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GFT publishes results for the first nine months of 2008

The IT company GFT Technologies AG achieved stable revenue development despite the current turbulence in the financial markets. In the first nine months GFT generated revenues of €177.5m (previous year: €176.3m). The earnings before taxes came to €4.3m. and were therefore lower than expected. The revenue and income targets for the 2008 financial year were reduced.

The Resourcing division generated the largest revenue contribution during the first nine months of 2008. As a result of the continuing demand for freelance IT specialists, revenue here could be increased by ten per cent to €106.3m (previous year: €97.1m). The escalation of the crisis in the financial markets and the associated global economic downturn was reflected in subdued demand across all industries: in the Services division revenues fell during the first nine months of 2008 by 11 per cent to €67.2m (previous year: €75.2m). In the Software division revenue fell by two per cent to €4.0m (previous year: €4.1m).

The consolidated earnings before taxes (EBT) of the GFT Group on 30 September 2008 were €4.3m and consequently €4.4m below the previous year’s figure. The Services division made the largest contribution to income with €5.0m while the Resourcing division achieved nine-month earnings of €2.6m. The Software segment by contrast had a negative effect on earnings with - €2.8m. In a quarterly comparison it rose relative to the second quarter of 2008 (€1.7m) by 24 per cent to €2.1m.

Net income on 30 September 2008 at €2.6m was below the previous year’s figure (€5.7m). Earnings per share during the reporting period were €0.10 after €0.22 year on year and €0.04 at mid-year. The funds available for payment fell by 21% year-on-year from €22.8m to €17.9m.

As of 30 September 2008, the GFT Group employed 1,015 employees – 72 fewer than at the end of 2007 and 62 fewer than at 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. In the previous year, 56 employees worked there. The Resourcing segment noted an increase in employees: 22 more persons than at the same time in the previous year were employed here. This reflects the ongoing demand for external IT experts in companies.

Against this backdrop the Executive Board has lowered its forecasts for the entire year. For the current year, GFT expects group level revenues of €240m and earnings before taxes (EBT) of €6m.

“Despite the crisis on the financial markets, we are optimistic about the future,” explained Ulrich Dietz, CEO of GFT, although he expects a recovery of the market not before the second
half of 2009. He continued, “once the banks have overcome the crisis, they will have to implement the tighter regulations currently under discussion. Today we are already working on the corresponding IT solutions to provide our customers with intensive support in this area.”