Atea slows down in Q4 2023 as overall growth continues

As Nordic IT reseller reports declines in quarterly hardware sales, full year still hits highs in revenue and profits

Oslo-based IT service provider Atea has reported a slowdown in its Q4 2023 results compared to previous years, with revenues declining 4.3 per cent to £704.58m.

Hardware revenue saw a significant drop in 2023, decreasing by 8.8 per cent year on year.

The reseller registered a gross sales increase of 3.2 per cent to £1.08bn.

Based on a solid full year performance and a healthy balance sheet, Atea's board will propose a dividend increase to £0.52 per share to the 2024 AGM, up from £0.47 last year.

Software revenue rose by ten per cent and services revenue by seven per cent from last year.

Since Q4 2021, hardware has grown at a compound annual growth rate (CAGR) of 6.5 per cent, while total group revenue has increased at a CAGR of 7.7 per cent.

Gross profit in Q4 2023 increased by 7.1 per cent to £210.21m. Gross margin rose to 29.8 per cent, up from 26.7 per cent last year, due to improved hardware and services margins and a higher proportion of software and services in the revenue mix.

"Atea faced a more challenging hardware market in Q4 2023 compared with last year," said Atea CEO Steinar Sønsteby.

"But at the same time, I am proud to present full year results with record high sales and operating profit, and healthy cash flow.

"Our shareholders can look forward to an increased dividend and more favourable market conditions in 2024."

Operating costs saw a 10.6 per cent growth, or roughly 3.4 per cent in constant currency.

EBIT was £30.34m, down 9.9 per cent from last year.

For the full year 2023, Atea reported gross sales of £3.89bn, revenue (IFRS) of £2.60bn, and EBIT of £932.6m.

Cash flow from operations saw an inflow of £120m in Q4 2023, with a large seasonal reduction in working capital.

During the full year 2023, Atea generated cash flow from operations of £140m.

Atea finished the quarter with a net cash position of £71.98m as defined by its loan covenants, up from £22.79m last year.

Atea was recently named for the third consecutive time on Corporate Knights' Global 100 Index of world's most sustainable companies.