Interim report january 1 - march 31, 2001

INTERIM REPORT JANUARY 1 - MARCH 31, 2001 OPERATING INCOME SEK 141 (329) MILLION PRE-TAX PROFIT SEK 1 (143) MILLION Performance and financial position Group Hagströmer & Qviberg (H&Q) reports for the period January 1 to March 31, 2001 a pre-tax profit of SEK 1 (143) million. The low market activity in general, and for the IT and Telecom sector in particular, has contributed to decreasing income, which has had a negative effect on performance compared to the previous year. In total operating income was SEK 141 (329) million, a decrease of 57 percent. H&Q Technology contributed with 44 (54) percent of the operating income and H&Q Private Banking contributed with 53 (45) percent. Other income contributed with 3 (1) percent. Income from commissions and fees decreased by 58 percent to SEK 100 (237) million, of which SEK 20 (60) million was income from Corporate Finance. Net income from financial transactions including dividends decreased by 60 percent to SEK 40 (101) million, of which corporate finance- related holdings gave a result of SEK -3 (12) million. Operating expenses were SEK 140 (186) million, a decrease of 25 percent. Of the operating expenses, SEK 95 (147) million was attributable to personnel expenses and SEK 45 (39) million to other expenses. Fulfilled cost-savings have partially affected the cost level during the period. Personnel expenses decreased by 20 percent compared to the fourth quarter last year, primarily due to lower bonus allocations. Other expenses decreased by 20 percent compared to the fourth quarter last year. Additional effects from the ongoing reduction of the cost level are expected during the second and third quarters this year. Earnings per share after dilution was SEK 0.2 (20). Shareholders' equity was SEK 482 (469 as per December 31, 2000) million, corresponding to SEK 93 (92 as per December 31, 2000) per share. Return on equity was 18 (97) percent. The group's liquid funds were SEK 355 (-469 as per December 31, 2000) million. The number of employees in the group was 349 (294 as per March 31, 2000 and 336 as per December 31, 2000). The average number of employees during the first quarter was 331 (278). Parent company The parent company reports a net turnover for the period of SEK 0 (0) million and a pre-tax result of SEK -4 (-4) million. H&Q Technology Operating income for H&Q Technology decreased by 65 percent compared to the first quarter, but increased by 2 percent compared to the fourth quarter last year. Lower market activity, fewer advisory and underwriting assignments and the worsened conditions for arbitrage and market maker operations explain the decline compared to the first quarter last year. The result was break-even. As per March 31, 2001 the booked value for the corporate finance- related holdings was SEK 79 million, distributed among shares, convertibles and options in a total of 14 companies. The four largest holdings - Genesis, IFS, Melody and MobileMedia - contributed with 81 percent of the booked value. Earnings conditions for H&Q Technology are tied to the performance of the IT and Telecom sector. The slump that this sector has experienced has meant that many advisory and underwriting assignments have not been fulfilled; at the same time, activity on the second-hand market has been low. The number of employees within H&Q Technology was 89 (65 as per March 31, 2000 and 84 as per December 31, 2000). H&Q Private Banking The low market activity during the first quarter entailed lower income and earnings for H&Q Private Banking. Operating income decreased by 50 percent compared to the first quarter and decreased by 17 percent compared to the fourth quarter last year. Earnings were slightly positive. The inflow of new clients and custody account volumes was positive during the period. As a result of the lower market value, total managed capital decreased to barely SEK 21 (24 as per December 31, 2000) billion. Around 80 percent of total managed capital is attributable to the target groups of entrepreneurs, companies and institutions. During the period a partnership has been entered into with Union Bancaire Priveé (UBP). The number of partnerships associated with H&Q Private Banking's operations within Financial Planning, Brokerage and Asset Management is now thus 16. The number of employees within H&Q Private Banking was 155 (137 as per March 31, 2000 and 150 as per December 31, 2000). Miscellaneous Since the end of the report period, an agreement has been made with GE Capital Bank AB regarding a transfer of premium bond operations that are managed under the secondary name PP Privata Placeringar. The purchase price is at least SEK 65 million. The transfer is expected to be completed at the end of the first half-year. Outlook The outlook for the second quarter is tied to the continued market performance in general and the performance of the IT and Telecom sector in particular. A continued weak market performance may give rise to special reservations for a valuation undermining, primarily in corporate finance-related holdings. The divestment of PP Privata Placeringar, however, considering the possible reservations above, is expected to affect earnings positively by at least SEK 20 million during the second quarter. Stockholm, April 23, 2001 Anders Böös, Chief Executive Officer,Telephone: +46 8-696 17 00 ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/04/23/20010423BIT00290/bit0001.doc The full report http://www.bit.se/bitonline/2001/04/23/20010423BIT00290/bit0001.pdf The full report