Sonda Q3 profits plummet 53.1% to US$8.4mn

- Tuesday, October 25, 2011

Sonda Q3 profits plummet 53.1% to US$8.4mn

Chilean systems integrator Sonda posted net profits of US$8.4mn during the third quarter 2011, down 53.1% on the year-ago period, the company said in a statement.

Revenues during the period rose 23% to hit US$264mn mainly due to higher revenues from the IT services and platform businesses.

Over the nine-month period profits decreased 6.3% to reach US$49.8mn, compared with the first nine months of 2010.

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The drop in net income is mainly explained by other comprehensive income losses, stemming from an agreement reached by Sonda and Brazilian authorities to settle a long-standing dispute for territorial taxes, which consisted of a one-time charge of US$4.3mn, and the negative effect of foreign exchange differences related to the depreciation of Latin American currencies during 3Q11. Without these two effects, net income would have grown by 12% compared to the first nine months of 2010, according to the company.

Chilean operations posted a revenue increase of 11.2% to US$105mn, while Ebitda increased 2.9% to US$23.1mn, leading to an Ebitda margin of 22% in 3Q11.

Operations in Brazil saw 13.5% growth in revenues to US$96.7mn year-over-year, with Ebitda reaching US$16.8mn and an 8% Ebitda margin.

Revenues in Mexico jumped 115% year-over-year to US$35.2mn during the quarter. Ebitda grew by 172% to US$4.5mn and the Ebitda margin improved to 12.7%.

Revenues in other countries in Latin America - including Argentina, Colombia, Costa Rica, Ecuador, Peru and Uruguay - also increased 45.4% year-over-year to US$27.2mn, driven by IT services.

Go to this link to read the full statement.

Sonda's net income and Ebitda for the period were lower than market estimates, according to Chilean investment bank BICE Inversiones, mainly due to lower margins in Brazil and unfavorable exchange rates.

However, the company is expected to benefit from a growth trend in sales in Latin America.

To read the bank's full statement on Sonda's results, in Spanish, go to this link