secunet reports on the first six months of 2005: Sustained growth in revenues and earnings

secunet increased its revenues in the first six months of 2005 to € 16.4 million, up just over 56% from the 2004 figure of € 10.5 million. Organically, i.e. without taking the 2004 acquisition of Secartis AG into account, which was not included in the scope of consolidation until April 2004, revenues rose by more than 36% compared to the previous year. Organic growth in the second quarter alone was over 43%.
The positive performance in terms of earnings has also resulted in a sustained improvement of secunet's profitability. The company boosted its earnings before interest and taxes (EBIT) to € 1.6 million. This compares to earnings of € -1.2 million in the first six months of 2004. secunet's EBIT margin in the first half-year was 9.8%. Looking at the second quarter alone, secunet improved its EBIT to € 0.8 million, up from € -0.7 million in the second quarter of 2004. secunet achieved an EBIT margin of 8.7% in the second quarter of 2005. Earnings per share in the second quarter were € 0.09. In the first six months, secunet earned € 0.16 per share, compared to earnings per share of € -0.12 in 2004.
"secunet has been generating consistently increasing revenues and positive earnings for the last year," says Dr. Rainer Baumgart, chief executive officer of secunet Security Networks AG. "The consolidation strategy which we pursued in recent years is now bearing fruit.”
As in the first quarter, the positive result is due to three factors: high capacity utilization, increased licensing revenues, and a disproportionately low increase in variable expense items compared to revenues.

Personnel expenses rose by just over 23% year-on-year, from about € 6.8 million to € 8.3 million. In the second quarter, the increase in personnel expenses was just under 13%. At 207, the number of employees as of 30 June 2005 was almost unchanged compared to 30 June 2004 (211). The rise in personnel expenses is mainly due to the acquisition of Secartis AG in 2004. Amortization, depreciation and other operating expenses also grew slower than revenues. Cost of materials showed a strong increase of about 87%, from € 2.2 million in 2004 to just under € 4.2 million in 2005. This increase is caused by secunet's project structure.
The increase in other operating income compared to the same period last year is once again due to the reversal of provisions for follow-up costs from fiscal year 2004. A large portion of this operating income was already accounted for in the first quarter of 2005.
Earnings before taxes for the first six months of 2005 were clearly positive at € 1.7 million, compared to earnings of € -1.2 million in the first half of 2004. Positive earnings of € 0.8 million were also recorded in the second quarter of 2005. The result for the first six months improved from € -0.8 million to € 1.0 million. Net income for the quarter (after tax) was € 0.6 million.
With its comprehensive and in-depth expertise and cutting-edge developments, secunet is a respected partner in the market for high-security IT services and products. There is consistently strong demand for consulting services and solutions. Orders on hand at secunet as of 30 June 2005 amounted to about € 24 million. This represents an increase of 47% compared to last year's figure of € 16.3 million. secunet also managed to boost orders on hand compared to 31 March 2005 (€ 14.7 million).
The positive results for the first six months of 2005, the high volume of orders and the continued, strong demand for high-security IT solutions are grounds for further optimism with regard to the future prospects of secunet. The board of management holds to its forecast of revenues of € 37 million with an EBIT margin of over 7% for fiscal year 2005.