Logicom profit surge 29.4% in 1H08

Logicom Public Ltd (LOG) reported a 29.4% Year-on-Year increase in first half profitability to EUR5.0 mln on the back of sharply higher sales and a favourable swing in exchange rates. EPS was recorded at EUR 0.0676.
Group revenue increased 26.2% to EUR196.3 mln driven both by sales in Cyprus and abroad (U.A.E., Saudi Arabia, Turkey, Greece and New Europe countries). Local sales increased 14.2% to EUR27.8 mln while sales abroad increased 28.4% to EUR168.5 mln.
Gross profit margin deteriorated from 7.4% to 7.3% in 1H08, primarily due to higher sales volumes in lower yielding markets. EBIT margins have been affected by increased administrative costs due to the Company’s expansion at the current and new markets such as Saudi Arabia, Hungary, Romania and Bulgaria.
Bottom line profitability was positively impacted by higher FX related gains (+EUR 1.3 mln), whilst it was negatively affected by a higher tax charge of EUR 787k vs. a tax charge of EUR 299k in 1H07.
Management expects that 9M 2008 results will also be improved compared to the corresponding period in 2007.
In another development, Management noted that LOG has been participating via partnerships in competitions regarding construction and management of water desalination units. The procedure of allocating the successful offers is pending. In addition, LOG has been chosen among others to participate in the competitive debate for the submission of offers for the development, installation and support of a complete solution for the information technology system of the National Health Insurance Organization. Finally LOG has submitted an offer to the Ministry of Education for distribution, installation and development of a complete solution of an electronic system for administrating schools. According to Management, a potential success of the Company in any of the aforementioned competitions will diversify LOG’s operations and contribute to profitability in the medium-term.