Ingram predicts Aussie breakeven or profit next year

Ingram Micro Australia has continued its turnaround following 2011’s troublesome SAP rollout with a significant reduction in losses for the third quarter.

Although the distributor’s Australian business made a loss of $2 million in Q3 2013, this was a notable improvement on the $9 million loss a year before.

Ingram reported its third-quarter results to the NYSE last week, with global revenues up 12 percent year on year to $10.2 billion.

Its gross margin was 5.9 percent, up from 5.02 percent year on year. Ingram posted operating income of $138 million, up from $93 million a year earlier.

Its mobility business was a solid performer; in addition to strong demand for mobile products, Ingram Micro said it also received a boost from its Brightpoint mobility business, which the distributor acquired last year for $840 million.

Brightpoint specialises in mobile device life-cycle services and solutions, which has become a key focus for Ingram Micro.

"The business is performing well," said Ingram chief executive Alain Monie. "We're executing well on integrating the new mobility business."

While Ingram is still in the red in Australia, it is on track, said Ingram chief operating officer Bill Hume.

"We continue to make consistent progress in Australia's operations. Revenue grew for the third straight quarter and we reduced Australia's operating loss to less than $2 million, a sequential and year-over-year improvement from operating losses of approximately $3 million and $9 million, respectively."

Moine said Ingram should get back in the black in Australia by the end of the next financial year, adding "given the seasonality patterns, it could be that the first half is not there yet, but the second half should allow us to compensate and end up the whole year with breakeven or slightly profitable level".

Moine added that "the market in Australia is really not supporting high growth", and that any uplift in performance would come from "continuing the improvements in our systems".

Ingram Australia boss Matt Sanderson told CRN the improvement was thanks to the distributor getting closer to partners. 

"This year we’ve been focusing really hard on improving the experience for our partners. And we’re pleased with the progress we’ve made so far.

Sanderson said the distie has put in place several new initiatives. "We’ve established a new dedicated SMB team, launched and run several highly successful reseller enablement programs, simplified our contact points to make it easier for partners to reach the right people, and analysed and optimised internal business processes to make them more efficient.

"Feedback suggests what we’ve done so far has indeed improved their experience, which is gratifying."