Restructuring costs pushed IT services provider EDB Business Partner ASA into the red in the third quarter of 2006.
Oslo, Norway-based EDB took a one-off charge of NOK 144m ($21.3m) related to a range of cost-cutting measures announced earlier this year. These include plans to cut 240 jobs, relocate mainframe operations and rent out surplus premises. In total, EDB expects the restructuring to produce annual cost savings in excess of NOK 100m ($14.8m).
For the three months ended September 30, EDB made a net loss of NOK 46m ($6.8m), compared to a profit of NOK 56m ($8.3m) in the same period of the previous year, on sales that grew 17.8% to NOK 1.4bn ($202.2m). After stripping out the restructuring costs, EDB’s operating profit before amortization remained flat at NOK 122m ($18m).
The majority of EDB’s revenue growth came from its newly created Application Services business unit, made up of the Avenir and Spring Consulting divisions that EDB acquired from Ementor in January, along with the company’s other recent acquisitions: Software Technology Integration, Guide Konsult, and DropIT. The segment generated quarterly sales of NOK 202m ($29.8m), with organic growth largely the result of an increasing utilization rate for consultants.
EDB said the Nordic IT services market is continuing to develop positively, although it said the outsourcing market had been flat over the first three quarters of the year.