQUITY | 917 | 808 | | | | | | |
| 1.1.2006 | | | | | | | | |
--------------------------------------------------------------------------------
| Change in | | | -14 | -137 | -48 | -199 | 1 | -198 |
| translatio | | | | | | | | |
| n | | | | | | | | |
| difference | | | | | | | | |
| s | | | | | | | | |
--------------------------------------------------------------------------------
| Share | | | | | 53 | 53 | | 53 |
| based | | | | | | | | |
| payments | | | | | | | | |
--------------------------------------------------------------------------------
| Transfers | | | -37 | | 37 | | | |
| between | | | | | | | | |
| items | | | | | | | | |
--------------------------------------------------------------------------------
| Disposal | | -429 | | -244 | 673 | | -50 | -50 |
| of Artemis | | | | | | | | |
--------------------------------------------------------------------------------
| Fabcon | | | | | | | 57 | 57 |
| acquisitio | | | | | | | | |
| n | | | | | | | | |
--------------------------------------------------------------------------------
| NET | | -429 | -51 | -381 | 715 | -146 | 8 | -138 |
| PROFITS | | | | | | | | |
| /LOSSES | | | | | | | | |
| RECOGNIZED | | | | | | | | |
| DIRECTLY | | | | | | | | |
| TO | | | | | | | | |
| SHAREHOLDE | | | | | | | | |
| RS' EQUITY | | | | | | | | |
--------------------------------------------------------------------------------
| Result for | | | | | 10 970 | 10 970 | 34 | 11 004 |
| the period | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | | -15 | -15 |
| distributi | | | | | | | | |
| on | | | | | | | | |
--------------------------------------------------------------------------------
| TOTAL | | -429 | -51 | -381 | 11 685 | 10 824 | 28 | 10 852 |
| PROFITS | | | | | | | | |
| AND LOSSES | | | | | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDE | 15 | 4 | 380 | 82 | -5 533 | 15 224 | 101 | 15 325 |
| RS' EQUITY | 917 | 379 | | | | | | |
| 30.9.2006 | | | | | | | | |
--------------------------------------------------------------------------------
GROUP CASH FLOW STATEMENT
--------------------------------------------------------------------------------
| (EUR thousand) | 1-9 | 1-9 | 1-12 |
| | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from operating activities | | |
--------------------------------------------------------------------------------
| | Operating result | -457 | 11 413 | 11 635 |
--------------------------------------------------------------------------------
| | Adjustments: | | | |
--------------------------------------------------------------------------------
| | | Discontinued operations | | -11 292 | -11 292 |
--------------------------------------------------------------------------------
| | | Other operating income | | | -71 |
--------------------------------------------------------------------------------
| | | Employee benefits expense | 278 | 53 | 319 |
--------------------------------------------------------------------------------
| | | Depreciation and | 293 | 279 | 374 |
| | | amortisation | | | |
--------------------------------------------------------------------------------
| | | Other adjustments | | -93 | -99 |
--------------------------------------------------------------------------------
| | Adjustments, total | 571 | -11 053 | -10 769 |
--------------------------------------------------------------------------------
| | Change in net working capital | | | |
--------------------------------------------------------------------------------
| | | Increase (-) / decrease | -787 | -1 613 | -3 860 |
| | | (+)in current receivables | | | |
--------------------------------------------------------------------------------
| | | Increase (+) / decrease | -447 | 581 | 3 045 |
| | | (-)in current liabilities | | | |
--------------------------------------------------------------------------------
| | | Other adjustments | | -114 | |
--------------------------------------------------------------------------------
| | Change in net working capital, | -1 234 | -1 145 | -815 |
| | total | | | |
--------------------------------------------------------------------------------
| | Interest paid | -171 | -170 | -555 |
--------------------------------------------------------------------------------
| | Interest received | 366 | 74 | 267 |
--------------------------------------------------------------------------------
| | Other financial expenses paid | -37 | -353 | -355 |
--------------------------------------------------------------------------------
| | Other financial income received | 8 | 398 | 373 |
--------------------------------------------------------------------------------
| | Income taxes paid | -379 | -115 | -353 |
--------------------------------------------------------------------------------
| Cash flow from operating activities | -1 333 | -951 | -572 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities | | |
--------------------------------------------------------------------------------
| | Investments in tangible and | -401 | -27 | -36 |
| | intangible assets | | | |
--------------------------------------------------------------------------------
| | Acquisition of subsidiaries net | | -1 949 | -1 949 |
