Technology solutions distributor Logicom Public Ltd recorded an 8.8 per cent increase in operating profit in the first half of 2026, despite lower sales, although profit attributable to the company’s shareholders fell by 39.3 per cent compared with the same period last year.

Operating profit rose to €19.61 million in the six months to June 30, 2026, from €18.03 million in the first half of 2025, with Logicom attributing the improvement mainly to higher gross profit, lower administrative expenses and reduced expected credit losses.

However, profit attributable to shareholders dropped to €16.83m, from €27.74m a year earlier, a decline of €10.92m.

Logicom said the fall in shareholder profit was mainly linked to lower other income, higher net finance costs, a reduced share of profit from joint ventures and a significant reduction in the negative goodwill recognised from investment acquisitions.

These effects more than offset reductions in administrative expenses, expected credit losses and taxation, the company said.

The company’s gross sales fell marginally by 0.5 per cent to €578.99m, from €582.04m in the first half of 2025.

Within this figure, sales in Logicom’s distribution division increased by 0.4 per cent, mainly reflecting stronger sales in Cyprus, Greece and Jordan.

This was offset by a 14 per cent decline in gross sales from the software and integrated IT solutions division, mainly because of lower sales in Cyprus and Greece.

Reported sales, which reflect revenue from contracts where Logicom acts as principal together with gross profit from transactions where it acts as an agent, fell by 16.5 per cent to €409.11m from €489.95m.

Logicom explained that it acts as an agent rather than principal in certain transactions involving software licences sold separately from other equipment, as well as cloud products, under IFRS 15.

In those cases, the supplier carries the main performance obligation, meaning Logicom recognises only the gross profit from the transaction as sales.

Despite the lower sales, gross profit increased to €45.12m, from €43.83m in the first half of 2025.

The gross profit margin calculated against gross sales consequently rose to 7.8 per cent from 7.5 per cent, while the margin based on reported sales increased to 11.0 per cent from 8.9 per cent, mainly because the group made sales carrying margins above its average.

Other income declined to €4.42m from €5.82m, largely because the previous year included a €762,462 insurance-related compensation payment received by Logicom Italia.

The company also reported lower other income from controlled company Demetra Holdings Plc, while other income includes supplier contributions for promoting their products and income from third-party partnerships.

Expected credit losses fell to €80,818 from €164,454, with the amounts recognised in accordance with IFRS 9.

Administrative expenses fell by €1.65m, or 5.2 per cent, mainly because of lower staff costs and reduced overseas business travel expenses amid the continuing conflicts in the Middle East.

The cost of banking facilities, including interest and related banking expenses, also fell sharply to €2.84m from €4.83m, representing a 41.2 per cent reduction.

Logicom attributed this mainly to lower net borrowing used to finance its turnover and lower borrowing rates for US dollars and euros compared with the previous year.

Foreign exchange movements, however, produced a €710,123 loss, compared with a €2.43m gain in the first half of 2025, mainly because of movements in the US dollar against the euro.

Logicom said it had adopted hedge accounting under IFRS 9 to reduce the impact of fluctuations in the dollar-euro exchange rate on its consolidated results.

The first-half results also included €8.88m in negative goodwill arising from the acquisition of AGI-Cypre Property 45 Limited.

On January 29, 2026, the group acquired a 31.8 per cent stake in the company through its 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.

The negative goodwill represented the difference between the purchase cost and the value of AGI-Cypre Property 45 Limited’s net assets at the acquisition date.

This compared with €17.27m of negative goodwill recognised in the first half of 2025, following Logicom’s increases in its stake in Demetra.

Logicom said its net share of profit or loss from joint ventures after taxation related to the desalination plants in Larnaca and Episkopi.

The group’s cash and cash equivalents, after taking account of bank overdrafts, stood at a debit balance of €417.77m at the end of June, down from €443.19m at the end of 2025.

Short-term loans fell to €66.77m from €78.43m, while long-term loans declined to €5.62m from €17.23m.

During the first half, Logicom continued distributing high-technology products, providing IT, telecommunications and software services and integrated solutions, participating in water infrastructure projects and holding interests in public companies.

The company said the operating environment in the Middle East and Europe remained affected by the continuing conflicts in the Middle East, creating uncertainty and increasing the risk of wider regional instability.

Nevertheless, profitability from ordinary activities increased in the first half, excluding the results of controlled company Demetra and the net share of profit or loss from joint ventures.

Logicom attributed that improvement mainly to higher gross profit, lower administrative expenses, reduced expected credit losses and lower taxation.

Management said it was closely monitoring developments with the aim of maintaining and strengthening the group’s growth prospects without affecting its sustainability or strong financial position.

Its plans for 2026 remain focused on expanding in existing and new markets and taking advantage of opportunities available in the market.

Logicom also stated that its first-half results were within the expectations of its board of directors, while noting that the period contained no income from non-recurring or exceptional activities other than those already identified in its report.