Atos shares plummet as costs from split deepen loss
Atos shares plummet as costs from split deepen loss
Atos Reports Wider Half-Year Loss Amid Planned Split, Shares Plummet
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July 28 (ANBLE) – France’s technology company Atos (ATOS.PA) has announced a wider half-year operating loss due to restructuring costs associated with its planned split, causing a significant drop in its shares. The company, currently undergoing a split into two separate entities – cybersecurity and digital transformation unit Eviden, and its loss-making legacy services branch, Tech Foundations – recorded a first-half operating loss of 434 million euros ($475.6 million), compared to a loss of 298 million euros in the previous year. Atos cited a 430 million euro write-down from the reorganization as the reason for this loss. The news resulted in an immediate market response, with Atos shares experiencing their biggest one-day decline since June last year, falling as much as 20%. As of 0816 GMT, the shares were down by 19%.
Tech Foundations, the loss-making branch of Atos, has reportedly attracted interest from investors, including Czech tycoon Daniel Kretinsky. However, Atos mentioned that it had rejected several indicative offers for the unit without confirming any specific names.
In addition to the split, Atos also announced an expansion of its previously planned 700 million euro divestment program for non-core assets by an additional 400 million euros. The company’s Senior Executive Vice President, Diane Galbe, stated that they have already received signals of interest for assets identified in their supplementary divestment plan, although she did not disclose which assets those were.
Atos expects to reach its initial divestment target by the end of 2023, coinciding with the completion of the sale of its sustainability consultancy unit, Ecoact, to Schneider Electric (SCHN.PA).
Despite the challenging first half, Atos has revised its 2023 organic revenue target, now anticipating it to be in line with or increase by up to 2% from the previous year. This adjustment is an improvement from the previous range of -1% to +1%.
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For the first six months of the year, Atos reported revenue of 5.5 billion euros, representing a 2.3% organic growth. However, this figure was slightly below the 5.57 billion euros expected by analysts polled by Refinitiv Eikon.
These recent developments highlight the significant changes and challenges that Atos has been facing. The planned split and divestment program aim to streamline the company’s operations and enhance its focus on core businesses, boosting its financial performance and market competitiveness moving forward.
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