Itera

Earnings Release • Apr 27, 2017

Good profitability

Good profitability

Oslo, 27 April 2017: Itera achieved organic revenue growth of 12% in

the first quarter of 2017 relative to the same period in 2016. This

growth was achieved through service-related revenue onshore and

nearshore, while subscription-related revenue was virtually

unchanged.

The Group reports operating revenue of NOK 118.6 million (NOK 105.6

million) for the first quarter of 2017, which represents growth of

12%.

The Group's total operating expenses in the first quarter of 2017

were 7% higher at NOK 107.3 million (NOK 100.2 million).

The operating result before depreciation and amortisation (EBITDA)

for the first quarter of 2017 was NOK 16.1 million (NOK 10.4

million), while the operating result (EBIT) was NOK 11.3 million

(NOK 3.8 million). The EBIT margin was 9.5% as compared to 3.6% in

the first quarter of 2016.

Cash flow from operational activities was NOK -0.8 million (NOK -3.5

million) in the first quarter of 2017. This is NOK 16.9 million

lower than EBITDA, and this was primarily due to seasonal increases

in work in progress and accounts receivable, as well as to lower

accounts payable than at 31 December 2016.

- In order to meet the strong market demand, we have focused

strongly on recruitment in the first quarter. Despite a tight labor

market, we have recruited net 26 new employees during the quarter.

Over the past year, we have grown with 42 employees, says Arne Mjøs,

CEO of Itera.

The revenue from Itera's 30 largest customers grew by 22% in the

first quarter of 2017 and accounted for 77% of the Group's operating

revenue, up from 70% in the first quarter of 2016.

The proportion of Itera's capacity that is located nearshore (its

nearshore ratio) was 37% (36%) at the end of the first quarter. The

Group has development centres in Slovakia and Ukraine and has a

strategic target of achieving a nearshore ratio of 50% over the long

term.

- We pursue our strategy and are pleased with the achieved results.

The demand for the Group's services is strong, both in traditional

areas such as developing and hosting applications, but also to an

increasing extent in emerging areas of technology such as machine

learning, artificial intelligence and robotics. We find our service

spectrum well-suited to the market situation, says Arne Mjøs, CEO of

Itera.

For more information:

Arne Mjøs, CEO Bent Hammer, CFO

+47 905 23 172 +47 982 15 497

arne.mjos@itera.no bent.hammer@itera.no