| | cash acquired | | | |
--------------------------------------------------------------------------------
| | Investments in associates | -69 | | -23 |
--------------------------------------------------------------------------------
| | Investments in other investments | -12 | | |
--------------------------------------------------------------------------------
| | Proceeds from disposal of | | 6 579 | 6 579 |
| | subsidiaries net cash disposed of | | | |
--------------------------------------------------------------------------------
| | Proceeds from other investments | 74 | | |
--------------------------------------------------------------------------------
| | Proceeds (-) and repayments (+) of | -199 | 19 | -118 |
| | loan receivables | | | |
--------------------------------------------------------------------------------
| | Dividends received | 2 | 2 | 2 |
--------------------------------------------------------------------------------
| Cash flow from investing activities | -606 | 4 624 | 4 455 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing activities | | |
--------------------------------------------------------------------------------
| | Proceeds from short-term loans | 931 | 504 | 579 |
--------------------------------------------------------------------------------
| | Repayments of short-term loans | -945 | -483 | -742 |
--------------------------------------------------------------------------------
| | Proceeds from long-term loans | | 1 533 | 1 619 |
--------------------------------------------------------------------------------
| | Repayments of long-term loans | -3 | -44 | -463 |
--------------------------------------------------------------------------------
| | Dividends paid | | -15 | -15 |
--------------------------------------------------------------------------------
| Cash flow from financing activities | -17 | 1 495 | 978 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -1 956 | 5 167 | 4 861 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at beginning | 12 022 | 7 293 | 7 293 |
| of the period | | | |
--------------------------------------------------------------------------------
| Foreign exchange rate adjustment | -10 | -73 | -132 |
--------------------------------------------------------------------------------
| Cash and cash equivalents of | | 213 | 213 |
| subsidiaries acquired | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents of | | -3 464 | -3 464 |
| subsidiaries divested | | | |
--------------------------------------------------------------------------------
| Change in cash and cash equivalents for | | 8 419 | 8 112 |
| the continuing operations | | | |
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -1 956 | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end of the | 10 056 | 12 387 | 12 022 |
| period | | | |
--------------------------------------------------------------------------------
NOTES TO THE INTERIM FINANCIAL STATEMENTS
BASIS OF PREPARATION
The Group's interim report has been prepared according to IAS 34 standard. The
interim report does not include all information required of the year-end
financial statements, and consequently it should be read with Proha's yearend
financial statements of 2006.
ACCOUNTING PRINCIPLES
The same accounting principles have been applied in the interim report as in the
year 2006 financial statements except for the below alterations.
Beginning January 1, 2007 the Group has applied the following new and revised
standards and amendments:
IFRS 7, Financial instruments: Disclosures and complimentary amendment to IAS 1,
Presentation of Financial Statements - Capital disclosures.
IFRIC 10 Interim Financial Reporting and Impairment
IFRIC 11, IFRS 2 - Group and Treasury Share Transactions
The adoption of the above new and revised standards and interpretations does not
have a material effect on the interim financial statements.
DISCONTINUED OPERATIONS
Due to the divestment on June 30, 2006, the year 2006 comparative figures
present continuing and discontinued operations separately. The income statement
items of the discontinued operations were consolidated in the Group until the
closing date of June 30, 2006. Thus the Group figures for the period July 1, -
September 30, 2006 included continuing operations only. The Group has no
discontinued operations in 2007 and consequently the figures for the period
January 1, - September 30, 2007 as well as for the third quarter include the
Group's continuing operations only.
SEGMENT REPORTING
In 2006 Proha published its new strategy, according to which two divisions
(Dovre Consulting and Services Division and Safran Systems Division) were
established in the fourth quarter of 2006. The reporting structure for the Group
has been altered to follow the new divisional structure so that Dovre Consulting
and Services, Safran Systems, other operations as well as discontinued
operations each form a separate reporting business segment. Other operations
consist mainly of Proha Group administration. The figures for the review period
January 1, - September 30, 2007 together with their comparative data are
presented according to the new divisional structure.
