For the three months ended March 31, Paris-based GFI reported a 23% decline in earnings before interest, tax and amortization to 6.8m euros ($8.22m), on revenue that fell 4% to 130.3m euros ($157.7m). The company did not provide net figures for the quarter.
Profit was affected by its Italian subsidiary, which it said took an unexpected turn for the worse in the first quarter as a result of cancelled projects in the public sector and a severely affected performance in Turin and southern Italy. GFI said it is now restructuring the operation to return to profitability by the end of 2004. Germany also remains depressed although it said the operation would break even by the end of the year.
Despite this, GFI said it is experiencing strong demand in Spain and Portugal where it has built up relationships with Telefonica and Vodafone. France, where GFI makes 64% of its revenue, performed well, according to the company, with growth in the company’s order book as well as an upturn in SAP services deals.
GFI remains optimistic however about growth prospects during 2004, and said pricing pressure has now been offset by productivity increases. As a result, the company expects organic growth of between 2% and 4% in the full year, with total revenue for the group expected to grow to between 510m euros ($617.1m) and 520m euros ($629.2m).
