Logicom Public Ltd reported a sharp drop in profit attributable to shareholders for the first quarter of 2026, falling by 55.2 per cent to €10.7m, compared with €23.9m in the same period last year, according to the company’s interim management report. 

The decline was mainly attributed to the lower write-off of negative goodwill from the acquisition of investments, as well as reduced turnover, gross profit and other income. 

This was partly offset by lower administrative expenses, reduced expected credit losses and lower taxation when compared with the first quarter of 2025. 

Gross sales decreased by 2 per cent to €286.6m, from €292.4m a year earlier. 

The group said the distribution sector recorded a marginal decline of 0.9 per cent, mainly due to lower sales in Saudi Arabia, the United Arab Emirates, Kuwait and Romania. 

The software solutions and integrated IT solutions division posted a more significant drop, with gross sales falling by 18.4 per cent, mainly as a result of weaker activity in Cyprus and Greece. 

Group sales, which include revenue from contracts where Logicom acts as principal as well as gross profit from agency transactions, fell by 14.6 per cent to €199.9m, compared with €234m in the first quarter of 2025. 

Logicom explained that, under IFRS 15, certain transactions involving software licences and cloud computing products are treated on an agency basis, meaning only the gross profit is recognised as sales. 

Despite the decline in sales, the group’s gross profit margin on gross sales edged up to 7.9 per cent, from 7.8 per cent a year earlier. 

The gross profit margin on reported sales also improved, rising to 11.3 per cent from 9.7 per cent in the corresponding period of 2025. 

Other income fell sharply to €208,726, from €925,947 last year. 

The company said the decline mainly reflected the fact that the first quarter of 2025 had included insurance compensation of €762,462 collected by subsidiary Logicom Italia s.r.l following a claim. 

Other income also included supplier contributions for product promotion, as well as income from collaborations with third parties. 

Expected credit losses stood at €71,268, compared with €78,244 in the same period last year. 

Administrative expenses decreased by €603,329, or 3.9 per cent, mainly due to lower personnel costs and reduced staff travel abroad, following the unstable conditions created by conflicts in the Middle East. 

Profit from operating activities, including the results of controlled company Demetra Holdings Plc, fell by 3.1 per cent to €7.9m, from €8.1m in the first quarter of 2025. 

However, operating profit from the group’s ordinary activities, excluding Demetra, increased by 4 per cent, supported by lower administrative expenses and expected credit losses, despite the decline in turnover, gross profit and other income. 

The cost of banking facilities, including interest receivable and payable as well as related banking expenses, fell by 27.7 per cent to €1.6m, from €2.2m a year earlier. 

Logicom said the decrease reflected a significant reduction in net borrowings used to finance turnover, as well as lower lending rates in US dollars and euros. 

The group also recorded a foreign exchange gain of €95,487, compared with a gain of €1.5m in the first quarter of 2025, mainly linked to movements in the US dollar against the euro. 

Meanwhile, the write-off of negative goodwill in the first quarter of 2026 related to the acquisition of AGI-Cypre Property 45 Limited. 

On January 29, 2026, the group acquired 31.8 per cent of the company through subsidiary Najada Holdings Limited, and a further 26.3 per cent through controlled company Demetra Holdings Plc, which holds 68.2 per cent of AGI-Cypre Property 45 Limited. 

Logicom said the negative goodwill arose from the difference between the acquisition cost and the value of the company’s net assets at the acquisition date. 

Cash and cash equivalents, in relation to the group’s bank overdrafts, showed a debit balance of €418.8m at the end of the first quarter of 2026, compared with €443.2m at the end of 2025. 

Short-term loans increased to €91.1m, from €78.4m, while long-term loans decreased to €7m, from €17.2m. 

The company also referred to its desalination activities through Verendrya Ventures Limited, in which Logicom holds 60 per cent. 

Verendrya participates in the Episkopi desalination plant and the renovated Larnaca desalination plant, both carried out under agreements with the water development department. 

Demetra Holdings Plc also participates indirectly in both projects through its interest in Verendrya’s joint venture. 

Regarding the outlook, Logicom said its first-quarter results remained within the framework of the board’s estimates. 

The company added that there were no income from non-recurring or extraordinary activities during the period, apart from the items already mentioned in the report.