IT services vendor WM-data has said that demand for new IT services projects is increasing in its native Nordic market, although increased competition is putting pressure on profit margins.
The Stockholm, Sweden-based vendor has announced results for its second quarter, when it grew net profit 35% to SEK 42m ($5.6m) on revenue that grew 27.7% to SEK 2.12bn ($281m) in the three months to June 30, 2004.
The company said in a statement that it saw a rise in demand in Sweden and Finland, but added: Growth in business volume is offset by continued fierce competition for market share, which has resulted in continued price pressure and restraining effect on the profitability trend.
WM-data said that there was a growing interest in IT outsourcing in the Nordic region, and also in business process outsourcing. It also reported demand in the government sector for projects to provide citizens with digital access to public services.
Sweden accounted for the bulk of the company’s revenue with sales from the country growing 2.5% to SEK 1.04bn ($138m), although pre-tax profit fell 24% to SEK 26m ($3.4m). The biggest improvement came from WM-data’s Finnish operation, where sales grew 259% to SEK 610m ($80.9m), and pre-tax profit rose 174% to SEK 73m ($9.7m).
WM-data breaks its operations down into three operating units. Industry solutions reported a 47% increase in revenue to SEK 1.33bn ($176m) in the second quarter, with pre-tax profit growing 69% to SEK 54m ($7.2m).
Sales from the infrastructure solutions division increased 6.3% to SEK 675m ($89.5m) with pre-tax profit growing 73% to SEK 45m ($6m). The Caran product development division grew revenue 8.1% to SEK 200m ($26.5m), and made a pre-tax profit of SEK 3m ($398,000) compared to a loss of SEK 1m ($133,000) in the year-ago quarter.
The company’s headcount grew 28% to 7,810 in the year to June 30, 2004, which was boosted by the acquisition of Swedish company Validation which added 150 staff.