First Quarter 2007 Revenue up by 119% to Euro15.16 Million

Amaro (UD), 14 May 2007.

  • REVENUE +119%: FROM Euro 6.92 MILLION IN Q1 2006 TO Euro 15.16 MILLION IN Q1 2007
Today the Board of Directors of Eurotech SpA approved the Quarterly Interim Report as at 31 March 2007.

Growth continues at the Eurotech Group, which is active in the research, development, production and marketing of miniaturised computers (NanoPCs) and of computers featuring high-performance computing capability (High Performance Computers' HPCs).

The Groups result in exam for the first quarter turned out to be improved in comparison to what had been presented to the financial community on April 2, 2007

Group revenues grew by 119%, i.e. ?8.24 million, rising from Euro 6.92 million in Q1 2006 to Euro 15.16 million in Q1 2007.

Management also pursued a dimensional growth plan during the quarter under examination and internationalisation through the acquisition of Applied Data Systems Inc., which was completed on 8 January 2007.

The figures for the quarter show that gross profit grew by Euro 4.56 million from Euro 3.64 million in the first quarter of 2006 to Euro 8.20 million in the first quarter of 2007 with an incidence on revenues up from 52.6% in the first quarter of 2006, to 54.1% in the first quarter of 2007. This improvement compared to the 31 December 2006 figures is also slightly in excess of management's expectations for 2007, highlighting the lack of pressure on sale prices.

EBITDA amounted to Euro -561 thousand, net of Euro 189 thousand due to the price allocation for the business combinations recorded in the accounts pursuant to the provisions of IFRS 3 following the acquisition of the stakes in the Arcom Group and Applied Data Systems Inc.. Operating costs, which are mainly fixed, had a significant impact during a quarter in which, due to the concentration of the business, revenues are lower than in later quarters. The significant increase in sales forecast for the coming quarters will make it possible to better absorb these fixed costs.

The operating result (EBIT), net of the "price allocation", decreased between the first quarter of 2006 and the same period of 2007, from Euro -146 thousand in 2006 to Euro -918 thousand in 2007. This trend is strictly correlated to the EBITDA trend and higher amortisation and depreciation booked in 2007.

Financial management reported a positive change between the first quarter of 2006 and the first quarter of 2007 in absolute value of Euro 788 thousand, mainly as an effect of the income from the available liquidity following the share capital increase in July 2006 and the positive effect of the exchange rates management.

Profit before tax improved from Euro -485 thousand in the first quarter of 2006 to a result net of the "price allocation" of Euro -469 thousand in the first quarter of 2007.

The Group's net profit fell from Euro -434 thousand in the first quarter of 2006 to Euro -504 thousand in the first quarter of 2007, both net of the "price allocation". This performance, other than reflecting the trend of pre-tax profit, is mainly due to the impact of the tax charge on the Group's various companies and, to a lesser extent, profit attributable to minority interest.

As at 31 March 2007, and following the acquisition at the beginning of 2007, the Group still showed a positive net financial position of Euro 64.54 million, which is to be used mainly for external growth.

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Eurotech- Press Release

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