Germany was not the only country to which 2009 dealt the biggest economic blow since the end of the Second World War. By midyear there was a dramatic decline in economic output. Since then, things have begun to plateau, but the recession has been such that the manufacturing industries have produced some 20% fewer goods this year than in 2008. At the other end of the spectrum there are government programmes, stable private consumption levels and a comparatively robust building sector. On balance, economic experts are expecting a drop in real GDP in the region of 5%.
During this process of decline, the ICT industry has developed better than the economy as a whole. At the start of the year, the sector was still optimistic that it would be able to distance itself from the general trend, but this hope was eclipsed by reality. Nonetheless, the drop in turnover expected by the national association BITKOM for software (-3.2%) and IT services (-0.2%) is well below that of the economy overall. PIRONET NDH has developed better than average for the sector. After nine months, the company, which provides innovative solutions to create, synchronise and distribute digital content of all kinds, and to improve internal and external business processes (including ICT outsourcing), showed a plus in turnover of just below 1%. This was, however, well below its target figures, meaning that the target turnover and results were not achieved, mainly due to a weak third quarter.
Following a first quarter which was still satisfactory, as the year continued the targets for growth proved too ambitious in view of the economic crisis. The extension of the sales division meant that costs had risen too sharply. Steps were taken to deal with this in July, and an extensive savings regime was enforced which cut costs by at least EUR 2.5 million in the second half of the year. Thus, costs were reduced from some EUR 16.7 m (Q2) to almost EUR 15.1 m. The figures show that PIRONET NDH is coming along well with its cost reduction programme, but the negative trend in returns has continued, with turnover dropping 14.2% in the third quarter compared with the same time last year, to EUR 13.9 m. The EBIT turned from EUR 1 million to EUR -1.2 m and the EBT from EUR 1.1 m to EUR -1.4 m.
Figures in for the first nine months paint the following picture: turnover EUR 45 m (PY: EUR 44.7 m); EBIT EUR -1.9 m (EUR 1.9 m); EBT EUR -2.5 m (EUR 2.5 m). Even though yields declined again from the second to the third quarter, PIRONET NDH has taken a major step forward regarding one of the main aims of the savings programme: saving liquid capital. Cash assets fell EUR 1.4 million from EUR 14.3 m (30 June) to EUR 12.9 million, with EUR 1 m going towards dividend payment alone. In operational terms this meant that spending was at a level of EUR 0.4 million, after a level of EUR 4.5 m as late as April to June. PIRONET NDH continues to work without any liabilities to banks.
From an operational point of view, the third quarter is most likely the low for the current reporting period. In the final quarter, stabilising liquid capital remains top priority, but seen annually, results are expected to show a loss.
During this process of decline, the ICT industry has developed better than the economy as a whole. At the start of the year, the sector was still optimistic that it would be able to distance itself from the general trend, but this hope was eclipsed by reality. Nonetheless, the drop in turnover expected by the national association BITKOM for software (-3.2%) and IT services (-0.2%) is well below that of the economy overall. PIRONET NDH has developed better than average for the sector. After nine months, the company, which provides innovative solutions to create, synchronise and distribute digital content of all kinds, and to improve internal and external business processes (including ICT outsourcing), showed a plus in turnover of just below 1%. This was, however, well below its target figures, meaning that the target turnover and results were not achieved, mainly due to a weak third quarter.
Following a first quarter which was still satisfactory, as the year continued the targets for growth proved too ambitious in view of the economic crisis. The extension of the sales division meant that costs had risen too sharply. Steps were taken to deal with this in July, and an extensive savings regime was enforced which cut costs by at least EUR 2.5 million in the second half of the year. Thus, costs were reduced from some EUR 16.7 m (Q2) to almost EUR 15.1 m. The figures show that PIRONET NDH is coming along well with its cost reduction programme, but the negative trend in returns has continued, with turnover dropping 14.2% in the third quarter compared with the same time last year, to EUR 13.9 m. The EBIT turned from EUR 1 million to EUR -1.2 m and the EBT from EUR 1.1 m to EUR -1.4 m.
Figures in for the first nine months paint the following picture: turnover EUR 45 m (PY: EUR 44.7 m); EBIT EUR -1.9 m (EUR 1.9 m); EBT EUR -2.5 m (EUR 2.5 m). Even though yields declined again from the second to the third quarter, PIRONET NDH has taken a major step forward regarding one of the main aims of the savings programme: saving liquid capital. Cash assets fell EUR 1.4 million from EUR 14.3 m (30 June) to EUR 12.9 million, with EUR 1 m going towards dividend payment alone. In operational terms this meant that spending was at a level of EUR 0.4 million, after a level of EUR 4.5 m as late as April to June. PIRONET NDH continues to work without any liabilities to banks.
From an operational point of view, the third quarter is most likely the low for the current reporting period. In the final quarter, stabilising liquid capital remains top priority, but seen annually, results are expected to show a loss.
