Logicom lifts profit to €32m despite lower sales and higher costs

Logicom Public Ltd reported a significant increase in profit attributable to shareholders for the first nine months of 2025, rising by 25.8 per cent to €32,069,630 compared with €25,497,710 a year earlier, according to the company’s results statement.

The improvement was mainly driven by higher other income from the controlled company Demetra Holdings Plc, a sharp reduction in expected credit losses, lower net financing costs, and the write-off of negative goodwill following the company’s increased investment in Demetra.

However, the increase in profit came despite a decline in turnover and gross profit, as well as higher administrative expenses and taxation when compared with the first nine months of 2024.

Gross sales decreased by 5.1 per cent to €899.3m from €947.7m. Sales in the distribution division fell by 3.6 per cent, reflecting lower volumes in Saudi Arabia, Qatar, Kuwait, Italy and Romania.

The software and integrated IT solutions division recorded a more pronounced drop of 23.3 per cent, mainly due to weaker sales in Cyprus and Greece.

Group sales, which include revenues from contracts where the group acts as principal plus gross profit from agency transactions, decreased by 8.6 per cent to €768.1m from €840.7m in the same period last year.

Even so, the gross profit margin on these sales remained stable at 8.5 per cent.

Other income rose sharply to €10,299,288 from €1,007,712, mainly due to income from Demetra Holdings Plc, including interest, rent, dividends and profits from financial assets amounting to €9,074,386.

Additional contributions from suppliers and collaboration agreements with third parties also supported the increase.

Expected credit losses dropped to €244,763 from €1,883,293, largely because the nine-month period of 2024 had included an additional impairment of €1,652,332 recognised by subsidiary Verendrya Ventures Limited on a loan to the jointly controlled company M.N. Larnaca Desalination Co. Ltd, following a reassessment of discounted cash flows under an arbitration decision.

Administrative expenses increased by 8.1 per cent to €45,953,776, reflecting higher personnel and infrastructure costs linked to expansion plans, as well as the consolidation of operating expenses from Demetra Holdings Plc amounting to €1,483,295.

Profit from operating activities generated from ordinary operations, excluding the results of Demetra, fell by 20.8 per cent, mainly due to lower turnover, reduced gross profit and higher administrative costs. In contrast, total operating profit including Demetra increased by 6.3 per cent to €29,686,024 compared with €27,932,051 last year, supported by the rise in other income.

The group also recorded a foreign exchange gain of €2,290,348, compared with €81,325 in 2024, mainly due to the strengthening of the US dollar against the euro.

In terms of contributions from associates, Logicom reported €12,672,514 in profit from Demetra Holdings Plc for the nine-month period.

The group increased its participation in Demetra’s share capital on January 17 and April 7, 2025 to 38.49 per cent and 38.5 per cent respectively.

The resulting negative goodwill of €16,278,001, arising from the excess of fair value of Demetra’s net assets over the carrying amount of the investment, was eliminated from the consolidated statement of profit and loss.

Regarding the outlook, the company noted that profitability from ordinary activities improved compared with last year, supported by higher other income, lower expected credit losses, reduced net financing costs and favourable exchange rate movements.

This came despite lower turnover and gross profit, rising administrative expenses and a significant increase in taxation.

Management added that it is closely monitoring market conditions with the aim of safeguarding the group’s strong financial position while pursuing further growth both in existing and new markets throughout 2025.