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Asbis reports third quarter figures

by Stuart Wilson, Thursday 20 November 2008

Emerging markets distributor Asbis reckons that its ‘solid foundation’ will allow it to ride out the current global financial crisis and emerge even stronger. The confident claim came as Asbis reported third quarter sales for 2008 up 15.1% year-on-year to US$427.3m. Despite the sales growth, third quarter net profits almost halved year-on-year to US$3.2m – an after-tax profit margin of just 0.7%.

Total sales for the first nine months of 2008 were up 21.3% at US$1.13 billion with net profits up 13% at US$10.53m. Gross margin in the first three quarters increased by one percentage point to 5.5% due to an improved product portfolio and increased sales and margins of laptops and software – especially in Russia.

“Geographical diversification together with introduction of new products into our portfolio gave us possibility to reach another growth of results after nine months of 2008. Additionally to our traditional PC components business, notebooks business, which we have introduced a year ago, is booming, as it has grown for more than 169% in the third quarter and 186% in the nine months,” said Siarhei Kostevitch, CEO at Asbis.

“What is more, we still benefit from very healthy margins on Microsoft software in Russia, and our total revenue in this country after nine months of 2008 has grown by 30.6% to US$342m.However, high fluctuations of the Russian Rouble, the Euro and Euro-linked and other currencies against the US Dollar negatively affected our net profit for the third quarter of 2008. For the nine months though net profit is better than in 2007 respective period,” he added.

“Although tough times are ahead of us, we believe that we have a solid foundation to come out of the world’s financial crisis stronger,” continued Kostevitch. “Additionally we have made several investments in Italy, Turkey, UAE, Latvia, Bosnia and Herzegovina and Belarus, which are expected to deliver additional value to the Group and improve our market position next year.”

Asbis third quarter sales in the former Soviet Union countries were up 6% at US$211.8m with Western Europe also performing well year-on-year with revenues up 9.5% at US$37m for the third quarter. Sales in Central and Eastern Europe were up 0.7% to US$123.5m. The star performer was Asbis’ operation in the Middle East and Africa, which saw third quarter sales jumping 41% year-on-year to US$46m.

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