January -September 2008
- Net sales increased by 22% to SEK 204.1 million (167.2).
- Operating earnings improved by 95% to SEK 28.6 million (14.7)
- Net income improved by 101% to SEK 31.0 million (15.4).
- Net profit margin was 15.2% (9.2)
- Gross margin at 71.6 % is affected by reclassification of support and training expenses. Adjusted for this item gross margin was 73.6% (70.6).
- Software and support revenue increased to SEK 74.6 million (37.6).
- Total cash flow amounted to SEK 4.7 million (16.6).
- Earnings per share amounted to SEK 0.08 (0.04).
Third quarter 2008
- Net sales increased by 14% to SEK 66.2 million (58.3).
- Operating earnings improved by 33% to SEK 8.6 million (6.5)
- Net income improved by 36% to SEK 9.1 million (6.7).
- Gross margin at 74.8% is affected by reclassification of support and training expenses. Adjusted for this item gross margin was 76.8% (70.6).
- Software and support revenue increased to SEK 33.8 million (12.6).
- Total cash flow amounted to SEK 14.0 million (4.3).
- Earnings per share amounted to SEK 0.02 (0.02).
The full report can be downloaded here: Interim report Q3 2008(pdf).
The fundamental market drivers are strong. Broadcasters and media network operators continue the analogue switch-off, digitalization and HDTV migration processes across the world. Telcos and cable TV operators start large-scale IPTV rollouts and initial commercial Mobile TV networks are being deployed. Overall there is a huge surge in video traffic across communication networks.
The first nine months of 2008 has been our most profitable period so far with strong margins, positive cash flow and revenue growth. We have built a customer base that generates stable repeat business and we win new customers in new markets. Some larger projects sometimes have longer sales processes and we experience quarterly business fluctuations due to the timing of a number of these projects.
The Beijing Olympics is over and as communicated in the press this was the world’s largest and most mission critical TV event. As previously communicated, Net Insight delivered and installed Nimbra equipment under the contract with the Host Broadcaster, BOB. This is a very important project for Net Insight and our network solution has generated strong market interest, which has already generated some new business for us.
Digital TV is on the rise in China, the world’s largest TV market, and the government has set an aggressive timetable for the DTT transition process. Mobile TV is also taking off where SARFT plans to rollout Mobile TV services across China by the end of 2009. This creates new opportunities for Net Insight and during the third quarter we received a first order for a TV distribution network in China.
Today we count many telecom operators as customers. In North America, as well as in Asia, we have recently won smaller initial business with telcos but with large-scale IPTV and other networks being deployed over time, these customer relationships represent significant business potential for Net Insight.
We have invested in our sales channels to continue our expansion in our prioritized segments in Europe, Eastern Europe, Middle East and Asia. New local partners and expanded sales resources are driving new business in these areas even though it takes time to gain full speed in newly established sales channels and markets. We actively pursue many new projects in over 30 countries.
The transition to Digital Terrestrial TV continues around the world and is an important market driver for Net Insight’s business with numerous business opportunities and customer wins. The size of initial individual DTT contracts has so far been smaller than we first anticipated and in some market areas the digitalization process is taking slightly longer time, but our exceptionally strong references are now a great asset for us.
Our progress in the first part of 2008 has been very encouraging and Net Insight is in a good position to capture the growth opportunities in our identified markets. Our market leading product portfolio for efficient media transport, a solid customer base, strong financial position and performance and a growing market presence represent a very good platform for the future.
Stockholm, 23 oktober 2008
Fredrik Trägårdh
Chief Executive Officer
For more information, please contact:
Fredrik Trägårdh, CEO Net Insight AB
Tel.: +46 (0) 8-685 04 00, email: fredrik.tragardh@netinsight.net
Lars Kevsjö, CFO Net Insight AB
Tel.: +46 (0) 8-685 04 00, email: lars.kevsjo@netinsight.net
Net Insight AB
Box 42093
126 14 Stockholm
Tel +46 (0) 8 685 04 00
www.netinsight.net
Corporate Reg. No. 556533-4397
Net Insight deliver the world’s most efficient and scaleable optical transport solution for Broadcast and Media, Digital Terrestrial TV/Mobile TV and IPTV/CATV networks.
Net Insight products truly deliver 100 percent Quality of Service with three times improvement in utilization of bandwidth for a converged transport infrastructure. Net Insight’s Nimbra™ platform is the industry solution for video, voice and data, reducing operational costs by 50 percent and enhancing competitiveness in delivery of existing and new media services.
World class customers run mission critical media services over Net Insight products for more than 100 million people in more than 25 countries. Net Insight is quoted on the Stockholm Stock Exchange.