--------------------------------------------------------------------------------
| GROUP COMMITMENTS AND CONTINGENT | | | |
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| (EUR thousand) | 30.9. | 30.9 | 31.12. |
| | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| COLLARETAL FOR OWN COMMITENTS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Debts secured by corporate | | | |
--------------------------------------------------------------------------------
| mortgages | | | |
--------------------------------------------------------------------------------
| Loans from financing | 3 118 | 3 735 | 3 028 |
| institutions | | | |
--------------------------------------------------------------------------------
| Book value of shares of | 6 696 | 6 256 | 5 672 |
| Dovre International AS and | | | |
| Dovre Fabcon AS and current | | | |
| assets of Dovre Fabcon AS | | | |
| given as security | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Debts secured by assets | | | |
--------------------------------------------------------------------------------
| Loans and checking | 259 | 364 | 0 |
| account credit lines | | | |
--------------------------------------------------------------------------------
| Book value of shares, trade | 577 | 556 | 1 106 |
| receivables and fixed | | | |
| assets given as security | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Debts secured by shares | | | |
--------------------------------------------------------------------------------
| Loans and checking | 12 | 36 | 24 |
| account credit lines | | | |
--------------------------------------------------------------------------------
| Book value of pledged shares | 511 | 511 | 511 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Future minimum lease payments | | | |
--------------------------------------------------------------------------------
| under non-cancellable | | | |
--------------------------------------------------------------------------------
| operating leases | | | |
--------------------------------------------------------------------------------
| Not later than one year | 317 | 303 | 328 |
--------------------------------------------------------------------------------
| Later than one year and not | | | |
--------------------------------------------------------------------------------
| later than five years | 1 152 | 1 280 | 1 204 |
--------------------------------------------------------------------------------
| Total | 1 469 | 1 583 | 1 533 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CHANGES IN TANGIBLE ASSETS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 30.9.2007 | 30.9.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Opening balance | 216 | 629 | 629 |
--------------------------------------------------------------------------------
| Acquisition of subsidiary companies | 22 | 21 |
--------------------------------------------------------------------------------
| Additions | 121 | 126 | 130 |
--------------------------------------------------------------------------------
| Sale of assets in subsidiaries | -402 | -402 |
--------------------------------------------------------------------------------
| Disposals | | -11 | -29 |
--------------------------------------------------------------------------------
| Depreciation and impairment | -76 | -90 | -117 |
--------------------------------------------------------------------------------
| Translation differences | 3 | -45 | -18 |
--------------------------------------------------------------------------------
| Closing balance | 264 | 229 | 216 |
--------------------------------------------------------------------------------
RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------
| Investments in associates, | | | |
| changes: | | | |
--------------------------------------------------------------------------------
| | 30.9.2007 | 30.9.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Opening balance | 985 | 967 | 967 |
--------------------------------------------------------------------------------
| Acquisitions of associates | 72 | 0 | 23 |
--------------------------------------------------------------------------------
| Disposals of associates | 0 | -5 | -5 |
--------------------------------------------------------------------------------
| Share of result | -87 | 0 | -2 |
--------------------------------------------------------------------------------
| Translation difference | -2 | 0 | -1 |
--------------------------------------------------------------------------------
| Closing balance | 968 | 962 | 982 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transactions with associates: | | | |
--------------------------------------------------------------------------------
| | 1-9/2007 | 1-9/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
| Sales to associates | 1 | 0 | 0 |
--------------------------------------------------------------------------------
| Purchases from associates | 49 | 40 | 53 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Open balances with associates: | | | |
--------------------------------------------------------------------------------
| | 30.9.2007 | 30.9.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Loan receivables | 242 | 0 | 0 |
--------------------------------------------------------------------------------
| Trade payables | 3 | 0 | 0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transactions with other related | | | |
| party companies: | | | |
--------------------------------------------------------------------------------
| | 1-9/2007 | 1-9/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales | 31 | 28 | 40 |
--------------------------------------------------------------------------------
| Purchases | 3 | 49 | 73 |
--------------------------------------------------------------------------------
| Interest on convertible loan | 63 | 63 | 84 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Open balances with other related | | |
| party companies: | | |
--------------------------------------------------------------------------------
| | 30.9.2007 | 30.9.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Trade receivables | 0 | 0 | 1 |
--------------------------------------------------------------------------------
| Convertible loan | 1405 | 1405 | 1405 |
--------------------------------------------------------------------------------
| Trade payables | 0 | 0 | 1 |
--------------------------------------------------------------------------------
| Accumulated interest payable | 63 | 63 | 0 |
--------------------------------------------------------------------------------
The book value of the convertible loan subscribed for by the investment company
of the company CEO was EUR 1 405 thousand on September 30, 2007, on September
30, 2006 and on December 31, 2006. The convertible loan falls due in full on
December 30, 2007. The rest of the terms of the convertible loan are presented
in 2006 year-end financial statements of Proha.
