In the litigation between PSI AG and the State of Berlin concerning the Basis II Project (social welfare software), the Circuit Court of Berlin has ruled in favor of the State of Berlin. The ruling in this appeal means that PSI will have to perform a value adjustment of 4.2 million euros for the project which was commenced in 1997 and broken off in 2000. The value adjustment has no cash effect. PSI is considering other legal action. With the Circuit Court ruling, the relevant trial risks, which were reported since the end of 2002, have been clarified.
The value adjustment results primarily from the lack of acceptance of completed services by the State of Berlin in 2000. The contracting party applied their right to refuse acceptance without justification. Due to the fact that, in PSI’s opinion, political changes being the reason for breaking off the project, PSI will put an end to their involvement in this area.
Taking the value adjustment into consideration, PSI is expecting an EBIT of –5 million euros for the current quarter as a result of stable orders in the field of Production Management and a rejuvenation of the Network Management business.
PSI AG develops and integrates individual solutions, on the basis of its own software, for the management of large networks (electricity, gas, oil, telecommunications, transport), cross-company production management (steel, chemicals, machinery, automotive, logistics) and information management for government and service providers. PSI was founded in 1969 and employs 1,150 persons in the group.
www.psi.de
