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MELBOURNE IT says the first five months of the year have been characterised by a tough trading environment and that those difficult conditions are expected to persist.

At the company's annual general meeting in Melbourne yesterday, company chief Theo Hnarakis said the difficult trading reflected a continuation of a slowdown seen at the end of last year. Melbourne IT, a supplier of domain registration and other online services, has seen the number of its names under management fall by 1.6 per cent, to 5.77 million by the end of April, Mr Hnarakis said, according to a slide presentation lodged with the stock exchange.
Mr Hnarakis said there was a global slowdown in domain name registrations. In the presentation, he said competitors were offering unsustainably low prices for domains and hosting, depressing company margins.
Domain name reseller partners were struggling in the first half of the 2009 calendar year, and there was expected to be a higher number of cancellations and expirations of domain names, he said.
The company's Advantate joint venture with Fairfax Digital had also been affected by tough trading conditions and was expected to lose $500,000 this year, but should hold a break-even position by year's end, he said.
Mr Hnarakis said revenues in the first half of 2009 were expected to show modest growth compared to the same period a year earlier, with earnings before interest and tax down.

http://www.theaustralian.news.com.au/business/story/0,28124,25542766-36418,00.html