Tech Data posts European losses

Distribution giant takes further hit in Europe, although turnover worldwide increases 9.3 per cent

Tech Data’s miserable run in Europe shows no sign of abating as the broadline goliath reported an operating loss of $6.1m in the region for its fiscal first quarter 2008.

The distributor, which works through the Computer 2000 and Azlan brands in the UK, posted a 9.3 per cent rise in total turnover to $5.4bn for the three months to 30 April. Group net profits stood at $9.9m.

However, the distributor’s progress on this side of the Atlantic was hampered by an $8.8m charge related to the closure of its operation in the United Arab Emirates (UAE).

That forced Tech Data to an operating loss equivalent to 0.21 per cent of sales in the region, compared to a loss equivalent to 0.25 per cent of sales a year earlier.

Net turnover in Europe (which also includes the Middle East and export sales to Africa) increased by 12 per cent year-on-year in dollar terms to $2.9bn, or 54 per cent of the total turnover. With currency effects stripped out, revenue growth in the region stood at just 2.1 per cent.

Tech Data also warned it would incur additional costs during its second quarter to complete the closure of its UAE unit and the closure of its European logistics centre.

Robert Dutkowsky, chief executive at Tech Data, said: “Our first quarter progress validates that our strategic initiatives are on the right track.

“We continue to hone our position for long-term success, and while we know we still have work to do, it is clear that our renewed focus on the marketplace and our efforts to optimise our product and customer portfolio mix are beginning to take hold.”

Further reading
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