Swedish ERP provider IFS benefited in the fourth quarter from its focus on defense and infrastructure customers, as revenue rose 9% to SKr 744 million and after-tax profit more than doubled to SKr 64 million from the year-earlier quarter. But the wretched global economy caused customers to delay payments, weakening cash flow.
Revenue was also up for the year ended Dec. 31, 2008, to SKr 2.52 billion, an increase of 7%. After-tax earnings for 2008 fell 22% to SKr 95 million, largely because the company spent about SKr 24 million on a restructuring program it announced after its second quarter. For the year, earnings before interest and taxes rose 11% to SKr 154 million.
The positive results in a gloomy economic environment reflected IFS’ ongoing move away from consumer-facing industries, such as automotive and electronics. About 70% to 80% of new customers for the year came from defense, infrastructure, utilities, and what the company calls the “EPCI” segment: engineering, procurement, construction, and installation. In manufacturing, IFS focuses on process industries, such as food, and construction of equipment for large projects.
“There are still major trends that will drive long-term investment, such as the development of alternative sources of energy, demand for food and other natural resources, and military projects,” CEO Alastair Sorbie said in a statement. “Furthermore, many governments plan increased investments in infrastructure to stimulate the activity in their economies.”