Compared to the base period, the sales of the Synergon Group grew substantially during the first quarter of 2006.
As the consequence of the lower level of contribution, however, that increase, due primarily to hardware orders by the telecom and the public administration sectors is hardly noticeable in the profit lines. Despite of more, non-recurring impacts of provisions of nearly HUF 100 million, the Group achieved a net profit of HUF 20 million during the quarter.

The parent company played a major role in the increment of the Group's sales. Between them, Synergon and SAO increased their sales by 30 percent as the collective result of the considerable growth of the demand related to the expansion of the broadband networks of the telecom sector and the non-recurring hardware orders of the public administration sector. The insurance and financial sector also provided a steady volume of sales during the period; a lower level of sales was generated, however, in the industry and services sector as the consequence of a lower contract volume carried over from the previous year than during the same period of 2005. Following the preparations during last year, at the beginning of 2006, the Company won major projects in the local government sector, financed from the Structural Funds of the EU.

During the first three months of the year, Infinity surpassed its sales revenue by 13% compared to the one at the beginning of last year, achieved higher sales and was able to increase its contribution through higher service-content projects, while the efficiency-increasing measures also made a clear impact. The company, recording a substantially lower loss than during last year, intends to achieve its main goal, i.e. long-term profitable operation, through further increasing sales; substantial improvements have started concerning the sales organisation during the period.

During the quarter under review, Span generated a loss, due in part to orders carried over to the second quarter and in part to the fact that the Croatian company accepted public administration orders with minimal levels of contribution in order to retain its market positions.

The results of Fibex were temporarily prejudiced by the facts that cabling works started later than expected due to unfavourable weather conditions and that new recruitments took place during the quarter in order to meet the growth anticipated during the year.

During the quarter, the separation of the management of the Group and the parent company was completed and the development of the strategy of the Synergon Group for the next three years has begun under the supervision of the new managers. Key elements of the new strategy include growth in excess of the market average, achieving a higher profit level, taking advantage of Group-level synergies and, in that context, the re-definition of the Group's product and service portfolio. It is expected that Synergon will publish its new medium-term strategy following the multi-phase strategy development process, in September.