Tuesday, September 22, 2020
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Tietoevry’s result was weighed down by unusually high costs from mergers – Stock Exchange News


Information technology company Tietoevry increased its revenue in the second quarter, but the result plunged into a loss driven by large non-recurring items.

Excluding non-recurring items, Tietoevry’s result exceeded analysts’ expectations.

The merger of Finnish Tieto and Norwegian Evry was completed during October – December.

– We have made rapid progress in integration and are raising our synergy target from the previous EUR 75 million to EUR 100 million. We estimate that we will have a synergy rate of EUR 70-80 million by the end of 2020, Tietoevry’s CEO Kimmo Alkio says in the interim report.

The result for the second quarter was weighed down by non-recurring expenses of more than EUR 90 million related to the merger, which the company describes as unusually high. Tietoevry expects non-recurring items to return to lower levels again next year.

Adjusted operating profit reached EUR 80.4 million after EUR 34.0 million a year ago.

The result was better than expected, as analysts had estimated the result compiled by Infront Data at EUR 58 million.

Tietoevry’s profit before taxes in April – June was a loss of EUR 16.2 million, compared to a profit of EUR 19.1 million at the same time last year.

Net sales amounted to EUR 686 million after EUR 403 million a year ago and instead of the expected EUR 672 million. The strong growth in net sales is explained by the merger of Tieto and Evry.

The operating result fell to EUR -9.8 million from EUR 18.1 million.

Earnings per share decreased to EUR -0.12 from EUR 0.24.

Tietoevry withdrew its earnings guidance in March due to the interest rate pandemic. The company says it will issue new guidelines when the visibility to market developments in the second half of the year improves and significant uncertainty disappears.

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