1.1.2.3. Financial transactions Stated in absolute terms, the impact of financial transactions on the Group’s reported result was smaller than in the fourth quarter of 2006. In the three months ended December 31, 2007, net financial expense totaled 0.4 million euros, down from 1.1 million euros in the same period the previous year.
1.1.2.4. Result before taxes and net result The Group ended the fourth quarter of 2007 with a result before taxes of 11.0 million euros and a tax liability of 4.8 million euros. The pretax amount was greater than in the same period in 2006, when it totaled 5.6 million euros, subject to a tax liability of 2.3 million euros. The tax liability recognized in the fourth quarter of 2007 reflects in part the derecognition of deferred-tax assets carried by the Group’s Parent Company and DiaSorin GmbH on their balance sheets, which was required in response to a reform of the tax systems in force in both countries and a resulting reduction of the respective corporate income tax rates. As a result, the tax rate applied in the fourth quarter of 2007 was higher than usual. The consolidated net result for the last three months of 2007 amounted to 6.1 million euros, compared with 3.3 million euros in the same period in 2006.
1.1.3. Analysis of consolidated cash flow The table below shows the highlights of the consolidated cash flow statement and the changes that occurred compared with the previous year. ANALYSIS OF CASH FLOW Fourth quarter
(in thousands of euros) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD Net cash from operating activities Cash used for investing activities Cash from (used for) financing activities Net change in cash and cash equivalents CASH AND CASH EQUIVALENTS AT END OF PERIOD (*)
(*)
Full year (*)
2007
2006
22,483
16,453
(*)
2007
2006
8,718
6,116
6,563
7,213
30,322
33,976
(4,319)
(4,719)
(15,526)
(16,952)
(16,361) (14,117) 8,366
(10,229)
(15,148)
(14,422)
(7,735) 8,718
(352) 8,366
8,718
2,602
Unaudited data.
In the fourth quarter of 2007, cash flow from operating activities totaled 6,563,000 euros, down from 7,213,000 euros in the same period in 2006, owing mainly to a change in the structure of working capital. More specifically, trade receivables and inventories grew during the closing quarter of 2007 reflecting an increase both in revenues and in manufacturing activity. Inventory levels were also up due to an increase in emergency stockpiles of some strategic materials.
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