Logicom profits leap

Logicom has posted solid financial figures for the six months ending June 2006. Logicom’s first half sales climbed 55% to US$172.9m with after tax profits soaring 85% year-on-year to US$4.72m despite the distributor's problems collecting outstanding debts of more than US$6.1m from the three resellers at the centre of the Dubai credit crisis.

  • E-Mail
By  Stuart Wilson Published  August 31, 2006

Logicom has posted solid financial figures for the six months ending June 2006. Logicom’s first half sales climbed 55% to US$172.9m with after tax profits soaring 85% year-on-year to US$4.72m despite the distributor's problems collecting outstanding debts of more than US$6.1m from the three resellers at the centre of the Dubai credit crisis. Regional distributor Logicom, which is quoted on the Cyprus Stock exchange, recorded a gross margin of 7.7% in the first half of 2006 — up from 7.4% a year earlier. After tax profit margins climbed slightly from 2.45% in the first half of 2005 to 2.73% in the first half of 2006. Logicom’s reduction in net finance costs helped contribute to its strong bottom line in the first half of 2006. The company incurred a net finance cost of just under US$140,000 in the first half of 2006, a figure that compared favourably to a net finance cost of more than US$761,000 a year earlier. Logicom has also updated investors on its efforts to recover outstanding debts from Fortex-MID, Micron and MST — the three resellers that triggered the credit crisis in the Dubai channel earlier this year. In a recent announcement on the Cyprus Stock Exchange, Logicom stated: “The Company has proceeded to the settlement of the collection of one of the debts of US$3.07m. The settlement includes parallel guarantees and an agreement for the full payment of the debts within the period of three years with periodical payments. The first has already been submitted. With reference to the two other debts of US$3.03m, the Company continues to take all the necessary measures.” Regional distributor Empa has already announced that it has received a partial payment of outstanding debts from Fortex-MID. Mehdi Asghari, the owner of Fortex-MID, has confirmed that his company has now agreed on a payment plan for its outstanding debt with Logicom. Asghari is the only one of the three major resellers involved in the credit crisis that has so far agreed settlements with some of the authorised distributors hit by the credit crisis. Speaking to Channel Middle East at the start of May from Iran, Asghari declared: “I want to give everyone in the market comfort and confidence in the fact that everyone will be paid back to the last penny and not less. I have enough assets and enough collateral; and I will be answerable to every single person that I have a commitment to.” It appears that Asghari is now delivering on that promise. In contrast, authorised distributors are still struggling to recoup the outstanding debts of both Micron and MST. Like Logicom, Empa has been in regular communication with Asghari at Fortex-MID. Empa has also had intermittent contact with Micron’s boss but has so far been unable to track down the company owner of MST according to Savas Yucedag, VP at Empa.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code