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Atos slides deeper into the red

Atos, struggling to restructure its business operations, has presented its financials for the first half of 2024. The ailing French IT services provider recorded an operating loss of €1.7 billion (about $1.8 billion)in the first six months of the year, compared to a loss of €434 million a year earlier; Its net loss for the half-year was €1.91 billion, compared to €600 million a year prevously.

Atos executives blamed weaker business as well as high depreciation and one-off impairment charges of almost €1.6 billion for the disappointing figures. The service provider’s revenue between January and June of this year amounted to €4.96 billion, down 10% year on year. Atos preferred to focus on the 2.7% decline at constant scope and exchange rates.

The Eviden division, in which Atos has bundled its most promising business areas, lost more than the legacy Tech Foundations side. Eviden’s sales fell by 4.2 percent year-on-year from €2.49 billion (at constant scope and exchange rates) to €2.39 billion. Tech Foundations’ revenue slipped by 1.4 percent from €2.61 billion to €2.58 billion. Originally, Atos had planned to split up much like IBM and Kyndryl did, selling Tech Foundations, but this plan was finally shattered at the beginning of 2024 and the service provider subsequently got more and more into financial difficulties.

Protective shield proceedings as a lifeline

Atos is currently fighting for its business future. It is currently seeking debtors’ protection through the French legal system: That will be decided by the commercial court in mid-October.

The service provider recently gained some breathing space with interim financing of €1.67 billion from banks and bondholders. Meanwhile, the debt burden that weighs on Atos has grown, from €2.32 billion in mid-2023 to €4.22 billion now.

Atos Chairman and CEO Jean Pierre Mustier hopes for better times. Mustier only took over as CEO from Paul Saleh at the end of July; Saleh lasted just six months in the role. “The opening of an accelerated safeguard proceedings by the Commercial Court is an important step in Atos’ financial restructuring process. We now have an agreement with our financial creditors that provides ample liquidity to run the Company and establishes strong foundations for the company’s future.”

Will France buy Atos’ BDS division?

Mustier pointed out that Atos had achieved its forecasts regarding its business targets, “despite soft market conditions in some of our key geographies.”

Intensive negotiations are currently underway with the French state. The main focus is on the future of security-related areas of Atos, such as the Bull SA division and the Big Data & Security (BDS) business. Market observers speculate that in the past, concerns on the part of French politicians could also have been responsible for the failure of sales negotiations.

Currently, the Atos management has received an offer of €700 million from the French state for parts of the BDS division. This is at the very lower end of the price range. A few months ago, Atos had estimated the value at €700 million to €1 billion. Together with conciliator Maître Hélène Bourbouloux, the Atos management is currently discussing the offer, the company said. However, Atos said that it could not give any assurance that these talks would be successful and that a conclusion would be reached


Read More from This Article: Atos slides deeper into the red
Source: News

Category: NewsAugust 1, 2024
Tags: art

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