STOCKHOLM, Sweden, April 25, 2002 (PRIMEZONE) -- Sigma:
STABLE - BUT AT A LOW LEVEL
- Loss before goodwill amortization (EBITA) amounted to SEK 4.9 M (profit: 24.4). - Positive trend within Network & Wireless Solutions business area; result improvement compared with preceding year, loss of SEK 1.9 M (loss: 5.0 M). - Loss after financial items amounted to SEK 16.7 M (profit: 5.9). - Reduction in operations in Stockholm and Ostergotland. - The Board of Directors forecast for the full year of earnings after net financial items being positive, remain valid.
Comments on market development
The market at the beginning of 2002 is characterized by restraint in new investments in the IT sector. No significant change has occurred since autumn 2001. The market is relatively stable but at a low level. At the same time, although there are many inquiries in the market, the lead- time from bid to completion takes considerably longer compared with prior years.
For Sigma, the first quarter is always weaker than the fourth quarter of the preceding year. This is due in part to hardware sales and operations that focus on municipalities and county councils being cyclical during the year, and also to many long-term assignments terminating at year- end. There are major regional differences. In many larger communities there are numerous assignments, both older, ongoing assignments as well as new ones. In Stockholm and smaller communities demand is weaker. In general, the trend in capacity utilization has been positive during the spring, with the number of idle consultants having been successively reduced.
Further adaptation of operations
In some locations, both in and outside Sweden, there is weaker demand for consultant services. Accordingly, Sigma is continuing to adapt the organization and to reduce the number of employees by an additional 45 persons in Stockholm and Ostergotland. As previously, costs are reporting against operating profit, and during the first quarter amount to SEK 2.2 M. There is considerable cost restraint, with corporate management's salaries remaining wholly unchanged compared with the preceding year.
Sales and earnings, January - March
Net sales during the first quarter amounted to SEK 316.1 M (375.4), down 16% from the preceding year. Result before goodwill amortization (EBITA) amounted to a loss of SEK 4.9 M (profit: 24.4) during the period corresponding to a decline in margin on sales of 8%. The first quarter of 2002 has 1.5 fewer working days compared with 2001, which has an adverse effect on sales and earnings compared with the preceding year amounting to more than SEK 6 M. This corresponds to a decline in margin on sales of 2%. Accordingly the decline in earnings is considerably less than the sales decrease as a result of substantial cost savings. During the first quarter of 2001, demand for consultant services was quite strong, with a decline first appearing during the second and third quarters of 2001. The Group's dependence on the Telecom segment has declined considerably and is now 15% of sales (24%)
Following a nonrecurring write-down of goodwill in 2001, goodwill amortization are lower compared with the preceding year, and the result after financial items amounted to a loss of SEK 16.7 M (profit: 5.9). Included in 2001 net profit are expense items affecting comparability of SEK 2.1 M. Operating earnings are also charged with direct depreciation of certain computer equipment amounting to SEK 2.3 M, in accordance with Sigma's accounting principles.
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