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Merkantildata ASA expects decline in earnings for Eterra/Ementor.

NORDIC BUSINESS REPORT-13 June 2003-Merkantildata ASA expects decline in earnings for Eterra/Ementor(C)1994-2003 M2 COMMUNICATIONS LTD http://www.m2.com

Norwegian IT group Merkantildata ASA said on Friday (13 June) that it would not realise the expected earnings improvement for its merging divisions Eterra and Ementor in the second quarter.

Merkantildata said earlier that it expected Eterra and Ementor to improve their combined EBITA from a loss of NOK4.9m in the first quarter, but is now expecting a further weakening of NOK15-20m.

"The main reason is that revenues will not increase as expected, but rather decrease slightly. The downward revision mainly relates to revenue reduction in Eterra Denmark and weaker license sale in Ementor Norway," Merkantildata said.

Merkantildata also said that the ongoing merger of Eterra and Ementor was proving to create larger than expected personnel efficiency improvements and that it would, as a result, reduce the workforce.

"The earlier announced annual cost reduction of NOK100m as a consequence of the Eterra/Ementor merger is estimated to increase to NOK120m as of Q4 2003," Merkantildata said.

One Norwegian krone (NOK) is worth approximately 0.09 British pounds (GBP).

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Publication:Nordic Business Report
Article Type:Brief Article
Geographic Code:4EXNO
Date:Jun 13, 2003
Words:203
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