INTERIM REPORT OF PROHA PLC FOR THE PERIOD JANUARY 1 - JUNE 30, 2002

INTERIM REPORT OF PROHA PLC FOR THE PERIOD JANUARY 1 - JUNE 30, 2002 - The Proha Group's net result for the 6-month period was EUR 0.9 million positive, which exceeds the result of the corresponding period in 2001 (EUR -3.2 million) by EUR 4.1 million - Operating profit (EBIT) was EUR 1.4 million (operating loss EUR -2.8 million) - The Proha Group's net sales amounted to EUR 42.0 million (EUR 42.2 million, 1-6/2001) - Net sales maintained last year's level despite the challenging situation in the software market - Streamlining of operations and cost savings have improved profitability - During the first half of the year, customers acquired 49,000 end-user licenses from Proha, of which 27,000 were delivered in the second quarter - Proha management keeps to its previous result estimates for 2002 THE FIRST HALF IN BRIEF The performance in 2002 has followed the management's previous estimates. The situation in the software market is still challenging. In the Project Management business area, significant progress was made to expand from operative solutions provider to executive management's strategic partner. The international sales of Artemis' strategic management solution, PortfolioDirector, improved in the second quarter by agreements worth about EUR 4 million. Most of these deals will be recognized as income in 2002. In the second quarter of 2002, Artemis' customers bought licenses for 27,000 new users. The number of licenses sold grew by 23% compared to the first quarter. Starting from January, a total of 49,000 new licenses have been sold. Worldwide, the number of Artemis licenses sold amounts to 455,000. The Artemis subgroup has streamlined its operations by organizational rearrangements. New customer-oriented organization shortens the cycle of product development and better facilitates the use of global resources. Net sales for the Financial Management business area, EUR 3.1 million, grew by 32% compared to the corresponding period in 2001 (EUR 2.4 million). The Financial Managemet completed its fully electronic service solutions; Accountor Finance Department for large and medium-sized enterprises and ProCountor service concept for small and medium-sized companies. Especially Finance Department solutions gained significant new customers. Transfer of customer information into the Internet-based ProCountor system begun in the second quarter. This process clearly affected the result of the period. Towards the end of the second quarter, the focus was turned from technical development to customer acquisition and continuous service enhancement. The new concept will deliver both for customer and internally significant improvements in the use of resources by the end of the year. Net sales of the Internet Technologies, EUR 1.1 million, grew by 6% compared to the corresponding period in 2001 (EUR 1.0 million). Especially, the significance of ASP services in the Group's offering in Finland has grown. The Proha Group provides management solutions that cover all project and financial management needs on all organizational levels; strategic, tactical and operative. The solutions help the corporate customers to implement their strategy, allocate their resources productively and control their operative functions as profitably as possible. The Group operates through three business areas. The largest business area is Project Management (Artemis subgroup), whose net sales generate about 90% of the Group's net sales. PROSPECTS FOR THE NEAR FUTURE Proha management keeps to its previous result estimates for 2002. The full-year result is expected to be positive, even without any increase in net sales, as previously estimated. The Group's net sales growth target has been 0-20%. Net sales is expected to grow during the second half of the year but under current market conditions the upper limit of the growth target will hardly be reached. The division of net sales to one time license revenue, recurring license revenue and service revenue will in the present market situation be very strongly lead by services; ideally, each would account for one third of net sales. Artemis' growth targets are based on new strategic offerings and tactical resource management solutions. Their markets have better growth potential than traditional project management. The significant delivery agreements of the strategic-level project portfolio management solution, PortfolioDirector, signed during the period, are a good indication that the chosen concept is functional and meets the needs of the market. The volume of offers of PortfolioDirector is more robust, and pilot projects have been launched. Demand for resource management solutions is growing, the development work of new solutions is in the final stage, and the first extensive installations to the customers' production environment have been made. In the area of resource management, Proha expects substantial growth during the remainder of 2002. Effective allocation of project resources is becoming an important competitive advantage in the customers' industries. NET SALES AND RESULT For January-June 2002, the Group's net sales amounted to EUR 42.0 million (EUR 42.2 million). In the present market situation, this can be considered good. The performance is based on Proha's extensive and diverse customer base as well as its operation close to the customers' core businesses. Resting on public information, the management of Proha anticipates that the non- declining business volume has increased the market share. The emphasis of the net sales is strongly on services that account for 58% of the net sales amounting to EUR 24.3 million. Compared to the first quarter, the sales of one time software licenses grew by 28% in the second quarter to EUR 4.6 million, constituting 21% of the net sales of Q2. The share of recurring license revenue of the net sales in the second quarter was 20%, amounting to EUR 4.5 million. Measures for streamlining the operations and reducing the costs generated a positive operating profit (EBIT). Proha's cumulative operating profit for the first two quarters of 2002 was EUR 1.4 million positive, compared to the corresponding period in 2001, which showed a loss of EUR -2.8 million. The operating profit for the second quarter, EUR 1.7 million, improved substantially compared to the first quarter of 2002 (EUR -0.3 million). The amortization of consolidation reserve affected the result. The consolidation reserve originates from the additional expenses of the Opus360 transaction, and it was taken into account in the acquisition price. The consolidation reserve was amortized within 11 months and ended in June 2002. This period the consolidation reserve had a positive impact on the result by EUR 3.3 million. The Group expense level is now lower than during the amortization of the consolidation reserve, but the result is still affected by the cost of Artemis operating as a publicly held company in the United States. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/08/22/20020822BIT00130/wkr0001.doc The full report http://www.waymaker.net/bitonline/2002/08/22/20020822BIT00130/wkr0002.pdf The full report