LUXEMBOURG/NUREMBERG (dpa-AFX) - Software provider Suse has capped its medium-term growth ambitions. In the medium term, the group's revenue is now expected to grow in the mid to high tens of percent annually, Suse announced in Luxembourg on Thursday. Previously, the company had planned to grow at an average of around 20 percent per year. The reduced sales targets did not do the share any good, and the price plummeted.

The SDax-listed stock fell by more than six percent to 16.84 euros in the morning. The share price has already lost considerable ground in the past year; the record high of almost 44 euros from the beginning of 2022 is now a distant memory. The reduction in sales targets hardly came as a surprise, wrote Jefferies analyst Charles Brennan. Hardly any investor had expected higher margins, he commented on the increased medium-term outlook for profitability.

Suse CEO Melissa Di Donato, in fact, wants to drive the earnings margin before interest, taxes, depreciation and amortization adjusted for special effects up to over 40 percent instead of just in the direction of 40 percent. According to JPMorgan expert Toby Ogg, market estimates for operating profit could now rise by more than 20 percent. However, the fact that the company has become more cautious about generating cash inflows from current operations is likely to dampen investors' spirits.

In the current fiscal year (to the end of October), the specialist for Linux operating systems with operational headquarters in Nuremberg, Germany, is sticking to its already known forecast of an 11 to 13 percent increase in currency-adjusted sales and a margin above the previous year's figure of 37 percent.

In the past fiscal year, Suse stemmed its losses. The bottom line was a net loss of $39.5 million. A year earlier, Suse was still in the red at $207.6 million. In addition to the growth of the business, cost reductions contributed to the lower loss.

Management confirmed the preliminary figures for fiscal year 2021/22, which ended at the end of October. Sales climbed by 17 percent to 653 million dollars in the full year, the margin before interest, taxes, depreciation and amortization, adjusted for special effects, reached 37 percent, as in the previous year./men/stw/jha/