INCOME STATEMENT QUARTERLY
--------------------------------------------------------------------------------
| CONTINUING | | | | | | |
| OPERATIONS | | | | | | |
--------------------------------------------------------------------------------
| | 1-3 | 1-3 | 4-6 | 4-6 | 7-9 | 7-9 | 10-12 |
--------------------------------------------------------------------------------
| (EUR | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2006 |
| thousand) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES | 11 041 | 7 464 | 11 821 | 10 316 | 12 601 | 11 058 | 12 183 |
--------------------------------------------------------------------------------
| Other | 24 | 143 | 8 | 34 | 7 | 46 | 169 |
| operating | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Gain on | 0 | 0 | 0 | -472 | 0 | 0 | 0 |
| disposal | | | | | | | |
| of | | | | | | | |
| discontin | | | | | | | |
| ued | | | | | | | |
| operation | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Materials | -28 | -3 | -12 | -123 | -42 | 76 | -35 |
| and | | | | | | | |
| services | | | | | | | |
--------------------------------------------------------------------------------
| Employee | -10 | -6 699 | -11 | -9 825 | -11 730 | -10 159 | -11 204 |
| benefits | 077 | | 043 | | | | |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Depreciat | -89 | -86 | -99 | -92 | -105 | -101 | -94 |
| ion and | | | | | | | |
| amortisat | | | | | | | |
| ion | | | | | | | |
--------------------------------------------------------------------------------
| Other | -791 | -748 | -1 085 | -753 | -858 | -621 | -797 |
| operating | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| OPERATING | 80 | 70 | -410 | -915 | -127 | 299 | 222 |
| RESULT | | | | | | | |
--------------------------------------------------------------------------------
| % | 0,7 % | 0,9 % | -3,5 % | -8,9 % | -1,0% | 2,7 % | 1,8 % |
--------------------------------------------------------------------------------
| Financing | 44 | 7 | 200 | 7 | 106 | 56 | 151 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Financing | -91 | -63 | -159 | -62 | -172 | -69 | -345 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Share of | 5 | | -57 | | -40 | | -2 |
| result in | | | | | | | |
| associate | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| RESULT | 37 | 15 | -426 | -970 | -233 | 286 | 26 |
| BEFORE | | | | | | | |
| TAX | | | | | | | |
--------------------------------------------------------------------------------
| % | 0,3 % | 0,2 % | -3,6 % | -9,4 % | -1,8 % | 2,6 % | 0,2 % |
--------------------------------------------------------------------------------
| Tax on | -121 | -156 | -58 | -103 | -58 | -173 | -23 |
| income | | | | | | | |
| from | | | | | | | |
| operation | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| RESULT | -85 | -141 | -484 | -1 073 | -291 | 113 | 2 |
| FOR THE | | | | | | | |
| PERIOD | | | | | | | |
--------------------------------------------------------------------------------
| % | -0,8 % | -1,9 % | -4,1 % | -10,4 % | -2,3 % | 1,0 % | 0,0 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| DISCONTINUED | | | | | | |
| OPERATIONS | | | | | | |
--------------------------------------------------------------------------------
| | 1-3 | 1-3 | 4-6 | 4-6 | 7-9 | 7-9 | 10-12 |
--------------------------------------------------------------------------------
| (EUR | 2007 | 2006 | 2007 | 2006 | 2 007 | 2006 | 2006 |
| thousand) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES | | 8 837 | | 8 357 | | | |
--------------------------------------------------------------------------------
| Other | | 37 | | 79 | | | |
| operating | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Gain on | | 0 | | 15 006 | | | |
| disposal | | | | | | | |
| of | | | | | | | |
| discontin | | | | | | | |
| ued | | | | | | | |
| operation | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Materials | | -961 | | -784 | | | |
| and | | | | | | | |
| services | | | | | | | |
--------------------------------------------------------------------------------
| Employee | | -6 330 | | -5 880 | | | |
