The company, which counts the French state, France Telecom, Japanese computer equipment group NEC, and US telecommunications equipment maker Motorola among its shareholders, posted a first-half net profit of 1.3 million euros (1.5 million dollars).

The result compared with a net loss of 524.2 million euros in the first half of 2002 and a 24-million-euro loss in the second half of 2002.

Bull chief executive Pierre Bonelli said during a conference call the company aimed to turn a net profit of 2.6 million euros for the whole of 2003.

Despite the improvement in the company's bottom line, sales fell 18 percent to 642.4 million euros in the first half of this year from 780 million in the same period in 2002.

Core earnings, measured as earnings before taking profits, interest payments or exceptional items into account, reached 20 million euros in the first half compared with a loss of 151 million euros as in the first half of

Bull said that in the second half of this year it expected sales of 622 million euros and core earnings of 15.8 million euros, though the market "remains difficult."

It said first half core earnings were better than the forecast given with its 2002 results.

"Following a positive operating result in the second half of 2002, it shows the strength of recovery in Bull's operations in a still very depressed IT market," it said.

Bull said it is on a lasting trajectory of profit at the operating level, "subject, of course to a favourable outcome to the recapitalisation process."

Debt fell to 581 million euros at end-June from 637 million at end-December, the company said.

On October 1 EU competition authorities decided to take France to the European Court of Justice for its failure to collect repayment of a state advance of 450 million euros to Bull as required under EU approval for the aid.

In November 2002, the European Commission approved the aid but on condition that it be repaid by June 17, 2003.

Shares in the company, which had been suspended as the results were released, soared 28.38 percent in initial exchanges once trading resumed to 0.95 euros

SPACE.WIRE