Baltimore Technologies, the Dublin-based technology firm, made a pre-tax loss of £43 million sterling (€69 million) in the six months to June 30th, an improvement on losses of £550 million in the same period last year.

The company, which faces an ongoing struggle to break even before it runs out of cash, also confirmed it had cut its workforce to just 382, from almost 1,200 in June 2001. Baltimore now employs fewer than 100 people in the Republic following a massive restructuring after successive profit warnings in 2001.

Revenues at the firm fell to £22 million in the six months to the end of June, down from £38.9 million in the first half of 2001. Losses before interest, tax, depreciation, amortisation and exceptional items were £9.8 million, significantly better than the £39.7 million in the same period last year.

Operating expenses before exceptional items for the half-year to the end of June were £38.6 million, representing a decrease of 79 per cent from £181.3 million on the same period in 2001.

The huge difference in pre-tax loss for the current period was due to massive writedowns on the value of Baltimore's business last year. Non-cash write-offs totalled just £20.3 million in the six months to the end of June, compared to £503.1 million last year.

Mr Phil Smith, chief financial officer at Baltimore, said the company was now in a consolidation phase and did not expect to have to cut back any further on jobs. He said the company would break even in cash terms in the first half of 2003, he added.

Baltimore had a cash pile worth £23.1 million at the end of June, down from £53.9 million at the same time last year. Mr Smith said the company would not have to raise cash through a share placing.

But he said the company could improve efficiency in the future and it would be a question of refining the company's operations. If conditions changed and the firm required extra cash, Mr Smith said it would consider selling and leasing back property in Britain.

Mr Gerry Hennigan, analyst with Goodbody Stockbrokers, said the next couple of quarters would be critical for Baltimore as it attempted to turn a profit. "If they post these kind of figures again, it would help there cause. They need to either reduce their capital expenditure or increase margins," he said.

In a statement, Baltimore said management remained confident that there was a profitable opportunity for the company's authentication technologies.

Mr Smith said companies were beginning to think again about beginning large software infrastructure projects like the ones Baltimore offered.