Swiss back office banking systems vendor Temenos has moved to restructure its balance sheet after reporting an operating loss of $44.4 million for the year ending December 2002, compared to a profit of $15.6 million in 2001.
Temenos is reporting a 42% drop in revenues for Q4 2002, to $20.1 million (Q4 2001: $34.64 million). For the year as a whole revenues are down to $113.3 million from $140.9 for 2001. Income from license fee sales bore the brunt of the downturn at $6.3 million for Q4 2002 versus $16 million for Q4 2001, and $55.9 million for the full year against $79.7 million a year earlier. Service revenues also declined, but margins improved as the vendor reduced its reliance on external consultants.
Temenos says growth was strongest in the Asia-Pacific region, Russia, the Middle East and western Europe, while performance in the US and Africa remained weak.
The fourth quarter operating loss of $26.9 million includes a total of $10.7 million in one-off charges, relating to restructuring, taxes, and a write-off of Temenos' 20% stake in Finantix, acquired in February 2002.
The vendor last month restructured its loan financing to extend repayment dates for $20m of debt into 2004, and to provide an additional $15 million of working capital facilities to continue into 2004.
Looking ahead, an operating cash inflow of $8.4 million in Q4 2002 compares favourably with $0.9 million recorded in Q4 2001. The quarter cash flow also benefited from upfront licence payments from strong Q4 signings, resulting in a deferred revenue figure of $22.2 million, which will be recognised as licence revenues during 2003.
During the quarter the firm closed deals with Bank Leumi in Switzerland, Friesland Bank in Holland, Dunfermline Building Society in the United Kingdom, Saudi Hollandi in Saudi Arabia, Jih Sun in Taiwan, IE Bank in the Philippines and a number of credit unions in Ireland. Temenos also completed a global licensing agreement with Bank Leumi for the implementation of the Globus core abnking package across its international operations
Temenos is reconfirming guidance for full year 2003 revenues of approximately $130 million. Anticipated 2003 revenues originating from business closed during 2002 represent 74% of target revenues.