Phorm Finds Cheer Amid More Huge Losses

Behavioural ad targeting specialist Phorm has announced interim results for the six month period ended 30 June 2011. The firm continues to burn cash at the rate of more than $2m a month but reports promising results from its operations in Brazil and now Romania.

Operating losses for the period were $13.0m, down somewhat from a year previously ($15.7m), but losses after taxation were up from $15.7m to $19.6m. Monthly cash burn fell slightly from $2.3m to $2.1m, but short-term debt stood at $31.3m as at 30 June 2011 while the firm's cumulative losses to date are a tidy $150.9 million.

Interim Chairman and CEO Kent Ertugrul says the year to date has seen 'continued advances in our Brazilian business, a launch in Romania and continued progress in business development worldwide'. Ertugrul says the Brazilian user base has - after a longer time than expected - grown sufficiently for the running of commercial advertising campaigns and the generation of revenue. All the advertisers involved in the year's test campaigns have subsequently re-booked with revenues rising from current miniscule levels.

Opt-in response rates have helped to show that 'state of the art privacy and commercial viability are not mutually contradictory' according to the Chairman, who adds that a series of business development announcements are due 'between now and the end of the first quarter of next year', including one or more 'in the mobile space'.

Very early opt-in rates and initial feedback from web sites and advertisers in Romania have closely followed results in Brazil, according to Phorm, and Ertugrul is optimistic that the large Romtelecom user base and the low cost base of local operation 'will result in the near term profitability of Phorm Romania'.

Phorm's costs for the first half of 2011 included $3.48m on research and development - almost identical to the H1 2010 figure - and $9.2m on sales and administrative expenses, down from $11.9m. Additional funding will be required to continue in business this year, says the company, and discussions with possible investors are underway.

Web site: www.phorm.com .