secunet publishes 3-month report 2011

In the first quarter of 2011, the revenues of the secunet Group fell versus the first quarter of 2010 from Euro 13.3m to Euro 10.2m, largely due to the continued postponement of major orders. secunet’s business is dependent on the receipt of large orders. This leads to a certain volatility in business performance. The impact of this can be clearly seen in the revenue performance of the High Security business unit, which supplies among others the German army with its SINA product line. That business unit saw a decrease in revenues from Euro 7.2m in the first quarter of 2010 to Euro 4.6m in the first quarter of 2011.

Other operating income generated by the secunet Group fell from Euro 0.9m during the first three months of 2010 to Euro 0.4m during the same period of the current year. At the same time, in the period from January to March 2011, the secunet Group’s total expenses declined from Euro 14.0m in the previous year to Euro 12.1m. As a result, earnings before interest and taxes (EBIT) fell from Euro 0.1m in the first quarter of the previous year to Euro –1.4m in the current year.

The result for the period January to March 2011 was Euro –1.0m, compared with Euro 0.2m in the previous year, resulting in earnings per share of Euro –0.16 compared with Euro 0.03 in the first quarter of 2010.

"Despite an overall positive environment, the results for the first quarter of 2011 are below expectations due to the absence of crucial procurement orders from major customers," said Dr. Rainer Baumgart, CEO of secunet Security Networks AG. "We intend to nevertheless adhere to our strategy of optimising our domestic and foreign sales and broadening our product business and will focus even harder on implementing it."

Order volume at secunet Security Networks AG amounted to Euro 27.8m as at 31 March 2011, or 7% more than the previous year (Euro 25.9m).

In order to ensure sustained and stable revenue performance, secunet is seeking to generate more revenues from products. As the result of a systematic, multi-year development process tailored to secunet’s core competences, the Group's product line is being expanded and supplemented to include components for hardware-based encryption. These hardware components were intended to have been deployed last year in major projects. However, the projects have been postponed several times. At the same time, secunet has been commissioned to adapt the product to meet new customer requirements. These requirements are currently being implemented. First deliveries are already planned for autumn 2011.

These projects will play a crucial role in achieving the forecasted business results for 2011. If the projects are successfully implemented, the Management Board expects revenues to be slightly below the previous year level and earnings before interest and taxes (EBIT) to meet the previous year level in 2011.



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