Gemalto said revenues for its first half reached EUR 1.4 billion, down 8 percent year-on-year at constant exchange rates, though it added that Government Programs and Machine-to-Machine started accelerating in the second quarter after a slow start. Profit from operations fell to EUR 93 million from172 million, with EUR 50 million of free cash flow. The net profit declined to EUR 39.4 million from 106.4 million, with diluted earnings per share going lower to 0.44 from 1.19. The results include a goodwill impairment charge of EUR 425 million, as a result of deteriorated prospects for the removable Sim market.
CEO Philippe Vallee called the results disappointing, saying they were affected by ongoing adjustments in US EMV demand and faster than expected deterioration of its removable Sim business.
Looking ahead, Gemalto still expects to generate year-on-year stable revenue in the second half supported by the acceleration in its Enterprise, Government Programs and Machine-to-Machine businesses, leading to the outlook announced in July. The company will now put its attention on a number of priorities, including the rapid integration of the newly acquired Identity Management Business, the successful execution of its transition plan and on key investments.
