ASBISc Enterprises Marks 12 Years, Reports Strong Q3 Results

ASBIS Group's head company celebrates 12 years today since its incorporation in Cyprus on 9 November 1995. After a dozen years of steady growth the company has again announced strong financial results. The announcement follows the company's successful listing at the Warsaw Stock Exchange on 30 October 2007.

According to the financial report published today, during the three months from 1 July to 30 September 2007, the Group has experienced significant growth in its revenues. The Group's revenues increased to U.S. $933 million for the nine months ended 30 September 2007 from U.S. $667 million for the nine months ended 30 September 2006, representing an increase of 39.9 per cent., while the Group's net profits (after taxation) increased to U.S. $9.3 million for the nine months ended 30 September 2007, from U.S. $4.9 million for the nine months ended 30 September 2006, representing an increase of 89.8 per cent.

Siarhei Kostevitch , Chief Executive of ASBIS, commented:

"We are pleased and proud to report these results and have further progressed our strategy of further developing our distribution business alongside our own brand and finished products. This growth is a result of hard work and commitment by the management and now the company managed to raise funds from Warsaw Stock Exchange, will continue to enhance shareholders value".

Almost all product lines that the Group carries have experienced growth in both units and in money. The most significant growth factor was the sales of software licenses throughout all countries of the operations. This was linked to steps undertaken by several governments of the countries in which the Group operate to promote the use of software from legal sources.

Another major factor for the increased revenues was an introduction of a wider portfolio of the so called "A-branded" laptops in several countries where the Group operates. In particular, the Group has secured distribution agreements with Dell in countries like Russia, United Arab Emirates and other countries of the Gulf area. This has had a dramatic impact on the average sales price for the Group's products (since laptops are high value products) and, together with increased volumes, has significantly increased the revenues.

Sales of Toshiba laptops have also increased, allowing the Group to enjoy a leading position in the laptop segment in all countries, in which it is allowed to sell Toshiba laptops. Strong demand from countries of the former Soviet Union, as well as Central and Eastern Europe has additionally boosted Group's sales revenues.

The stabilization of commodity prices (CPUs, central processing units, and HDDs, hard disk drives) and the usual increased demand in September also contributed to the strong sales growth during the quarter ended 30th of September 2007.

The price war between two major suppliers of CPUs (Intel and AMD) has stopped and the introduction of new technologies by both of these vendors has also contributed to an increased average selling price ("ASP") of these products, which again contributed to an increased revenue.

An improved product mix has led to an increase in the gross profit margin and therefore to the overall gross profit for the Group, which has increased by 42 per cent compared to the corresponding period of 2006. This was achieved as a result of the Group's ability to enhance its product portfolio and to balance sales of finished products (including laptops) and private labels Prestigio and Canyon in all countries of its operations.

The Group's net profits (after taxation) increased to U.S. $9.3 million for the nine months ended 30 September 2007, from U.S. $4.9 million for the nine months ended 30 September 2006, representing an increase of 89.8 per cent. The Group has continued to enjoy economies of scale in all countries of its operations which contributed to an increase in net profitability. The increase in net profit margin was expected to follow the increase of revenues since a vast majority of the Group’s expenses is fixed and the increase in revenues translates into increased net profits.

The net profit margin has increased to 1% as opposed to 0.74% for the same period last year. This increase was a natural consequence of the increased gross profit margin, as well as a tight cost control.