Translation software developer Babylon Ltd. (TASE:BBYL) today published its financial report for the third quarter of 2009. Revenue rose 21% to NIS 20.5 million for the third quarter from NIS 16.9 for the corresponding quarter.
Net profit fell 8.8% to NIS 3.4 million for the third quarter from NIS 3.7 million for the corresponding quarter of 2008, but total net profit, after financial adjustments, actually rose to NIS 3.4 million (NIS 0.10 per share) from NIS 3.1 million.
Operating profit fell 61.8% to NIS 1.3 million for the third quarter from NIS 3.5 million for the corresponding quarter. Online advertising and marketing costs jumped 148% to NIS 7.2 million for the third quarter (out of total marketing expenses of NIS 12.4 million) from NIS 2.9 million for the corresponding quarter, while software sales fell 5% to 13.3 million from NIS 14 million.
Babylon CEO Alon Carmeli said, "Traffic and interest in Babylon's services continue to grow from quarter to quarter, as seen in the increase in the number of customers. Nonetheless, we saw a seasonal decline in third quarter revenue from enterprises in several countries. The erosion in the operating profit, due to the launch of the new subscribers' program, was anticipated and taken into account."
Babylon said that the new subscribers' program for private customers is increasing its customer base and customer value, although it reduced cash flow during the third quarter.
Babylon's share rose 0.3% by midday to NIS 5.82, giving a market cap of NIS 244 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 18, 2009
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