In This Article:
Release Date: August 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Itera ASA (STU:IRI) reported a significant win with an estimated value of NOK60 million to build the digital core for a major innovation industry company.
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The company was recognized with the International Flagship Award by the Ukrainian government for its efforts in Ukraine, highlighting its strong international presence and commitment.
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Itera ASA (STU:IRI) has successfully implemented a business optimization program, resulting in a 1.2 percentage point margin improvement.
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The company maintains a strong cash flow, with NOK27 million generated in the quarter and NOK73 million over the last 12 months, supporting its ability to pay dividends.
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Itera ASA (STU:IRI) has a robust recurring revenue base, which grew by about 4% in the second quarter, indicating stability in its revenue streams.
Negative Points
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Itera ASA (STU:IRI) experienced flat organic growth in the second quarter, indicating challenges in expanding its business.
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The order intake for the quarter was 0.7, reflecting a decrease compared to the last 12 months' book-to-bill ratio of 1.0.
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The company's gross profit decreased by 2% in the second quarter, partly due to increased third-party revenues and associated costs.
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Itera ASA (STU:IRI) reduced its workforce by 4%, or 28 people, which may impact its capacity to scale operations quickly.
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The company's share price has decreased by 18% over the past four months, reflecting market challenges and investor concerns.
Q & A Highlights
Q: Can you provide an overview of Itera's financial performance for the second quarter? A: Arne Mjos, CEO, highlighted that Itera experienced flat organic growth in the second quarter, with an EBIT margin of 9.4%. The company reported a significant win valued at NOK60 million and noted improvements in market conditions. The cash flow for the quarter was NOK27 million, with a strong focus on maintaining dividend payments.
Q: How is Itera addressing the current market trends and demands? A: Mjos emphasized the strong demand for digital technology, particularly in areas like cloud migration, data security, and AI. Itera is focusing on building digital cores for clients and has secured new strategic agreements in financial services and cloud solutions.
Q: What are Itera's strategic initiatives in Ukraine? A: Itera has been recognized for its efforts in Ukraine, receiving an International Flagship Award. The company is providing high-end services to international clients entering Ukraine and is involved in rebuilding efforts, particularly in energy and housing sectors.