GTG confident of end of year profit

Genetic Technologies (ASX: GTG) is expecting to finish the year in the black despite posting an interim profit loss yesterday.

The Fitzroy-based group said it was not concerned by the result, which saw it deliver a loss of almost $5 million in the six months to December 31, 2001.

On the flip side, Genetic Technologies' interim result, announced to the Australian Stock Exchange yesterday, also revealed a 135 per cent leap in revenue to more than $10 million.

Chairman Dr Mervyn Jacobson said the loss primarily reflected adherence to accounting requirements, including $2 million to cover depreciation of goodwill and patents and a $900,000 write down of an investment left over from its August 2000 merger with Duketon.

Jacobson said the revenue rise included the sale of its Cytomation investment and money raised through its testing services.

But he said the company expected revenue to rise further as a result of its recent licensing arrangements.

"I think in the course of the year the dominant trend will be to realise revenues from licensing," Jacobson said.

"All we are seeing now are some one-off adjustments that are not likely to be repeated."

He said the company's cash reserves remained strong and would continue to be directed into licensing deals.

"My expectation is that we will be profitable from licensing revenue by the full calendar year, and that is taking into account R&D expenditure and any extraordinary items," he said.

"I am looking forward to the first profitable year from a purely biotech perspective."