| benefits | | | | | | | |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Other | | -3 263 | | -3 139 | | | |
| operating | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| OPERATING | | -1 679 | | 13 640 | | | |
| RESULT | | | | | | | |
--------------------------------------------------------------------------------
| % | | -19,0 | | 163,2 % | | | |
| | | % | | | | | |
--------------------------------------------------------------------------------
| Financing | | 295 | | 709 | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Financing | | -309 | | -60 | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| RESULT | | -1 694 | | 14 289 | | | |
| BEFORE | | | | | | | |
| TAX | | | | | | | |
--------------------------------------------------------------------------------
| % | | -19,2 | | 171,0 % | | | |
| | | % | | | | | |
--------------------------------------------------------------------------------
| Tax on | | -252 | | -237 | | | |
| income | | | | | | | |
| from | | | | | | | |
| operation | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| RESULT | | -1 946 | | 14 052 | | | |
| FOR THE | | | | | | | |
| PERIOD | | | | | | | |
--------------------------------------------------------------------------------
| % | | -22,0 | | 168,1 % | | | |
| | | % | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP | | | | | | | |
| TOTAL | | | | | | | |
--------------------------------------------------------------------------------
| | 1-3 | 1-3 | 4-6 | 4-6 | 7-9 | 7-9 | 10-12 |
--------------------------------------------------------------------------------
| (EUR | 2007 | 2006 | 2007 | 2006 | 2 007 | 2006 | 2006 |
| thousand) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES | 11 041 | 16 301 | 11 821 | 18 673 | 12 601 | 11 058 | 12 183 |
--------------------------------------------------------------------------------
| Other | 24 | 180 | 8 | 113 | 7 | 46 | 169 |
| operating | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Gain on | 0 | 0 | 0 | 14 534 | 0 | 0 | 0 |
| disposal | | | | | | | |
| of | | | | | | | |
| discontin | | | | | | | |
| ued | | | | | | | |
| operation | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Materials | -28 | -964 | -12 | -907 | -42 | 76 | -35 |
| and | | | | | | | |
| services | | | | | | | |
--------------------------------------------------------------------------------
| Employee | -10 | -13 | -11 | -15 705 | -11 730 | -10 159 | -11 204 |
| benefits | 077 | 029 | 043 | | | | |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Depreciat | -89 | -86 | -99 | -92 | -105 | -101 | -94 |
| ion and | | | | | | | |
| amortisat | | | | | | | |
| ion | | | | | | | |
--------------------------------------------------------------------------------
| Other | -791 | -4 011 | -1 085 | -3 892 | -858 | -621 | -797 |
| operating | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| OPERATING | 80 | -1 610 | -410 | 12 725 | -127 | 299 | 222 |
| RESULT | | | | | | | |
--------------------------------------------------------------------------------
| % | 0,7 % | -9,9 % | -3,5 % | 68,1 % | -1,0 % | 2,7 % | 1,8 % |
--------------------------------------------------------------------------------
| Financing | 44 | 302 | 200 | 716 | 106 | 56 | 151 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Financing | -91 | -372 | -159 | -122 | -172 | -69 | -345 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Share of | 5 | | -57 | | -40 | | -2 |
| result in | | | | | | | |
| associate | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| RESULT | 37 | -1 679 | -426 | 13 319 | -233 | 286 | 26 |
| BEFORE | | | | | | | |
| TAX | | | | | | | |
--------------------------------------------------------------------------------
| % | 0,3 % | -10,3 | -3,6 % | 71,3 % | -1,8 % | 2,6 % | 0,2 % |
| | | % | | | | | |
--------------------------------------------------------------------------------
| Tax on | -121 | -408 | -58 | -340 | -58 | -173 | -23 |
| income | | | | | | | |
| from | | | | | | | |
| operation | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| RESULT | -85 | -2 087 | -484 | 12 979 | -291 | 113 | 2 |
| FOR THE | | | | | | | |
| PERIOD | | | | | | | |
