Focus on IT
The IT sector started the year with a race to win two large contracts for providing IT services to insurer PZU and for supplying an integrated computer system for bank PKO BP, both of which will dominate activities in the sector for the rest of 2003.
On April 10, Prokom Software, the country's largest IT firm, bought 1.44 million shares of Softbank from Aleksander Lesz, the company's president, thereby increasing its stake to 23.22%. Prokom is one of the two companies on PZU's shortlist for supplying IT services and solutions. The tender is expected to be executed at mid-year. Analysts estimate that the PZU contract is worth about €117.6 million (zł. 500 million). According to BOŚ brokerage, Prokom, which has formed a consortium with global IT consulting company CSC, is believed to be the favorite. Winning the tender would strengthen Prokom's position on the IT market as well as assure that it receivs a steady revenue stream for the next three to four years, the approximate duration of the contract. Prokom's financial results may also improve if Softbank wins the PKO BP tender. The financial software producer was the only domestic company to be included on the bank's shortlist. BOŚ brokerage estimates that Prokom will post a net profit of €17.1 million (zł. 72.7 million) this year.
ComArch is planning to join forces with Cap Gemini Ernst & Young, an IT consulting firm, to win some IT contracts from the public administration sector. The Kraków-based IT integrator managed to double its revenue from public administration contracts in 2002. On April 9, ComArch repurchased 361,400 of its shares, which investors sold for zł. 32.20 each, while the company's share price on the Warsaw Stock Exchange was about zł. 30. According to Bank Zachodni WBK brokerage, good fourth quarter results in 2002 as well as contracts worth €16.5 million (zł. 70 million) this year may result in a moderately good fiscal year for ComArch. As a result, analysts increased the company's net profit estimate to €1.05 million (zł. 4.5 million) for 2003.
ComputerLand signed a deal with AmerBank in late March for a new IT system worth €5.22 million (zł. 22.2 million). The domestic systems integrator will supply a central "Profile" system designed by Sanchez Computer Associates, a banking and brokerage software provider, along with an IT system and computer equipment. ComputerLand has neither been included on PKO BP's shortlist for its new integrated IT system, nor been added to PZU's shortlist for its IT services tender. This came as a surprise for BRE Bank analysts as ComputerLand was believed to be one of the favorites for both tenders. Analysts believe that ComputerLand will cut costs if it fails to win any large tenders this year, since it would have to bear the costs of maintaining the teams it created to fulfill the contracts.
Neither the first nor the second quarters of this year will likely be profitable for ComputerLand, compared with the same periods last year, analysts say. ComputerLand's contracts for the first quarter totaled about €30.6 million (zł. 130 million), according to estimates by Bank Pekao brokerage, which is a third less than the total contract sales in the same period of the previous year. The company's second-quarter contracts should remain at a similar level as in the first quarter. Pekao brokerage anticipates that ComputerLand's net profit will increase by 34% this year on a 16% increase in sales. However, their estimate assumes that the company will be able to sign a lucrative contract in the second half of the year, possibly from the public administration sector, regarding the creation of a central nationwide car and driver register, or possibly a central medical services register.
