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GFT achieves increase in revenue despite difficult market environment

The IT company GFT Technologies AG increased its revenue and earnings compared to the previous quarter despite the continued financial market crisis. In the first half of 2008, the company noted revenue growth of three per cent to € 115.9m. Earnings before taxes came to € 2.3m.

Resourcing and Services continued to be the best-performing divisions of the GFT Group in the first half of 2008. The growing demand for external IT experts led to a growth in revenue of 12% to € 68.9m (prior year: € 61.5m) in the Resourcing division. At € 44.2m, revenue in the Services division lies € 4.8m below that of the same period of the previous year. The reason for the decline is the restrained spending behaviour of clients from the financial services sector. Initial successes with the sale of the software product, inboxx, have been posted by the Software division. This sector managed to achieve an increase in revenue by ten per cent to € 2.8m compared to the same period in the previous year.

Earnings before taxes (EBT) came to € 2.3m in the first half of 2008 and thus remained behind the previous year's value of € 5.3m. In the second quarter the EBT increased by € 1.2m compared to the first quarter.
Significant investments by the Software division to market the new product series inboxx became clear in the overall earnings. In addition to the current restraint of banks and insurance companies when it comes to new investments, the sale of majority stakes in the Indian subsidiary GFT India Ltd. also encumbered the half-year earnings.

The net income as at 30 June 2008, with € 1.1m, was below the previous year’s value (€ 3.3m). During the reporting period, earnings per share came to € 0.04 compared to € 0.13 for the same period in the previous year and € 0.01 in the first quarter. The funds available for payment (including securities) declined slightly year-on-year (€ 21.6m) to € 18.1m.

As at 30 June 2008, the GFT Group employed 1,039 people – 48 fewer than at the end of 2007 and twelve fewer than the same period in the previous year. The reduction in the number of employees is mainly due to the sale of shares in the Indian subsidiary, as 47 people were employed there last year. The Resourcing division noted an increase in employees of 27 people, reflecting the growing demand for external IT experts.

“The continued increase in demand for IT specialists offers us promising growth opportunities in the Resourcing division throughout the second half of 2008,” commented Ulrich Dietz, CEO of GFT Technologies AG. “At the same time we are working intensively on increasing revenue in the Services division through new, attractive project offerings for international clients. In the Software division, we have an outstanding solution offer with our product series inboxx, supporting our clients in complying with legal archiving obligations. We will continue to steadily expand sales and we are expecting revenues to rise and an increase in earnings for the second half of the year.”

On the basis of the global economic downturn and the unpredictable impact of the crisis in the financial market, the Executive Board is expecting a moderate increase in revenue for the current financial year compared to the previous year (2007: € 247.1m). In terms of the operating earnings before taxes, the GFT Group is striving to exceed the threshold of a double-digit million value, but considers this to be a challenge given the current market environment.