IT service provider EDB ErgoGroup (OSE: EDBASA) fell 3,5% yesterday after releasing quarterly results. Today it traded unchanged and CEO Terje Mjøs purchased 50 290 shares at an average share price of NOK 12,59. The quarterly results were very close to expectations. Operating revenue was around 3.2 billion NOK and EBITA 166 million.
EDB Ergogroup is a product of a merger between two large Norwegian IT companies EDB Business Partner and ErgoGroup, which took place last October. The company is still working hard to realize synergy benefits from the merger, and says it has identified annual synergy gains of 325 million NOK, which are starting to take effect and should be fully realized in around a year.
EDB ErgoGroup expects to see market growth in its main IT services markets of Norway and Sweden, particularly in the public sector, banking and finance, and SME segments and in also consulting. Contractually agreed price reductions and lack of new orders will hamper revenue generated in Norway. The company thus expects modest growth in revenue in H2 and The EBITA forecast for 2011 is now 760 to 800 million (800).
EDB ErgoGroup also communicated its renewed strategy for global sourcing that involves continuous using of expertise from two time zones, namely from India and Ukraine. The company has already started the process to establish a focused ownership structure in the companies that it has in those countries.
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