PSI sees increased profitability and declining revenues in Q1
Today, PSI, the Berlin-based developer and integrator of specialised software solutions for monitoring and managing large networks and production processes, published its interim Q1 results.
Revenues were down 16% at €27.4m, EBIT increased by 47% to €1.3m producing an EBIT margin of 4.7% compared to 2.8% year-on-year. The level of new orders was almost stable compared to Q1 of 2007.
For Q2, PSI expects an increase of new orders (compared to Q2 of 2007) and an improved EBIT over the preceding quarter.
Comment: PSI's revenue declined across all business lines, but the drop was most pronounced in its infrastructure management division, where sales plummeted 44.6% to €3.6m, whilst the EBIT remained unchanged at €0.1m. Revenue in its production management unit dropped by 13.4% to €11.6m with a much improved EBIT of €0.4m compared to €0.1m year-on-year. Its single largest division, the energy management unit, has remained the most profitable operation. It generated a 12.5% increase in EBIT to €0.9m but a 4.7% decline in revenue to €12.3m.
However, PSI's results are distorted by the sales of its government business (European IT Consultancy EITCO GmbH) in July last year. Though it left PSI with an undisclosed book profit in 2007, its sales diminished PSI's revenue stream in 2008 on a year-on-year comparison. In particular its infrastructure management division was affected hardest by the sales of the government business due to the lapse of hardware sales. Despite this, PSI has been able to increase its overall profitability and financial indicators such as operational cash flow (€2.7m compared to -€1.2m) and liquid assets (up 54% at €21.4m), which were both improved compared to Q1 in 2007.
The outlook remains optimistic, particularly regarding its mid-term target to raise its international business: here PSI has profited from rising investment in Eastern Europe and Asia, where first-time investment is increasingly superseded by modernisation activities, particularly in the energy and steel sector. Here PSI expects to close more substantial deals over the coming quarters; to foster this, it plans to increase the number of staff in its export division.
