Distribution giant Tech Data has blamed restructuring costs for its $59.4m second quarter loss.
For the period ended 31 July, Tech Data, parent company of Computer 2000 and Azlan in the UK, reported a lower than expected gross margin in the EMEA region, which fell 0.9 per cent to $2.5bn.
Earlier this month the distributor was forced to almost halve its expected earnings for the quarter after noting “challenges in Europe” (CRN 3 August).
Steven Raymund, chief executive of Tech Data, admitted that the restructuring had impacted its Q2 results, but remained confident that it had made the right decision.
"Although the challenges within our EMEA operation have impacted our overall financial results, we are confident that our restructuring programme will deliver cost savings, efficiencies and operational improvements," he said.
Tech Data's second quarter turnover increased by 5.5 per cent to $4.83bn.
Tech Data also said the restructuring cost it $19.3m during Q2, which comprised of $10.6m in staff reductions and $8.7m in 'facility consolidation' and the write-off of fixed assets.
The total cost of the restructure is expected to total between $40 and $50m, but the distributor claimed it would eventually result in annual savings of roughly the same amount.
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