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EDB Q4 operating profit up on 2006

30 January 2008  |  989 views  |  0 Source: EDB Business Partner

EDB Business Partner reports an increase of 38% in cash from operations for the fourth quarter of 2007 to NOK 523 million.

Operating revenue was 6% higher in the fourth quarter of 2007 at NOK 1,685 million, and the group generated an improved EBITA margin of 10.2%.

The group reported operating profit before intangible asset amortisation (EBITA) of NOK 173 million for the fourth quarter of 2007, as compared to NOK 158 million for the same quarter in 2006.

"EDB is well positioned at the start of 2008. With 53% growth in order inflow, EDB has a sound platform to ensure organic growth. EDB's objectives are now to realise the significant potential we see in IS Partner, make good use of the delivery capacity we have established in India and the Ukraine, and focus on continuing organic growth in the Nordic region", comments Endre Rangnes, CEO of EDB Business Partner.

Highlights of the fourth quarter of 2007
  • Improvement in consolidated EBITA margin; up from 10.0% for the fourth quarter of 2006 to 10.2% for the fourth quarter of 2007.
  • Strong cash from operations; NOK 523 million - an increase of 38% from the same quarter of 2006.
  • EDB signed new contracts in the fourth quarter of 2007 representing total contract value of NOK 1,300 million, an increase of 53%. EDB's total order backlog, including IS Partner, is NOK 14.6 billion.
  • The Application Services business area enjoyed its best quarter ever; EBITA up by 41% to NOK 55 million.
  • EDB has taken over and consolidated the businesses acquired of Span Infotech in India, Miratech in the Ukraine and the Danish SAP consulting firm TeamR3.


Main figures for the fourth quarter of 2007
  • Operating revenue was NOK 1,685 million as compared to NOK 1,588 million in the same quarter of 2006, an increase of 6%.
  • Operating profit before intangible asset amortisation (EBITA) was NOK 173 million in the fourth quarter of 2007, as compared to NOK 158 million for the same quarter of 2006.
  • Profit before tax was NOK 114 million, as compared to NOK 130 million for the same quarter of 2006.
  • Cash from operations before restructuring payments was NOK 523 million in the fourth quarter of 2007 as compared to NOK 378 million for the same quarter of 2006.
  • Operational investment (Capex) was NOK 2 million lower than in the fourth quarter of 2006.
  • Earnings per share for the fourth quarter of 2007 was NOK 0.85. Earnings per share for the fourth quarter of 2006 was NOK 1.52, or NOK 0.98 after adjusting for non-recurring items.


Main figures for 2007
  • Operating revenue was NOK 6,354 million as compared to NOK 5,882 million in 2006.
  • Operating profit before intangible asset amortisation (EBITA) was NOK 607 million in 2007, as compared to NOK 541 million in 2006.
  • Profit before tax increased to NOK 424 million from NOK 257 million in 2006.
  • Cash from operations before restructuring payments was NOK 807 million in 2007, as compared to NOK 709 million in 2006.
  • Operational investment (Capex) was NOK 32 million lower in 2007 at NOK 260 million.
  • Earnings per share increased to NOK 3.26 in 2007 from NOK 2.47 in 2006.


Growth outside Norway
EDB is experiencing strong interest in the group's solutions and services from the Nordic market, and in the fourth quarter of 2007 revenue generated outside Norway accounted for 34% of consolidated revenue. For 2007 as a whole, 31% of revenue came from outside Norway.

The acquisition of IS Partner strengthens EDB's global delivery capacity. IS Partner has many years' experience from following major Nordic groups in their global businesses, and EDB will benefit from this capacity for deliveries to its customers.

Over the course of 2007, EDB established sizeable offshore/nearshore capacity, with 1,200 employees in the Ukraine and India, and the company intends to scale up this capacity during 2008 in order to reduce its Nordic cost level.

Business areas
IT Operations: The business area reports revenue of NOK 992 million as compared to NOK 1,004 million for the same quarter of 2006. EBITA was NOK 82 million as compared to NOK 92 million for the fourth quarter of 2006. The phasing-out of the Apoteket contract caused somewhat lower revenue in the fourth quarter.

Solutions: The business area reports revenue of NOK 373 million, with growth of 17% for the quarter. EBITA was NOK 54 million as compared to NOK 45 million for the fourth quarter of 2006.

Application Services: The business area reports revenue of NOK 380 million for the fourth quarter of 2007 as compared to NOK 300 million for the fourth quarter of 2006. Revenue grew by 27% and includes the acquisitions of TeamR3 from 1 October, Span Systems from 1 November and Miratech from 1 December. EBITA was NOK 55 million as compared to NOK 39 million in the same quarter of 2006.

Future prospects
The Nordic IT services market grew by around 5% in 2007 according to figures from the research company IDC. Growth in demand was particularly strong for industry-specific solutions and consulting services. The research company expects that the Nordic market will continue to grow by around 5% in 2008.

The Nordic IT services market is estimated to be worth some NOK 120 billion annually, and remains a fragmented market. EDB's go-to-market model paves the way for selective expansion with continuing focus on profitable growth and building shareholder value.

Dividend
In accordance with the company's dividend policy, the board of directors has resolved to recommend that the Annual General Meeting should approve a dividend of NOK 1.20 per share, equivalent to NOK 108 million. This represents an increase of 9% from 2006.

Read the full report here:» Download the document now 65.6 kb (PDF File)

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