--------------------------------------------------------------------------------
| % | -0,8 % | -12,8 | -4,1 % | 69,5 % | -2,3 % | 1,0 % | 0,0 % |
| | | % | | | | | |
--------------------------------------------------------------------------------
GROUP KEY RATIOS
--------------------------------------------------------------------------------
| (EUR million) | 7-9 | 7-9 | 1-9 | 1-9 | 1-12 |
| | 2007 | 2006 | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, Group | 12,6 | 11,1 | 35,5 | 46,0 | 58,2 |
--------------------------------------------------------------------------------
| Net sales, | | | | | |
--------------------------------------------------------------------------------
| continuing | 12,6 | 11,1 | 35,5 | 28,8 | 41,0 |
| operations | | | | | |
--------------------------------------------------------------------------------
| Net sales, | | | | | |
--------------------------------------------------------------------------------
| discontinued | 0,0 | 0,0 | 0,0 | 17,2 | 17,2 |
| operations | | | | | |
--------------------------------------------------------------------------------
| Operating result, | -0,1 | 0,3 | -0,5 | 11,4 | 11,6 |
| Group | | | | | |
--------------------------------------------------------------------------------
| % of Net sales | -1,0 % | 2,7 % | -1,3 % | 24,8 % | 20,0 % |
--------------------------------------------------------------------------------
| Operating result, | | | | | |
--------------------------------------------------------------------------------
| Continuing | -0,1 | 0,3 | -0,5 | -0,5 | -0,3 |
| operations | | | | | |
--------------------------------------------------------------------------------
| Operating result, | | | | | |
--------------------------------------------------------------------------------
| discontinued | 0,0 | 0,0 | 0,0 | 12,0 | 12,0 |
| operations | | | | | |
--------------------------------------------------------------------------------
| Result before | -0,2 | 0,3 | -0,6 | 11,9 | 12,0 |
| taxes | | | | | |
--------------------------------------------------------------------------------
| % of Net sales | -1,8 % | 2,6 % | -1,8 % | 25,9 % | 20,5 % |
--------------------------------------------------------------------------------
| Result for the | -0,3 | 0,1 | -0,9 | 11,0 | 11,0 |
| period | | | | | |
--------------------------------------------------------------------------------
| % of net sales | -2,3 % | 1,0 % | -2,4 % | 23,9 % | 18,8 % |
--------------------------------------------------------------------------------
| Return on equity, | -7,8 % | 2,9 % | -7,6 % | 148,2 % | 111,2 % |
| % | | | | | |
--------------------------------------------------------------------------------
| Return on | -1,1 % | 6,5 % | -1,2 % | 92,9 % | 72,8 % |
| investment, % | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 6,4 | 6,7 | 6,4 | 6,7 | 6,2 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Cash and cash | 10,1 | 12,4 | 10,1 | 12,4 | 12,0 |
| equivalents | | | | | |
--------------------------------------------------------------------------------
| Gearing, % | -24,3 % | -37,3 % | -24,3 % | -37,3 % | -38,2 % |
--------------------------------------------------------------------------------
| Equity-ratio, % | 46,3 % | 48,5 % | 46,3 % | 48,5 % | 47,3 % |
--------------------------------------------------------------------------------
| Balance sheet | 32,5 | 31,9 | 32,5 | 31,9 | 32,7 |
| total | | | | | |
--------------------------------------------------------------------------------
| Gross Investments | 0,2 | 0,0 | 0,5 | 2,1 | 2,2 |
--------------------------------------------------------------------------------
| % of Net sales | 1,3 % | 0,2 % | 1,4 % | 4,6 % | 3,8 % |
--------------------------------------------------------------------------------
| R & D expenses | 0,6 | 0,2 | 1,4 | 3,6 | 4,0 |
--------------------------------------------------------------------------------
| % of Net sales | 4,5 % | 1,4 % | 3,9 % | 7,7 % | 6,8 % |
--------------------------------------------------------------------------------
| Personnel average | 333 | 321 | 325 | 473 | 469 |
| for the period | | | | | |
