Econocom sales hit by COVID-19 pandemic

French reseller releases preliminary results, which show steep sales decline during COVID-19 crisis

Econocom is expecting to log a steep sales decline for the first six months of this year as the covid-19 crisis affected its business.

The French reseller giant is expecting to hit sales of €1.24bn (£1.12bn) for the first six months of the year, down by 12.5 per cent compared to the first half of 2019.

Despite anticipating a top line decline, Econocom is expecting its profits to surge by 11.7 per cent during the same period to just shy of €43m.

The firm claims that it has accelerated its cost cutting measures during the first six months of this year. The firm originally introduced a cost saving programme in early 2019 and managed to make gross savings of €30m during that year.

In its last financial year, Econocom's profits grew by 10 per cent to €126m.

The cost cutting measures were put in place to stem the bleeding from a dreadful 2018 when profits plummeted by 25.7 per cent to €114.6m.

Econocom also claims that it has successfully removed some of its debt to far this year. Net booked debt fell sharply to around €332m compared with €405m on 30 June 2019.

Despite doing much to recover its bottom line this year, Econocom said that revenues struggled during the first quarter of this year due to the COVID-19 crisis.

Sales dropped by 11.5 per cent in Q1 to €596m, which Econocom directly linked to the pandemic. The firm claims, however, that sales did not see significant declines in Q2.

Econocom's key strategy is to reduce its structural debt by reducing its net financial debt by more than €80m.