CEE distributor AB Group has seen its profits fall in its FY2019, amid what its president has described as a difficult native market.
In its financial year ending June 30, 2019, the Wroclaw-headquartered distributor saw its net profit fall by 5.2 per cent year on year to PLN 57.78m (€13.18m).
However, revenues were up 6.8 per cent to PLN 8.79bn (€2.01bn).
In July, Polish analyst house DM BOŚ specifically highlighted the takeover of AB's home rival, ABC Data, by German giant ALSO in June, as being good news for AB's bottom line.
"In the financial year 2019/20, we expect an improvement in AB profit dynamics due to the low profit base in 2018/19, and the end of the price war," it's report read.
Talking about it short term prospects, AB President Przybyło said that profits are expected to recover in the next quarter due to changes in AB's rival landscape.
"A return to previous levels would be a strong positive impulse. Subjective changes on our competitive map may prove to be significant in this aspect," he said.
In previous quarters, AB has also referenced a "price war" among players in the Polish distribution market.
Local distributors have been under consistent financial pressure in recent years.
The particular pressure point affecting margins has been described by one CEO to CPI as "a sensitivity on pricing" among CEE customers.
Indeed, in the preceding months before it succumbed to a takeover bid by ALSO, ABC Data's net profits sank to a PLN 7.36m loss for its H1 2018.
However, AB Group pointed to IDC's CEE forecast, which predicts that the IT market in the region is expected to grow by five per cent in 2019, with sales of IT equipment forecast to hit of $6.8bn.
With a headcount of over 1,100 people AB Group operates across Poland, the Czech Republic and Slovakia.
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