News

-Net sales were EUR 4.4 million, change -31.3% (EUR 6.4 million). Net 
sales were reduced by approximately EUR 0.2 million because during the 
first quarter, SSH introduced new, IAS-compliant net sales 
registration principles. 
-Operating loss for the period was EUR -2.4 million (EUR -0.1 
million). 
-As a result of its sales and marketing investments, the company 
concluded 26 license and maintenance agreements exceeding EUR 50,000. 
-SSH will continue to increase the efficiency of its operations and to 
cut costs during the current year. 


KEY FIGURES 
		                  Q1/02	    Q1/01     2001
Net sales, EUR million		    4.4	     6.4      19.9
Net sales, growth % 		  -31.3	  +126.5      27.6
Operating result, EUR million	   -2.8	    -0.1      -6.7
   % of net sales		  -64.4	    -1.4     -33.8
Operating result, growth % 	  -29.4   -117.4    -302.4
Profit before extraordinary items
and taxes, EUR million		   -2.4	     0.4      -4.1
   % of net sales		  -56.2	     6.5     -20.8
Personnel, 
period-end 		            187	     179       181
                                                                   
Earnings per share, EUR 	  -0.09	    0.01     -0.15
Equity per share, EUR 		   1.70	    1.97      1.82
                                                                   

NET SALES AND OPERATING RESULT 

The company's net sales for the period totaled EUR 4.4 million (EUR 
6.4 million), representing a year-on-year decrease of -31.3%. Compared 
to the last quarter of 2001, first-quarter net sales dropped by 10% 
from EUR 4.9 million to EUR 4.4 million. 

The development of net sales during the first quarter of 2002 was 
affected by the overall economic situation and the uncertainties in 
the IT market, which continued in SSH's main market areas in the USA 
and in Europe during the first quarter of 2002. This was indicated as 
postponed investment decisions and made the development difficult to 
forecast.

The reported net sales for the period were reduced also by the change 
of net sales registration principles to achieve IAS (International 
Accounting Standard) compliance. The change dropped the company's net 
sales by approximately EUR 0.2 million. The most important change was 
that of the registration practice for the free maintenance related to 
license agreements. In Toolkit products, maintenance is free of charge 
for six months, nearly without exception. According to the new 
registration practice, the value of this free maintenance, which is 
evenly distributed over the entire period of free maintenance, is 
deducted from the fair value of the license agreement. 

Due to the mergers in among SSH's customers, old maintenance fees, 
worth EUR 0.1 million in total, were written down in the period under 
review.

SSH's operating result for the period was EUR -2.8 million 
(EUR -0.1 million) while net result totaled EUR -2.4 million (EUR 0.3 
million).
 
During the period under review, SSH continued to closely monitor its 
costs. The company's fixed expenses remained close to the level of the 
last quarter of 2001, at EUR 6.6 million, whereas a year ago they 
amounted to EUR 5.4 million. 

Research and development expenses for the period totaled EUR 2.1 
million (EUR 2.1 million), while sales and marketing expenses amounted 
to EUR 3.2 million (EUR 2.3 million). Sales and marketing expenses 
increased by 10.3% compared to the last quarter of the previous year 
(EUR 2.9 million). The marketing investments in VPN and PKI products 
substantially affected the growth of sales and marketing costs. 
Investing in sales and marketing complies with the corporate strategy 
and is linked to the company's long-term objectives, which means the 
increased expenses were forecasted for this part. Administrative 
expenses for the period totaled EUR 1.4 million (EUR 1.0 million). The 
administrative expenses for the last quarter of 2001 were EUR 1.5 
million.

During the first quarter, the operating loss resulted also partly from 
some operational development expenses, as well as credit losses, and 
recruitment expenses of sales personnel.

During 2001, the company introduced a number of systematic and planned 
saving measures. Hiring of new employees has been moderate, and a 
development project for the Group's operations and processes was 
launched at the beginning of 2002. 

BALANCE SHEET AND FINANCIAL POSITION

The balance sheet total on March 31, 2002 was EUR 53.1 million, of 
which liquid assets accounted for EUR 41.7 million (EUR 49.7 million), 
i.e. 78.5% of the balance sheet total. The Group has no long-term 
liabilities other than the subordinated loan of EUR 0.2 million 
granted by the National Technology Agency (Tekes).

The ratio of net liabilities to shareholders' equity (gearing) 
remained almost on the same level as in the previous year, standing at 
-87.8% during the first three months of the financial year. The 
company's equity to asset ratio per March 31, 2001, was 92.2% (93.2%). 

Gross capital expenditure for the period totaled EUR 0.1 million, 
comprising mainly investments in machinery and equipment. Financial 
income for the period consisted of interest income. Financial income 
for the report period amounted to EUR 0.4 million, whereas a year ago 
it was EUR 0.5 million.  

