A tale of two IT companies

The slow first quarter on the IT market had a negative effect on the Q1 results of Grupa Sygnity (formerly Computerland and Emax), whereas Kraków-based Comarch posted very positive results. Sygnity posted a net loss of zł.15 million for the first three months of 2007, the result of the ongoing impasse on the public-contracts market. The company's Q1 revenues of zł.266 million didn't satisfy its management board either, but the firm nonetheless remains positive about the prospects for the rest of the year.

"We are going through some changes, but the weak results are far from being a trend, we are looking forward to the rest of the year to show our potential again," said Piotr Kardach, vice president of the management board.

Sygnity's synergy

Sygnity's situation is partly the result of the time-consuming process of consolidating Computerland with Emax, one of the leading Polish data-communications companies. "This is why Q4 will be the most important for us. This is when we are expecting to feel the effects of the consolidation of the companies and the cost reduction that will come with it," offered Michał Danielewski, Sygnity's CEO. He has no doubts that his company will close 2007 with a significant profit.

The company expects to benefit from the government's plan to computerize the state, which will start next year. For the period 2007-2013 the Polish government plans to spend around x3 (zł.11.3) billion on computers and software.

In contrast to its competitor Sygnity, Comarch's figures showed an increase in sales revenue and a slightly higher net profit of zł.10.3 million in comparison to Q1 2006. So far Comarch has achieved 22 percent of its annual goal. This comes after Comarch invested zł.15 million in the Kraków special economic zone and hired almost 200 new specialists.

Comarch stoicism

Comarch did not suffer as much as Sygnity from the paucity of public contracts. The company's sales in this sector did drop four percent, but it achieved increased sales of 7.3 percent in the banking and finance branches. Comarch also won a public contract from the Ministry of Education worth zł.41 million.

The majority of Comarch's revenues came from the sale of services and its own software, making up 80 percent of total sales, a proportion which the company hopes to maintain.

The biggest challenge for Comarch this year will be to increase its sales abroad, which this quarter dropped four percent, to 24 percent of total sales. "Selling more of our products abroad is Comarch's top priority for the near future," said Rafał Chwast, the firm's director of finance. "We are doing our best to attract some big customers from Western Europe and the US and maintain a strategic partnership with them instead of looking for new customers," he added.