Gemplus reported a fourth-quarter net loss of 96.7m euros ($103.7m), up from a net loss of 59.8m euros ($64.1m), on revenue of 195.5m euros ($209.7m), down from 250.9m euros ($269.2m) in the year-ago quarter. For the full year to December 31, it reported a net loss of 320.8m euros ($344.2m), up from a net loss of 100.2m euros ($107.5m), on revenue of 787.4m euros ($844.8m), down from 1.02bn euros ($1.09bn) last year.
The Luxembourg-based company, which is in the process of cutting 1,000 positions, or 15% of its 6,500-strong workforce, on top of the 1,149 positions it axed in 2001, has hinted it still needs to further reduce costs. Commenting on the performance in the fourth quarter, CEO Alex Mandl said in a statement: Given the continuing price pressure, they (the results) reflect our need to further reduce costs.
It has been a torrid two years for the company, whose smart cards are used in everything from mobile phones to drivers’ licenses. Financially, it has been badly hit by a fall in demand from the mobile phone industry and rising competition in Asia.
To make matters worse, over the last two years the company has been stricken by internal management disputes. It axed its former leader Antonio Perez in December 2001, and the boardroom struggle also saw the ousting of the company’s chairman Marc Lassus.
The current CEO, Alex Mandl, has been attacked by both unions and French shareholders, who have accused Texas Pacific Group, the company’s biggest shareholder, of bringing in Mandl to break up the group to pass on its technology to the United States. Mandl has also been attacked over the size of his compensation package, and the fact that Mandl served on the board of trustees of a non-profit organization which was sponsored by the US Central Intelligence Agency.
Gemplus was also hit with a 40m euro ($42.8m) back-tax bill in a row over where the company is based, after French tax authorities disputed its claim to have moved its headquarters to Luxembourg in December 1999.
Source: Computerwire
