Shares in Dublin-based directory assistance provider Conduit fell 29.41 per cent yesterday following results, which suggested it would not break even on core earnings this year.

Mr Liam Young, chief executive of Conduit, said the firm would make a net profit early next year and be profitable before interest, tax, depreciation and amortisation (EBITDA) within the next six months.

However, Conduit shares closed down €1.25 to finish at €3 on the Neuer Markt on expectations of more difficult trading conditions for the next six months.

Weakness in Conduit's software and Swiss divisions weighed down half-year revenues at €23.8 million (£18.7 million), an increase of 90 per cent on the same period last year. Operating losses widened to €7.3 million, up from €1.9 million in the half year to September 30th, 2000. Net loss per share rose to 37 cents, up from 10 cents on the same period last year.

Conduit reduced its EBITDA loss to €1.5 million in the second quarter 2001, down from €3.5 million in the first quarter.

Mr Young said certain practices had adversely affected Conduit's Swiss operation, which made up less than 10 per cent of Conduit's overall business. Conduit had not been allowed to offer a call completion service, although this was offered by its main competitor, Swisscom. In addition, the existing default directory code had not been removed in Switzerland despite previous indications that it would be, said Mr Young.

He said this had caused the firm to reduce its marketing spend to zero, although Conduit was unlikely to exit the market.

Mr Young said the company would focus on efficiency to get the firm to a profitable situation. He said this would not result in lay offs although Conduit has reduced its headcount to 1,417 employees, from 1,566 at June 30th.

Mr Young said Conduit would adopt a cautious approach to its expansion in the key UK market, which is expected to be deregulated shortly.

"There are unlikely to be as many competitors as we thought," said Mr Young. "This will give us room to plan our advertising spend and not do it all at once."

He said Conduit would meet investment group 3i shortly to discuss the future of its UK joint venture called 118 Ltd. 3i owns 45 per cent of 118 Ltd and 10 per cent of Conduit following its purchase of Finnish telecoms firm Sonera's directories business last week.

Mr Young said the UK company would need €20 million investment over two years to build its business in the UK.