Norwegian IT hardware and services vendor Ementor ASA has reported heavy third quarter losses on the back of major restructuring charges.
In the three months to the end of September, Ementor made a net loss of NOK 218.8m ($32.4m), compared to a loss of NOK 28.3m ($4.2m) in the same period of the previous year. The company’s restructuring costs totaled NOK 230m ($34.1m) and related to the recent mergers between Ementor, Danish product reseller Topnordic AS, and Swedish computer equipment reseller Atea Holding AB.
The charges include NOK 118m ($17.5m) of provisions, largely related to staff cuts and property relocation, aimed at generating NOK 150m ($22.2m) in annual cost savings. The remaining NOK 112m ($16.6m) covers the write-down of assets, including IT systems, in an effort to reduce annual depreciation by NOK 20m ($3m).
The mergers with Topnordic and Atea boosted Ementor’s quarterly revenue to NOK 2bn ($293.8m) from NOK 623.4m ($92.5m) in the same period of the previous year. However, pro forma sales fell 2.7% to NOK 2.4bn ($358.4m), largely due to higher inter-company sales.
By merging with Topnordic and Atea, Ementor has attempted to reposition itself as primarily a product reseller. In the three months to September, product sales rose 15.4% on a pro forma basis to NOK 2.6bn ($384.9m), while consulting and services revenue also rose to NOK 395.5m ($58.7m) from NOK 355.4m ($52.7m) in the third quarter of 2005.