A total of EUR 0.2 million in product development funding, and the 
consulting services, was entered in other operating income.

MARKET DEVELOPMENT 

The overall uncertainty in the data security and IT markets continued 
during the first quarter. The buying behavior of equipment 
manufacturers, service providers, and 
end-user companies was cautious and IT investments were being 
considered carefully. No signs were yet visible of the recovery of the 
service provider segment, and a number of equipment manufacturers had 
to report weaker sales development than estimated. 

Service providers form one of the most important clientele for SSH's 
OEM customers. The postponed investment decisions of the service 
providers are reflected in the business operations of SSH's OEM 
customers. For this reason, the sales of IPSec and Secure Shell 
toolkits, targeted for these customers, have not yet shown signs of 
recovery. 

Due to the silence in the OEM market, the role of the end-user market 
in SSH's operations was enhanced during the first quarter. Financial 
institutions in the USA in particular formed an important customer 
group.

During the first quarter, sales were focused on the USA, Germany, 
Japan, and the Nordic countries. The most favorable sales development 
was experienced in Germany. 

During the first quarter of the year, no substantial changes took 
place in the competition or SSH's competitive position. The company 
maintained its position as the world's leading developer of Internet 
Protocol Security (IPSec) and Secure Shell technologies. The IPSec 
technology based IPSec Toolkits and Secure Shell product family, 
maintained their position as SSH's main products. Competition in the 
VPN and PKI markets remained keen.

SALES DEVELOPMENT

During the first quarter, the market situation remained challenging. 
The difficulties in the service provider and equipment manufacturer 
segments were reflected in the development of SSH's sales. Sales of 
the IPSec and Secure Shell toolkits to the OEM manufacturers remained 
at the same level as on the previous year. The sales performance of 
the SSH Secure Shell product which was targeted for end-user companies 
was what was expected. The sales of SSH's VPN hardware were not 
significant.

During the first quarter, 9 new distributor agreements were concluded, 
of which 2 were in the USA, 6 in Europe, and 1 in Asia. 

During the first quarter, SSH concluded 26 sales agreements and 
maintenance agreements worth a total of over EUR 50,000. Of these, 17 
were one-time sales. The share of royalties, related downpayments, and 
maintenance charges amounted to 50% of the consolidated net sales, 
equal to the previous periods. 

During the first quarter, 39.7% of SSH's net sales came from the USA, 
19.3% from Finland, 23.2% from elsewhere in Europe, and 17.8% from 
markets in the rest of the world, e.g. Japan. Compared to the 
situation in the previous quarters, especially the shares of Europe 
and the rest of world have increased, whereas that of USA has 
decreased.

Of the net sales for the period, 42.4% consisted of the sales of IPSec 
Toolkit products, 49.2% of the sales of Secure Shell products, and 
8.4% of the sales of the new products, most of which was formed by the 
VPN client SSH Sentinel. Compared to the last quarter of 2001, the 
share of new products of the net sales increased slightly. During the 
first quarter of 2002, SSH launched a new version of its IPVia Secure 
Network product, one especially targeted for service providers.

During the first quarter of 2002, SSH invested in both sales and 
marketing. The sales investments were also indicated in the hiring of 
more personnel and the geographical expansion of the range of 
operations. 

RESEARCH AND DEVELOPMENT

During the period, research and development expenses totaled 47.6% of 
net sales. Research and development expenses have remained nearly at 
the same level as in the previous year.

A considerable part of the company's investments in research and 
development continues to focus on the development of new products, 
such as SSH Sentinel, and SSH Certifier. 

By the end of March, the company had 3 patents and 34 pending patent 
applications. 

HUMAN RESOURCES 

The period-end number of employees totaled 187, showing a 
year-on-year increase of 8 persons, or 4.5%. 

Of the employees, 50.3% worked in research and development, 36.4% in 
sales and marketing, and 13.3% in administration.

SSH SHARES AND SHAREHOLDING

During the report period, the trading volume of SSH Communications 
Security Corp shares was 1,149,790 (valued at EUR 3,571,601); i.e., 
4.2% of the share capital changed ownership. The highest quotation for 
the period was EUR 3.65 and the lowest EUR 2.46. The weighted average 
price during the report period was EUR 3.0, and the value of a share 
closed at EUR 2.46 on the final trading day for the period (March 27, 
2002). 

No substantial changes took place in the shareholding of SSH 
Communications Security Corp during the first quarter. Applied 
Computing Research (ACR) Oy still holds 61.4% of the company's shares. 

SSH SHARE CAPITAL AND BOARD'S AUTHORIZATION 

SSH's Annual General Meeting of April 11, 2002, authorized the Board 
to decide on increasing share capital through a rights issue and/or 
granting option rights or issuing bonds with warrants or convertible 
bonds to the extent that the resultant share capital may exceed their 
value by a maximum of EUR 120,000.

