The ebita (operating profit adjusted for non-recurring items before intangible amortization) result of IT company Tietoevry has slightly exceeded expectations. Furthermore, the company has decided to pay a higher amount of dividends than initially predicted.
In the final quarter of the year, the ebita of IT company Infoevryn was reported to be 108 million euros. This figure was slightly higher than the 107 million euros that analysts had estimated for the fourth quarter. However, it is lower than the 118 million euros that was reported for the same period in the previous year.
According to a consensus forecast collated by Tietopalvelu Vara Research, which included estimates from 13 different analysts, forecasts for the company’s ebita ranged from 99 million euros to 117 million euros.
The reported turnover for the company fell slightly short of expectations, coming in at 752 million euros. This is lower than the estimated turnover of 760 million euros for the final quarter of the year, and also lower than the 768 million euros reported in the same period the previous year. The forecasted range for the company’s turnover was quite broad, ranging from 631 million euros to 850 million euros.
CEO Kimmo Alkio made a statement in the announcement. He mentioned that the company has been increasingly utilizing artificial intelligence and has been successful in identifying new business opportunities. He expressed that while the company started the year 2023 strong with good levels of demand and growth, macroeconomic uncertainties and a decrease in demand as the year progressed led to a slowdown in growth.
Despite the continued high inflation, the company was able to achieve a good result and maintain a level of profitability that was in line with their estimate. As the economic development continues to be positive, the company has confirmed that it will continue to increase dividends.
The company has also announced that it will pay more dividends than expected, pending approval from the general meeting on the board’s proposal. The board has proposed a dividend of 1.47 euros per share for the 2023 financial year, which is higher than the expected proposal of 1.44 euros per share and the 1.45 euros per share paid the previous year. Forecasts for the dividend had a significant range, with the highest at 1.55 euros and the lowest at 1.08 euros.
Tietoevry has provided guidance for an organic revenue growth of 0–3 percent for the current year, aligning with analysts’ expectations. The consensus had expected a turnover of 2,949 million euros in the current year before the results announcement. The adjusted operating profit is expected to be 12–13 percent, with analysts estimating that the company will reach an adjusted ebita margin of 12.7 percent.
The company has announced that it began a strategic evaluation of the Banking business in 2022. The business could potentially be separated into its own company. The company believes that if the businesses were separated, the market would value them higher than they are currently, which would be beneficial for the owners. The company expects to complete the assessment at the beginning of the year.
Towards the end of the year, the company announced that it was considering merging the Transform and Connect units. The company plans to announce the progress of the strategic evaluation separately. The preliminary planned date for the division is June 30, 2024.
CEO Kimmo Alkio expressed that one of the significant achievements of the past year was the progress made in the strategic evaluations of the Tietoevry Banking and Tech Services businesses. The company has taken the next step in the evaluation of Tietoevry Banking, and announced its goal to separate it into a separate company, which could potentially be listed on the stock exchange.
The strategic evaluation of the Tietoevry Tech Services business is ongoing, with the company actively in contact with potential buyers. The company plans to continue implementing its strategy based on specialization, and aims to position Tietoevry as a company that offers software solutions and data-oriented consulting services.
Correction 09:34: The headline previously wrongly stated that the result would have fallen short of expectations. The dividend was paid for the fiscal year 2022 at 1.45 euros per share, not 1.44 euros.
