Iona loses €287m over write-off

Iona Technologies reported a net loss of $308 million (€287.26 million) for the fourth quarter of 2002 because of a decision to write off the goodwill on a string of earlier acquisitions.

But the Dublin-based software firm said it broke even on an operating basis during the fourth quarter following a restructuring of its costs.

Iona's pro forma results came in ahead of analyst expectations with turnover at $30.1 million and a net loss of just $100,000 or 0 cents per share in the quarter. For the full year 2002, the company reported revenues of $123.2 million and a pro forma net loss of $28.1 million, or $0.88 per share.

The full-year pro forma results for 2002 show a big drop on the previous year when Iona reported revenues of $180.7 million and a profit of eight cents per share. The weaker performance in 2002 reflects a significant downturn in the technology sector in the year.

Mr Gerry Hennigan, analyst with Goodbody Stockbrokers, said the writedowns by Iona were on a string of acquisitions made over the past few years. These included a $270 million acquisition of US firm Netfish, which Iona announced in February. The writedowns were mainly accounting issues for Iona, said Mr Hennigan.

Iona chief executive, Mr Barry Morris, said the firm reported 33 per cent sequential licence growth in the quarter, which was evidence of the continuing demand for Iona's current product offerings.

He also said Iona would release its next-generation Web services integration products in the first quarter and he was optimistic about their potential in the market.

In a conference call with analysts, the firm said it closed four deals worth more than $1 million each, and 25 deals worth more than $250,000 in the quarter.

But Iona also gave cautious guidance for the first quarter of 2003, sending its shares down 5 per cent in early Nasdaq trading. In its trading statement, Iona said it expected revenue in the range of $24 to $26 million in the first quarter of 2003. The company expects a pro forma net loss per share in the range of $0.11 to $0.15. Shares in Iona fell 27 cents to $3.00 on the Nasdaq, a drop of 8.26 per cent.

Meanwhile, Iona announced that Mr William Burgess, the former managing director of IBM Ireland, would join its board. Mr Burgess is also chairman of the Irish National Competitiveness Council and chairman of the Digital Hub, an initiative to create a digital media area in Dublin.