--------------------------------------------------------------------------------
| Personnel at the | 333 | 325 | 333 | 325 | 325 |
| end of the period | | | | | |
--------------------------------------------------------------------------------
| Undiluted earnings | -0,005 | 0,002 | -0,014 | 0,179 | 0,179 |
| per share, EUR | | | | | |
--------------------------------------------------------------------------------
| Diluted earnings | -0,005 | 0,002 | -0,014 | 0,179 | 0,179 |
| per share, EUR | | | | | |
--------------------------------------------------------------------------------
| Equity per share, | 0,24 | 0,25 | 0,24 | 0,25 | 0,25 |
| EUR | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average | | | | | |
| share | | | | | |
| number | | | | | |
--------------------------------------------------------------------------------
| Undiluted | 61 218 670 | 61 218 670 | 61 218 670 | 61 218 670 | 61 218 670 |
--------------------------------------------------------------------------------
| Diluted | 61 218 670 | 61 218 670 | 61 219 643 | 61 243 036 | 61 236 944 |
--------------------------------------------------------------------------------
| Number of | 61 218 670 | 61 218 670 | 61 218 670 | 61 218 670 | 61 218 670 |
| shares at | | | | | |
| the end of | | | | | |
| the period | | | | | |
--------------------------------------------------------------------------------
DEFINITIONS OF KEY FIGURES
The definitions of key figures are given in the Annual Report of 2006.
LARGEST SHAREHOLDERS ON SEPTEMBER 28, 2007
--------------------------------------------------------------------------------
| Shareholder | Number of shares | Percentage of all |
| | | shares and |
| | | voting rights |
--------------------------------------------------------------------------------
| Dovregruppen A.S.*) | 6 560 646 | 10.7 |
--------------------------------------------------------------------------------
| Etra-Invest Oy | 6 211 500 | 10.1 |
--------------------------------------------------------------------------------
| Pekka Mäkelä | 2 882 375 | 4.7 |
--------------------------------------------------------------------------------
| Pekka Pere**) | 2 381 105 | 3.9 |
--------------------------------------------------------------------------------
| Etola Erkki | 2 000 000 | 3.3 |
--------------------------------------------------------------------------------
| Eficor Oyj**) | 1 860 000 | 3.0 |
--------------------------------------------------------------------------------
| Lars Nyqvist | 1 059 075 | 1.7 |
--------------------------------------------------------------------------------
| Thominvest Oy | 1 043 500 | 1.7 |
--------------------------------------------------------------------------------
| Eero Ruokostenpohja | 703 950 | 1.1 |
--------------------------------------------------------------------------------
| Ilari Koskelo | 570 000 | 0.9 |
--------------------------------------------------------------------------------
| Reino Jokinen | 530 000 | 0.9 |
--------------------------------------------------------------------------------
| Hinkka Invest Oy | 509 790 | 0.8 |
--------------------------------------------------------------------------------
| Astea AS | 471 257 | 0.8 |
--------------------------------------------------------------------------------
| Risto Saikko | 443 090 | 0.7 |
--------------------------------------------------------------------------------
| Navidata Oy | 430 000 | 0.7 |
--------------------------------------------------------------------------------
| Nordea Pankki Suomi Oyj | 426 032 | 0.7 |
| (nominee registered) | | |
--------------------------------------------------------------------------------
| Petri Hinkka | 400 000 | 0.6 |
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| Vesa Olsson | 400 000 | 0.6 |
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| Propeli Oy | 345 000 | 0.6 |
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| Timo Saros | 340 000 | 0.6 |
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*) Birger Flaa holds control over Dovregruppen A.S.
**) Pekka Pere holds control over Eficor Oy
