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ISS Group 1H profit falls 59%

ISS Group 1H profit falls 59%

Industrial software developer ISS Group (ASX:ISS) has revealed it is expecting to report a 59% decline in 1H pre-tax profit to $1.27 million.

In a market update, the company said its unaudited results show that operating revenue fell 12% year-on-year to $9.8 million.

ISS, which develops software for energy, minerals and manufacturing companies, was also hit by $1.1 million in exchange rate losses due to the unusually strong Australian dollar.

In the second quarter, revenue grew 6% to $7 million, while pre-tax profit fell a more moderate 13% from 2Q10 to $2.8 million.

ISS said it had also managed to reduce the cost of sales for the half year by 8% after implementing operational efficiencies.

CEO Richard Pang said the company expects a “solid performance” in the second half, because it is pursuing a range of opportunities in Asia, while the Australian market continues to recover.

He said the strengthening Australian dollar continues to be a cause for concern, but that ISS has a robust working capital of $9.6 million to help it weather any issues.

These results are subject to change after the final audit. ISS shares fell 2.78% during Thursday's trading to $0.175.

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