SOURCE: FIMALAC

April 24, 2008 12:12 ET

FIMALAC : First half revenues (October 2007 - March 2008)

PARIS--(Marketwire - April 24, 2008) -


Like-for-Like Revenue:

FITCH RATINGS - 20.5%ALGORITHMICS + 7.9%

FIMALAC - 16.3%

I) First half revenue

Fimalac's consolidated revenue for the first 6 months of fiscal 2008 (October 2007 to March 2008) amounted to EUR 297.9 million.

Reported revenue included a EUR 26.2 million negative currency effect due to the weakness of the dollar and sterling. There was a positive impact of EUR 18.4 million on revenue from the consolidation of Korea Ratings from April 2007, all of which is included in the Fitch Ratings line (of this amount, EUR 8 million related directly to Ratings activities).

+--------------------+--------------------+--------------------+-----------
-+--+
|   (in EUR  millions)  |October 2006-March  |October 2007-March  |   %
change |  |
|                    |2007                |2008                |
|  |
+--------------------+--------------------+--------------------+-----------
-+--+
|                    |                    |                    |
(reported)|  |
+--------------------+--------------------+--------------------+-----------
-+--+
|  Fitch Ratings     |               313.3|               246.1|     -
21.4%|  |
+--------------------+--------------------+--------------------+-----------
-+--+
|  Algorithmics      |                54.1|                53.5|      -
1.1%|  |
+--------------------+--------------------+--------------------+-----------
-+--+
|  Eliminations      |               - 1.7|               - 1.7|
|  |
+--------------------+--------------------+--------------------+-----------
-+--+
|Consolidated revenue|               365.7|               297.9|     -
18.5%|  |
+--------------------+--------------------+--------------------+-----------
-+--+
+--------------------+--------------------+--------------------+-----------
-+--+

+--------------------+------------------+
|   (in EUR  millions)  |      % change    |
|                    |                  |
+--------------------+------------------+
|                    |  (like-for-like*)|
+--------------------+------------------+
|  Fitch Ratings     |           - 20.5%|
+--------------------+------------------+
|  Algorithmics      |            + 7.9%|
+--------------------+------------------+
|  Eliminations      |                  |
+--------------------+------------------+
|Consolidated revenue|           - 16.3%|
+--------------------+------------------+
+--------------------+------------------+
(*) Based on a comparable scope of consolidation and at constant exchange rates

1) FITCH RATINGS

Fitch Ratings reported revenue of $362.6 million (EUR 246.1 million) for the first half of fiscal 2008, compared with $405.7 million (EUR 313.3 million) for the year-earlier period. This represented a decline of 10.6% on a reported basis in dollars, corresponding to Fitch Ratings' functional currency. However, excluding the effects of the weaker dollar and sterling and the first-time consolidation of Korea Ratings, like-for-like revenue in euros declined by 20.5%.

Volatility and uncertainty in the credit markets increased during the most recent quarter, negatively impacting market debt issuance activities, particularly in the Structured Finance areas of US Mortgage and Global CDOs. Corporate Finance, that is comprised of Corporates, Banks, Insurance and Public Finance, showed modest growth. Subscription revenues continued to rise strongly.

2) ALGORITHMICS

On the other hand, in the current financial environment, Algorithmics reported increases in License Fees and Managed Services, reporting total revenue of $78.8 million (EUR 53.5 million) for the first half of fiscal 2008 versus $70.1 million (EUR 54.1 million) for the year-earlier period. Reported growth in dollars came to 12.5%. Like-for-like revenue in euros rose by 7.9%.

II) Recent developments and outlook

The credit markets continue to be difficult and it is uncertain when the present credit environment will ease. Based on the information currently available on markets, Fitch Ratings Revenues for the fiscal year ending September 2008 could decrease by roughly 20% on a like-for-like basis as compared to fiscal 2007.

Fitch Ratings is cautiously managing all costs, specifically compensation expenses. Ratings headcount could be reduced by roughly 8-10% of the work force by September 2008. In addition, variable compensation is expected to be significantly reduced during fiscal 2008.

Nevertheless, while credit markets remain pressured, the need for improved risk ratings and analysis, as well as better risk management tools and software, provide opportunities for Fitch Ratings and Algorithmics.

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