Norways EDB Business Partner Earnings affected by restructuring and results of internal review

The same period last year saw an operating profit of NOK 71 million. Turnover was little changed from the third quarter of last year (NOK 1,001 million). Operating profit was burdened by NOK 126 million of restructuring costs and provisions. Profit margin (EBITA margin) for the quarter was -4.5% as compared to +7% for the same quarter in 2002. Non-recurring items totalled NOK 126 million for the quarter. Underlying profitability has therefore improved, with an EBITA margin of 8%. All the groups business areas have reported a successive improvement in underlying margin over the first three quarters of this year. Cash from operations was NOK 112 million as compared to NOK 150 million in the same quarter last year and NOK 45 million in the second quarter of this year. The third quarter produced a loss after tax of NOK 79 million as compared to a profit of NOK 5 million for the same period last year. After adjusting for non-recurring items, the group shows an improvement in profit from the same time last year. Third quarter turnover confirms that market conditions are stable. The quarters results reflect a group implementing changes and are affected by the results of the internal review. The clean up task has now been completed, and if provisions and restructuring costs are excluded profitability shows an improving trend. I am still not satisfied with these results. The group has the potential for better earnings than we currently achieve. However the task of refocusing the group is progressing at a rapid pace, and the changes we are making are well received by both current and new customers. Measures were launched in the third quarter to refocus the Bank & Finance business area, and are proceeding according to plan. Provisions totalling NOK 89 million were recognised in the third quarter in relation to changes in this business area. The measures implemented include a reduction in headcount, and this will have an impact on costs from 1 November. During the third quarter the group reviewed its future office space requirements and its property lease commitments. This showed that the group is committed to lease more space than it requires, and a provision of NOK 28 million has been recognised in addition to the provisions previously announced. A further provision of NOK 9 million was made for other non-recurring costs relating to the process of change in the group.