INTERIM REPORT JANUARY – JUNE 2012

(The figures in brackets refer to the same period of 2011 unless otherwise specified.)

SECOND QUARTER 2012

• The transaction volume for the second quarter was SEK 1,134,371 thousand (1,079,154), an increase of 5 per cent compared to the same period of last year.

• Transaction-based revenue for the second quarter was SEK 8,027 thousand (7,713), up by 4 per cent compared to the same quarter of 2011.
• Profit/loss before amortization decreased by SEK 838 thousand to SEK -499 thousand (339).

• Profit/ loss after tax fell by SEK 475 thousand to SEK -1,930 thousand (-1,455).

• Earnings per share were SEK -0.02 (-0.02).

SIGNIFICANT EVENTS IN THE SECOND QUARTER

• Together with its collaboration partner Scandisys, Paynova launched a PCI-compliant solution for travel agencies.
• Paynova signed an agreement with Resia for card payments via telephone sales.
• Launch of a payment interface for mobile e-commerce.
• Agreement signed with Big Travel.

JANUARY - JUNE 2012

• The transaction volume for the first half of the year was SEK 2,218,120 thousand (2,034,861), an increase of 8 per cent compared to the same period of last year.
• Transaction-based revenue for the period was SEK 15,687 thousand (14,997), up by 5 per cent year-over-year.
• Profit/loss before amortization decreased by SEK 1,065 thousand to SEK -112 thousand (953).
• Profit/loss after tax declined by SEK 398 thousand till -3,102 thousand (-2,704).
• Earnings per share amounted to SEK -0.04 (-0.03).

SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD

• After the end of the period, a risk for a credit loss has arisen. A provision of SEK 1.6 million has been made for this risk.

COMMENTS FROM THE CEO

Paynova is continuing its efforts to intensify market cultivation and strengthen the service offering. Transaction volumes increased by 5 per cent compared to the same period of 2011 – largely thanks to the new e-merchants that signed up during the year. At the same time, we are aware that we can expect persistent downward pressure on mar-gins over time. In the past quarter several major merchants decided to use Paynova’s services, not least in the travel industry (Resia, Big Travel), for which Paynova has developed a secure new payment service. The solution, which enables travel agencies to accept card payments over the Internet and telephone without any need for costly PCI certification, has been well received and Paynova sees potential for growth in its market shares.

Our product development in the important mobile area has also advanced through Paynova’s launch of a new inter-face for mobile e-commerce during the summer. Paynova’s international character has always been a central aspect of the company and our service portfolio was reinforced during the quarter with the payment method Sofort, a key component for online merchants who need to reach target groups in Germany with several European markets.

Another of Paynova’s strengths is our operating reliability, which is a decisive parameter for merchants who regard the Web as business critical. Paynova works continuously to stay ahead of the competitors in being able to offer its customers the most stable payment services.

Revenue from the associated company Chinova remained low during the second quarter. As previously announced Chinova is in the process of enhancing its business model and is carrying out a related financing aimed at boosting transaction growth starting in the third quarter of 2012.

Overall development for both Paynova’s transaction volumes and new sales is positive, and at the time of writing this report it appears likely that this trend will last throughout the coming quarter.

Simon Thaning

Stockholm, August 2012

(For full report, see attached file)