April 28, 2020 / 6:13 AM / a month ago

UPDATE 1-Nordic IT services firm TietoEVRY Q1 profit rises on infrastructure boost

(Adds quotes, details on results, forecasts)

HELSINKI, April 28 (Reuters) - Nordic IT services provider TietoEVRY on Tuesday posted a stronger first-quarter profit, underpinned by solid performances in its cloud and infrastructure businesses, and said it sees higher-than-expected synergies this year.

The company, which finalised the takeover of Norwegian EVRY’s businesses last December, said its adjusted operating profit during January-March came in at 78.2 million euros ($84.6 million) from pro forma 74.7 million euros last year.

“Profitability improvement was supported by continued attention on the company’s cost structure and strong volume development in the cloud and infrastructure business,” Chief Executive Kimmo Alkio said in a statement.

The Finland-headquartered company said the merger would help it achieve year-end synergies of 45 million-55 million euros, compared with earlier estimates of 30 million-40 million euros.

TietoEVRY withdrew its 2020 outlook last month and also scrapped April dividend payment in response to the coronavirus pandemic.

“Current market indicators imply a negative 2-5% full-year revenue impact due to the Covid-19 pandemic on TietoEVRY, depending on the IT market development,” the company said, adding that sensitivity to macro-economy varies by business units, with many of its businesses in infrastructure and application services based on multi-year agreements.

“The digital consulting business has shorter contractual periods and is likely to be more affected during times of economic uncertainty,” it said.

$1=0.9243 euros Reporting by Tarmo Virki and Anne Kauranen; Editing by Clarence Fernandez and Sherry Jacob-Phillips

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