Logicom more than doubles 2006 profit

Logicom Pcl (LOG) released its preliminary 2006 results posting a strong 113.6% increase in net profit to CYP 3.22 mln or EUR 5.55 mln. EPS was reported at CYP 0.0522 or EUR 0.09 vs. CYP 0.0245 in 2005.

Turnover increased by 23.9% YoY to CYP 145.7m or EUR 251.2 mln on the back of higher volume primarily in Greece and Italy. LOG’s gross profit advanced by 37.5% YoY to CYP 11.0 mln while the gross profit margin improved from 6.8% to 7.6% in 2006, following improvements in general market conditions, and the concentration of LOG’s sales effort on high-margin products and markets, such as Greece.

Operating expenses advanced by 46.7% YoY to CYP 7.5 mln or EUR 12.9 mln amid increased overheads incurred for the commencement of operations in Greece, Italy and Turkey, one-off insurance cover costs, and increased marketing expenses for the promotion of suppliers’ products. An amount of CYP 900.000 related to bad debts provision, for credit allowed to customers before the procurement of appropriate insurance cover with Atradius Credit Insurance N.V.

Net profits were positively affected by lower net finance charges of CYP 199k vs. CYP 1.4 mln in 2005 amid an FX related gain of CYP 1.0 mln or EUR 1.72 mln vs. an FX loss of CYP 0.8 mln or EUR 1.3 mln in 2005. An FX loss of CYP 0.34 mln arising from investment in subsidiary companies, was recognised in equity instead of the P&L.