In the first nine months of 2009 Synergon Group produced sales in the volume of 12,250 mHUF, which is an increase of 5% compared to the corresponding period of the previous year, and primarily reflects the increase of sales by the Hungarian subsidiaries.

In the first three quarters of 2009 the net contribution volume calculated from the sales revenues and direct costs of the Group increased by 30% to 4,311 mHUF, which equals a net contribution ratio of 35%. The value of the contribution ratio for the first three quarters of the year exceeded the corresponding period of the previous year by 7%, it was the third quarter that played a dominating role in that improvement, as the growth of the first quarter was 8%.

The historical cost of the resources utilized for operation are significantly below the change in contribution and sales revenues, thus the additional contribution value improved the increase of Group EBITDA. In the first nine months of 2009 the Group reached an EBITDA value of 556 mHUF, which is an increase of over 800 mHUF compared to the previous period of 2008, and equals an EBITDA ratio of 5%.

The net cash flow deriving from operations was 348 mHUF. The profitability of business operations is reflected by the fact that a profit of 399 mHUF was collected in that period from the primary activity. In the comparative period a negative cash flow derived from operations, and the significant positive cash flow was caused by the change in operating capital.

Márk Lazarovits, the CEO of the company commented:

“The market environment did not improve in the third quarter, the crisis continued to be manifest in the slips and delays of the projects. Although traditionally, this period is one of the weaker times, in the first nine months of the year their business profit totaled 235mHUF, in which the determining item was the performance of Hungarian subsidiaries.

In addition to closing several major projects in the third quarter, we also managed to win new orders, primarily in the industrial sector. We have delivered the IT system of the facility of Hungarian Television in Kunigunda street, in which almost every branch of our Company participated. At T-Group we closed our Digital Video Broadcasting Satellite project, and at Aegon we completed the construction of the Disaster Recovery Site.

Among our new projects I would highlight the establishment of a disaster-tolerant site started at MFB and applying to the mission critical systems of the bank, and at Magyar Telekom we made further sales to the IP Address Management project, which was started earlier and has already been implemented.

We stepped up our monitoring activities, in order to set off the negative effects, and we make an effort by the conscious development of our staff and facilities to ensure that when the recession is over, we should be able to fulfill the expected market needs at a quality level exceeding that of the competitors. I believe that we will keep up our good performance so far until the end of the year, and despite the crisis we will close a favorable year.”

The Flash Report can be downloaded from Investor Relations' Flash Reports folder.

Synergon Information Systems Plc.