Waiting on the government and Russia
Coming off of the high of its best year ever, ComputerLand, one of Poland's biggest IT service providers, brazenly predicted in March that profits would rise 100 percent this year. While the company insists it wasn't an official forecast, the group's president, Tomasz Sielicki, had said that profits would double"for sure." Now, the company says, that prediction seems much less certain.
"It now seems more likely that we will undershoot rather than overshoot the target. But we still have a chance to be in line with this prediction," Sielicki said last week.
The trouble lies not so much in the group's bottom-line numbers - first-half profits were zł.7.23 million, up 10 percent over the same period last year, on revenues of zł.310 million. However, slow-going tenders in the public sector and in Russia are holding up an influx of funds, which the company was counting on to meet its target.
In the public sector and utilities, ComputerLand is waiting on 14 different tenders worth a total value of zł.700 million. The firm's supervisory board president, Michał Danielewski, blames the sluggishness of the decision-making on the new public-procurement law, which aims to make the public-tender process more transparent."As the leader of a private-market company, that's like oxygen for me," he said,"but unfortunately the side-effect is that all those processes are longer and longer."
In Russia, the company is participating in seven tenders, the most promising of which it entered with a consortium and will provide IT services for one of the leading banks in the country. That tender isn't expected to be finalized until sometime in October. If it comes through, it will be a windfall for ComputerLand.
"The whole contract could be for $10 [zł.33] million for the consortium," said Danielewski."For ComputerLand it should be more than zł.20 million. So it will be a significant contract which will mark our position on the Russian market for a long time."
As a result, the company says it will have a better idea whether it will fulfill expectations around mid-autumn.
"After the first half we have 26-percent fulfilled this prognosis, which is even better than the sum of our competitors, and we still have big chances to fulfill that, but it's really dependent on final decisions in the public sector, utilities, and Russia. Those decisions have to be made within the next two months. So in two months maximum I will give a clear message whether all those decisions make me more positive about this prognosis or not," Danielewski said.
"It now seems more likely that we will undershoot rather than overshoot the target. But we still have a chance to be in line with this prediction," Sielicki said last week.
The trouble lies not so much in the group's bottom-line numbers - first-half profits were zł.7.23 million, up 10 percent over the same period last year, on revenues of zł.310 million. However, slow-going tenders in the public sector and in Russia are holding up an influx of funds, which the company was counting on to meet its target.
In the public sector and utilities, ComputerLand is waiting on 14 different tenders worth a total value of zł.700 million. The firm's supervisory board president, Michał Danielewski, blames the sluggishness of the decision-making on the new public-procurement law, which aims to make the public-tender process more transparent."As the leader of a private-market company, that's like oxygen for me," he said,"but unfortunately the side-effect is that all those processes are longer and longer."
In Russia, the company is participating in seven tenders, the most promising of which it entered with a consortium and will provide IT services for one of the leading banks in the country. That tender isn't expected to be finalized until sometime in October. If it comes through, it will be a windfall for ComputerLand.
"The whole contract could be for $10 [zł.33] million for the consortium," said Danielewski."For ComputerLand it should be more than zł.20 million. So it will be a significant contract which will mark our position on the Russian market for a long time."
As a result, the company says it will have a better idea whether it will fulfill expectations around mid-autumn.
"After the first half we have 26-percent fulfilled this prognosis, which is even better than the sum of our competitors, and we still have big chances to fulfill that, but it's really dependent on final decisions in the public sector, utilities, and Russia. Those decisions have to be made within the next two months. So in two months maximum I will give a clear message whether all those decisions make me more positive about this prognosis or not," Danielewski said.
