Profits tumble at Ingram Micro

Distribution gaint hit hard by woes in Germany and Brazil in its latest financials

Ingram Micro’s first quarter profits were hammered by one-off costs in Germany and Brazil, the broadliner admitted in its quarterly report out today.

The US-based distribution giant saw net profit tumble 40 per cent year-on-year to £37m for the three months ended 31 March, despite posting a nine per cent rise in turnover to $8.25bn.

Chief executive Greg Spierkel pointed to a “solid” technology climate across all geographies, but conceded that its push to regain market share in Germany and a one-off Brazilian tax charge had “dampened income”.

In Brazil, Ingram absorbed a $33.8m first quarter charge relating to commercial taxes on software imports.

In Germany, the distributor said it was hit by additional operating expenses relating to its efforts to win back market share following the transition to an upgraded warehouse management system.

European operating income was roughly flat at $35m, although operating margin fell from 1.28 per cent to 1.15 per cent year-on-year.

European turnover stood at $3.05bn, or 37 per cent of the total. Although that figure is up 13 per cent annually in dollar terms, the growth rate falls to just three per cent allowing for the strength of European currencies.

William Humes, executive vice president at Ingram, said in a statement: “There were bright spots in every region. Nearly every country in Europe generated year-over-year growth.

“In Germany, the operational complications with the upgraded warehouse management system are largely behind us, and we’re concentrating on recapturing sales.”