The AGM approved SSH's new stock-option schemes. On the basis of the 
stock-option scheme I/2002, the company may offer its personnel a 
maximum of, in total, two million stock options. Each stock option 
entitles its holder to the subscription for one SSH Communications 
Security Corp share with a nominal value of 3 cents. Depending on the 
type of warrant, the subscription period will begin in several stages 
on May 1, 2003, May 1, 2004, May 1, 2005, or May 1, 2006, and will end 
on May 1, 2008, for all subscription rights. The share subscription 
price is the closing price of an SSH share, as quoted in continuous 
trading on the Helsinki Exchanges on March 19, 2002 (EUR 2.67), plus 
30 percent, rounded upwards to the nearest ten cents. 

On the basis of the II/2002 stock-option scheme, SSH may offer its 
personnel in the USA a maximum of, in total, 94,000 stock options. 
Each stock option entitles the holder to the subscription for one SSH 
Communications Security Corp share with a nominal value of 3 cents. 
Depending on the type of warrant, the subscription period will begin 
in several stages on May 6, 2002, May 6, 2003, May 6, 2004 or May 6, 
2005, and will end on April 11, 2012, for all option rights. The share 
subscription price is the closing price of an SSH share, as quoted in 
continuous trading on the Helsinki Exchanges on May 6, 2002.    

At the end of the report period on March 31, 2002, SSH's share capital 
was EUR 830,735.55, and it was divided into 27,691,185 shares with a 
nominal value of EUR 0.03. 

EVENTS AFTER THE REPORT PERIOD

SSH has decided to focus on developing software-based data security 
and data management products and discontinue the development of VPN 
hardware. The company will study the possibility to license the VPN 
hardware technology. The potential expenses from the restructuring are 
to be included in the financial result of the second quarter.

Due to the slowing down of the data security and IT markets, SSH has 
to adapt its cost structure to correspond to the current market 
situation. Because of this SSH will today commence a employer/employee 
negotiations. The estimated personnel reduction need is 30-40 persons. 
The personnel reductions concern the entire Group. On March 31, 2002, 
the number of employees was 187.

SSH has published a separate stock exchange release concerning these 
events taken place after the report period.

The purpose of these measures is to improve the company's 
profitability, to improve the cost structure, thus improving 
preconditions for long-term growth. 

SSH continues to invest on its most important R&D targets and to 
develop its sales. 

OUTLOOK

It is still very difficult to forecast the development in the data 
security market. However, the general amount of interest in data 
security products still remains favorable in SSH's main market areas 
in the USA, in Europe, and in Asia. For the time being, it is 
impossible to say when the interest will materialize as tangible 
sales. Long-term prospects for SSH solutions are still favorable.

The company's management further estimates that in 2002, the growth 
percentage of SSH's turnover will, at minimum, reach the level of 
2001. The company believes that the personnel reductions and 
increasing the efficiency of the operations will improve the company's 
profit during the latter half of the year, but it feels that drastic 
investments in the development of sales will, however, keep the 
company's result negative for the financial year of 2002. 


 INCOME STATEMENT	

	                   1-3/2002	 1-3/2001	1-12/2001
EUR million		

Net sales	              4.4	   6.4          19.9
Materials and services	     -0.7	  -1.4	        -4.6
Gross margin	              3.7	   5.0	        15.2
Expenses			
  R&D	                     -2.1	  -2.1	        -8.1
  Sales & marketing	     -3.2	  -2.3	       -10.0
  Administration	     -1.4	  -1.0	        -5.0
Other operating income       +0.2	  +0.3	        +1.2

Operating result	     -2.8	  -0.1	        -6.7
	
Financial income and expenses 0.4	   0.5	         2.6

Profit before extraordinary
Items and taxes              -2.4	   0.4	        -4.1

Profit before taxes	     -2.4	   0.4	        -4.1
Taxes*	                      0.0	  -0.1	         0.0

Net profit for the period    -2.4	   0.3	        -4.1

* Taxes are proportionate to the net profit for the period.

