Berlin, October 4, 2022 - The Executive Board of PSI Software AG has decided to adjust the annual target for the operating result from continuing operations (EBIT) to 20 million euros due to the course of business in the Municipal Utilities business (current consensus estimate: 25.1 million euros). The Municipal Utilities business, which generates around 5% of Group sales, was exposed to further cyclical declines in customer investments in the third quarter.
Losses from a newly developed Redispatch 2.0 software were already recorded in the second quarter. This software helps distribution system operators and municipal utilities in particular to play a greater role than before in the integration of renewable energy through balancing measures and to relieve the transmission grids. In parallel with the development process of the software, the regulatory basis for Redispatch 2.0 was changed many times by the regulation authorities and the BDEW association, and the technical requirements were tripled in total as a result. Compensation payments for these additional services caused by regulation are being clarified, but clarification is expected to continue beyond the end of the year.
Against this background, the PSI Executive Board has decided to adjust the allocation of employees in the PSI Group and to implement organizational measures to bundle sales and project execution in the municipal utilities market segment under an experienced management team. In order to deliver future projects in a more product-oriented and automated manner, development will also be bundled and the division's development budget increased from 4 million to 10 million euros.
The other business units of the Energy Management Segment (gas grids, energy trading, public transport) are developing as planned. As expected, the Production Management segment will increase order intake and sales by 15% and earnings by 10% in 2022. The North American business in particular continues to develop very strongly. In total, new orders and sales of the PSI Group are expected to be slightly above the previous year, as already forecast in the half-year report. For the operating result (EBIT) from continuing operations (without Russia) the management now expects 20 million euros.
For 2023, the PSI Executive Board plans a return to the long-term growth and earnings increase trend. The strategic developments (PSI App Store/cloud platform) are not affected by the aforementioned problems, so that the PSI Executive Board continues to aim for the long-term target of 54 million euros EBIT for 2026, irrespective of short-term economic fluctuations.
The PSI Group develops its own software products for optimizing the flow of energy and materials for utilities (energy grids, energy trading, public transport) and industry (metals production, automotive, mechanical engineering, logistics). The industry-specific products, which are built from standard components, are sold both directly and via the multi-cloud PSI App Store and can also be customized by customers and partners themselves. PSI was founded in 1969 and employs over 2,200 people worldwide.