Major contracts creates profitable growth for EDB

After adjusting for divested and discontinued businesses, operating revenues were up by 9.1% and operating profit was 56% higher than the same quarter of last year. Profitability continues to improve quarter by quarter compared with last year, and EDB reports an operating margin (EBITA margin) of 9.1% for the second quarter of 2004, up from 5.5% for the second quarter of 2003. In addition the sale of the main part of the Telecom business area to Accenture added a profit of NOK 300 million. Operating revenues of NOK 1,043 million for the second quarter shows a fall from NOK 1,110 million in the same quarter of 2003 before adjusting for businesses divested and discontinued. These activities represented operating revenues of NOK 154 million in the second quarter of 2003. Operating profit of NOK 95 million was up 56% on the same quarter in 2003, with an operating margin (EBITA) of 9.1% for the quarter as compared to 5.5% in the second quarter of 2003. The groups cash flow from operations improved, almost doubling from NOK 45 million in the second quarter of 2003 to NOK 86 million in the second quarter of this year. Liquidity reserves, including undrawn credit facilities, totalled NOK 787 million at the end of the second quarter. In addition the group has a receivable from Accenture of NOK 300 million in respect of the sale of the SI part of the Telecom business area that falls due for payment in the second half of this year. The groups two largest business areas, IT Operations and Bank & Finance, reported particularly strong results. IT Operations reported second quarter operating revenues of NOK 804 million, approximately 10% higher than for the same period last year, adjusting for activities of the former Business Consulting business area included in IT Operations from the third quarter of 2003. The business areas operating profit (EBITA) of NOK 72 million represents a margin of 8.9%, which also is higher than the same quarter of 2003 (NOK 61 million and 8.6%). Bank & Finance reported operating revenues for the quarter of NOK 215 million, on the same level as in the same quarter of 2003. Operating profit, however, more than doubled from NOK 17 million in the second quarter of 2003 to NOK 35 million in the second quarter of 2004. Bank & Finances operating margin of 16% is the best this business area has achieved for 16 quarters and is a significant improvement from the margin of 7.6% reported for the second quarter of 2003. The figures reported for the Telecom business area reflect the sale of the major part of its business to Accenture. After adjusting for this, the remaining activities show a 16% fall in operating revenue to NOK 49 million. Market conditions for the business areas products are generally difficult and this has also influenced the profitability, with operating profit (EBITA) falling from NOK 18 million and a margin of 11.5% in the second quarter of 2003 to NOK 1 million with a 2.9% margin for the second quarter of 2004. The parent company reported an operating loss of NOK 13 million for the quarter as compared to a loss of NOK 25 million for the second quarter of 2003. Goodwill amortisation was NOK 39 million, in line with the same quarter of 2003. The group reports an operating profit (EBIT) for the second quarter of 2004 of NOK 356 million (including the gain of NOK 300 million on the sale of part of the Telecom business area) as compared to NOK 18 million for the second quarter of 2003. Net financial items represented a charge of NOK 13 million as compared to NOK 21 million in the same quarter last year. Net interest expense was NOK 12 million, down from NOK 18 million in the same quarter of 2003. The second quarter produced a profit after tax and minority interests of NOK 241 million as compared to a loss of NOK 19 million for the same quarter in 2003. Earnings per share amounted t