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NEWSWIRE
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Niscayah sees operating profit slip to SEK 104mln in Q3 |
12.11.2008 
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STOCKHOLM--The Niscayah Group saw is operating profit (EBIT) for Q3 of this year fall to SEK 104mln (approximately EUR 10.4mln), down from SEK 145mln in the same period a year earlier, according to figures released in the company's interim report last week.
Sales were up nine percent during the period to SEK 5.620bn and by 10 percent in Q3 alone, to SEK 1.876bn.
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Impairment losses of goodwill, mainly attributable to the UK operations, impacted net income by SEK 490mln during the period and in the third quarter. Thus, earnings per share amounted to a loss of SEK 1.21, down from a profit of SEK 0.21 in the same period a year earlier.
"We saw sales growth of 10 percent in the third quarter, despite a declining share within the banking customer segment, 24 percent," Niscayah CEO Juan Vallejo said in a statement. The decline in sales to the banking sector is due mainly to implementation projects, according to Vallejo. He said that price pressure, particularly in relation to sales of larger security solutions within implementation projects, had contributed to decreasing margins while at the same time, selling and administrative expenses had been increasing at a higher rate than gross income.
"As part of an increased focus on profitability, all costs are now being reviewed in the Group, particularly as regards that part of the operations covering implementation projects," he said.
At the same time, Vallejo said Niscayah would be increasing its activities to develop its service offering in order to drive profitable growth.
"Service accounted for 39 percent of our total sales during the period," Vallejo said, adding that it was to early to say how the recent financial market turbulence would impact the company in the near term. "We are preparing to encounter a tougher market," he said.
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