" Revenues increase by 37% and EBIDTA almost trebles
" Revenues in 2006 were ISK 8,646 million, an increase of almost ISK 2,353 million from the previous year
" Profits for the year were ISK 305.6 million, up from ISK 76.5 million a year earlier
" EBITDA was ISK 682.5 million compared with ISK 232.7 million the year before
" AppliCon opens new subsidiaries in Sweden and Great Britain
" Tölvusmidjan ehf. in East Iceland acquired
" The board recommends a 45% dividend
At a board meeting of Nýherji hf. today, 19 January, the directors approved the company's audited annual accounts for the year 2006.
Good results
Nýherji's revenue in 2006 amounted to ISK 8,646 million compared with ISK 6,293 the previous year, an increase in income of 37.4% between years. Nýherji's profits after tax were ISK 305.6 million for the year 2006, compared with ISK 76.5 the year before. EBITDA for Nýherji and its subsidiaries was ISK 682.5 million, as opposed to ISK 232.7 a year earlier. EBITDA was therefore 7.9% of total income for the year.
Salaries and wages for the year amounted to ISK 2,523.3, a rise of 54% for the group as a whole. The higher wage bill is mostly due to growing workforce, particularly after the acquisition of AppliCon A/S in Denmark. The average number of employees at Nýherji and its subsidiaries was 337 during 2006, an increase of 45 from the previous year. At the end of the year, there was the equivalent of 351 full-time positions, with an actual staff of 371 employees.
The company's revenue from the sale of goods and related services was ISK 5,723 million, while consultancy and software sales generated ISK 2,961 million in sales during the year. Operations abroad generated an income of ISK 1,050 million, or around 12% of the total income.
Fourth quarter
Total revenues for Nýherji and its subsidiaries in the fourth quarter of the year amounted to ISK 2,704.2 million, an increase of 27% compared with the same period a year earlier. Quarterly profits were ISK 68 million, compared with ISK 25.1 million a year before. EBIDTA was ISK 173 million, compared with ISK 102.6 million in the same quarter in 2005.
Operations
Nýherji is a market-driven knowledge company that delivers quality solutions and services to its customers in the field of information technology and business consulting. In recent years, the company has invested heavily in training, acquisition of new knowledge, and in developing new software solutions and services, mostly connected to SAP software. As these investments have been expensed immediately, the profits in recent years have been adversely affected, but the company has now started to reap the benefits as profits have started to rise.
Nýherji's position in the IT market strengthened in 2006, borne out by high revenue growth and good returns. Customer support and sales operations are efficient, being built on close cooperation and consultation with customers. The company's emphasis on developing and marketing consulting and service solutions to specific market segments has changed the revenue mix whereby 45% of Nýherji's income comes from service sales.
In addition to improving its position in its core markets, Nýherji strengthened its position outside the Reykjavík metropolitan area by opening of an office in Akureyri in North Iceland and with the acquisition of Tölvusmidjan ehf. in East Iceland.
Gold certificated service
Nýherji achieved especially good annual results in sales of services for IBM servers, IP telephony solutions, IBM software and business services. The company worked extensively on implementation of IP telephone systems for several Icelandic companies with multiple located around the world, and took the first steps in offering this sort of service in Denmark. Nýherji was the first Nordic company to receive gold certification from Avaya, one of the world's leading communications solution providers. There has been continuous growth in the field of hosting and outsourced services along with hosted IP telephone services. Demand for Lotus Workplace software has also been buoyant.
Growth in sales and services for end-user solutions
There was good growth in sales of end-user equipment such as laptop computers, photocopiers, printers and audio-visual equipment, and there is now increasing emphasis on providing consultancy and services in this field. Sales and installations of commercial printing equipment and related solutions also strengthened. Nýherji became the sole business partner of Canon in Iceland during the year, but before the sales and distribution of professional video and photographic equipment had been in the hands of others. Nýherji also began importing ATM banking equipment from the American company Diebold.
AppliCon moves into Britain and Sweden
Last year was the first whole operating year for AppliCon Holdings ehf., which owns AppliCon ehf. in Iceland and AppliCon A/S in Denmark. Increased Nýherji profits can be attributed in part to improvements in AppliCon's operations and substantial profit during the year. AppliCon specialises in the sale and development of SAP and Microsoft solutions. AppliCon established subsidiaries in Britain, Denmark and Sweden, and they will specialise in providing SAP consulting services, especially for financial institutions. AppliCon has become one of the leading companies in the field of SAP consultancy in the Nordics. It has been singled out by several commercial and professional magazines for its leading role in this field.
ParX ehf. - demanding consulting projects
ParX ehf., a Nýherji subsidiary, strengthened during the year, and operations were in accordance with expectations. ParX has worked systematically on developing quality services in the field of consultancy and research, in line with new and demanding projects. During the year the company appointed a number of new highly qualified consultants capable of meeting increased service requirements of customers.
New subsidiaries
In October, Nýherji bought all the shares in Tölvusmidjan ehf. in East Iceland. Tölvusmidjan sells computers and technical equipment along with a wide range of software and operational services. Klak ehf., a Nýherji subsidiary, had a good year, holding two investment conventions as well as taking part in several innovative projects. SimDex ehf.'s operations were not in accordance with expectations in 2006 although operational stability was achieved in the last part of the year.
Increased business stability
An increased proportion of Nýherji's income is based on services, consultancy and software implementation. Income in foreign currencies has also increased, bringing improved stability that is reflected in the company's operating profits. Nýherji's objective is to further expand its business in the development and marketing of services and consultancy in the fields of software, audio-visual solutions, communications solutions and system integration. The company's foreign investments have proved satisfactory and future attention in this regard will be directed towards Northern Europe.
Prospects
Demand for information technology services has grown continuously and prospects for the next year are good. The company believes it can pursue a number of attractive opportunities abroad as well as in Iceland. Nýherji's projections allow for similar results in 2007 as in the past year.
About Nýherji hf.
Nýherji's role is to create added value for its customers through the expertise of its staff in IT and business operations and their understanding of client requirements. The company's objective is to provide its customers with quality solutions, first-class advice and professional services in information technology and business consulting. Nýherji offers quality software, computer and office equipment, and reliable technical and business consultancy services. Shares in the company are listed on the Iceland Stock Exchange.
Members of the Board of Directors are Benedict Jóhannesson, Chairman, Árni Vilhjálmsson and Gudmundur Jóhann Jónsson. The Managing Director of the company is Thórdur Sverrisson. Further information can be obtained by telephone, +354 569 7711 / +354 893 3630. Nýherji's website is www.nyherji.is.