			
BALANCE SHEET	            31 Mar 2002	 31 Mar 2001 31 Dec 2001
		
EUR million
Fixed assets	
  Intangible assets	          1.7	    0.8	        1.7
  Tangible assets	          0.9	    1.9	        1.0
Inventories and current assets			
  Inventories	                  1.5	    0.0	        1.1
  Current assets
     Short-term receivables	  7.3	    7.1	        8.9
     Cash and cash equivalents 	 41.7	   49.7	       44.6
Total assets	                 53.1	   59.5	       57.4

Shareholders' equity	         47.5	   54.6	       50.2
Liabilities	                  5.6	    4.9	        7.2

Total liabilities
and shareholders' equity	 53.1	   59.5	       57.4

 
FINANCIAL INDICATORS	
	                       1-3/2002	    1-3/2001	1-12/2001


Net sales, EUR million	         4.4	      6.4	19.9
Operating result, EUR million	-2.8	     -0.1	-6.7
Operating result,
% of net sales	               -64.4	     -1.4      -33.9
Result before extraordinary
items, appropriations and
taxes, EUR million	        -2.4	     +0.4	-4.1
Result before extraordinary
items, appropriations and
taxes, % of net sales	       -56.2	     +6.5	-20.8
Result before appropriations
and taxes, % of net sales	-2.4	     +0.4	-4.1
Result before appropriations
and taxes, % of net sales	-56.2	     +6.5	-20.8		
Return on investment, %			                 -7.1
Return on equity, %			                 -7.9
Net interest bearing debt,
EUR million	                -41.5	    -49.5	-44.4
Equity-to-assets ratio, %	 92.2	     93.1	 90.1
Net gearing,%	                -87.8	    -91.1	-89.0
Gross capital expenditure, 			
for fixed assets, EUR million	  0.1	      0.2	  1.4
   % of net sales	          2.5	      3.1	  7.0
Investments, EUR million	  0.1	      0.2	  1.6
   % of net sales	          2.5	      3.1	  8.0
R&D expenses, EUR million	  2.1	      2.1	  8.1
   % of net sales	         47.6	     33.0	 40.7
Personnel, on average	          184	      180	  182
Personnel, period-end	          187	      179	  181


PER-SHARE DATA
	                       1-3/2002	    1-3/2001	1-12/2001

Earnings per share, EUR	         -0.09	      0.01	-0.15
Earnings per share, EUR,
considering dilution effect	 -0.09	      0.01	-0.15
Equity per share, EUR	          1.70	      1.97	 1.82
Number of shares,
period-end, 1000 	        27 691	    27 578	27 691
Share performance, EUR
  Average price	                  3.00	      9.82	 7.06
  Lowest	                  2.46	      5.75	 2.20
  Highest	                  3.65	     15.99	15.99
Share price, period-end	          2.46	      7.00	 3.05
Market capitalization, 		
period-end, EUR million 	  68.1	     193.0	 84.5
Volume of shares traded,
million	                           1.1	       3.8	  8.4
Volume of shares traded,
% of total	                   4.2	      13.6	 30.4
Value of shares traded,
EUR million	                   3.6	      37.0	 59.4
Price-earnings ratio(P/E)			        -20.5




CONTINGENT LIABILITIES
	
	                 31 Mar 2002	31 Mar 2001    31 Dec 2001
EUR million
Guarantees given		
  Rental guarantees	     1.2	   1.2	         1.2
  Leasing guarantees	     0.2	   0.1	         0.2

The social security liability from option rights exercised in the 
future would be EUR 70,492 calculated on the closing price of the 
company's share at EUR 2.46.

The figures in this interim report are unaudited.

All last year's figures are not IAS-compliant whereas those for the 
first quarter of 2002 are.  
SHAREHOLDERS

The company's ten largest shareholders, excluding 
nominee-registered shares, were as follows on March 31, 2002:

Applied Computing Research (ACR) Ltd	       61.4 %
Kaukonen Kalle	                                2.5 %
Mutual Pension Insurance Company Varma-Sampo	2.4 %
Ylönen Tatu	                                1.9 %
Nixu Oy	                                        1.9 %
Mutual Pension Insurance Company Ilmarinen	1.7 %
Promotion Capital I Ky	                        1.7 %
Mattila Samuli	                                1.0 %
Kivinen Tero	                                1.0 %
Markula Jussi	                                0.9 %
Total	                                       76.4 %
In administrative registers	                0.2 %


FINANCIAL INFORMATION

A briefing on this interim report for analysts and the media will be 
presented at the auditorium of SSH's headquarters on the 1st floor, 
Fredrikinkatu 42, Helsinki, today on Wednesday, April 24, 2002, at 
11:00 a.m. Entrance is at the corner of Fredrikinkatu and Malminkatu. 

SSH Communications Security Corp will release its next interim report 
and the results for 1 January - 30 June 2002 on July 31, 2002. Further 
information will be available on the company's Web pages in due 
course.

Helsinki, 24 April 2002














SSH COMMUNICATIONS SECURITY CORP
	
Board of Directors


Tatu Ylönen
President and CEO
	

Distribution:
Helsinki Exchanges
Major media

© 2002 SSH Communications Security Corp. All rights reserved. ssh® is a registered trademark of SSH Communications Security Corp in the United States and in certain other jurisdictions. All other names and marks are property of their respective owners.