Neonet extends the target date for financial goals and provides comment on the second quarter
The Board of Neonet has decided to extend the target date for the company’s long term financial goals by one year from 2010 to 2011. This entails that Neonet, no later than by 2011, will at least have doubled its operating revenues from the 2007 level (which amounted to SEK 689 m) and achieved an EBT of around SEK 400 m (which in 2007 amounted to SEK 134 m).
The background to the decision is the low activity on the stock exchanges during the first half of 2008. The trading volumes on the markets decreased during the first quarter and have continued to decrease during the second quarter, which have affected Neonet’s volumes and leads to declined revenues and significantly lower earnings compared to the first quarter of 2008.
The trend from the first quarter with changed trading pattern, a continued decrease in average commission levels among other things dependent on a changed client and market mix and low activity on the European exchanges has increased in the second quarter. In the short term, this negatively affects Neonet’s transaction margin. In the longer term the trading activity is expected to increase but Neonet is however dependent on the development of the volume on the world’s marketplaces.
“The number of active clients has continued to increase to its highest level and Neonet maintains on average its market shares on European exchanges, although the volumes are significantly lower” comments Simon Nathanson, President and CEO of Neonet.
The outlook for Neonet remains positive despite the current market trend has had a negative impact. Neonet is well positioned in the changing financial landscape with the development of new marketplaces and higher requirements for more advanced technology. The latest example of how the market is changing is the Nordic initiative in creating an alternative marketplace, Burgundy, where Neonet is participating. The demand for technology-based global trading and advanced trading software provided by Neonet is expected to continue to increase both regarding its brokerage services and software services, Neonet XG.
During 2008 Neonet continued to invest for growth by recruiting more staff and expanding our product offering. At present this course will not be discontinued.
The interim report for the second quarter will as stated earlier be published on July 21.