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secunet AG: 6-month report 2006 <br>Positive trend during the course of the year

• Q2 2006 significantly better than Q1 2006• Still ground to make up on excellent previous-year results• Investing for the future marks operative business• Public sector procurement decisive for net income[Essen, 3 August 2006] secunet Security Networks AG, leading European provider of products and services for IT high security, had a much better second than first quarter in 2006 and is now back in the black. At the half-year stage, the previous year's figures have yet to be beaten: The very good results of fiscal year 2005 are proving to be a tough growth challenge in 2006.

In the second quarter of fiscal year 2006, the secunet group generated revenues of € 8.4 million. Compared with the first quarter of the current year, this is an increase of 26%. There is a clear positive trend since the beginning of the year. Nevertheless, the excellent prior year figures were not beaten in the second quarter (prior year € 8.8 million, 4% difference) nor for the first half year (€ 15.2 million in 2006, € 16.4 million in 2005, 7% difference). The main cause for this development is that public clients remain hesitant about placing orders.

The main cost drivers, personnel, depreciation and amortization, and other operating expenses, were reduced slightly compared with Q2 2005 and also year on year (Q2 2006 some € 8.3 million, Q2 2005 € 8.4 million; H1 2005 € 16.2 million, H1 2006 € 15.9 million). Only material costs rose, from € 2.2 million in the previous year to € 2.3 million in Q2 2006. This item strongly depends on SINA project sales, which involve hardware shipments.

Compared with the first quarter, in which earnings before interest and taxes (EBIT) were -€ 0.1 million, the second quarter saw a positive EBIT of € 0.4 million. H1 EBIT was € 1.6 million in 2005 and € 0.3 million in 2006. The profit for the first six months was € 0.2 million. As a result, earnings per share were € 0.03 compared with € 0.16 in H1 2005.

The payment of variable salary components and the large build-up of accounts receivable as of the reporting date led to a cash flow of -€ 8.3 million (prior year -€ 2.4 million).

Both public and private clients are still relatively hesitant in their demand. There are also long delays in the taking of key decisions in major infrastructure projects. This is also reflected in the order books as of 30 June 2006: whereas in the previous year a major government order boosted orders on hand to € 24 million, the level at the end of H1 2006 was € 15.3 million. This is also a drop compared with 31 March 2006 (€ 17.1 million).

"Our main customers, the public sector, have always had a pronounced seasonal demand pattern – we expect this to influence this year's figures too," says Dr. Baumgart. "Owing to the current high uncertainties, it is still difficult to make a detailed forecast for 2006 as a whole."

The secunet Security Networks AG executive board expects the earnings trend since the beginning of the year to continue. An increase on the excellent figures from the previous year remains a challenging goal.


<link fileadmin pressemeldungen pressemeldungen_englisch download>[.pdf, 63 kB]