Sun, Dec 22 2024
Early morning trading saw a decline in Worldline's stock, a French payments processor, as the business revealed a net loss attributable to a €1.15 billion impairment charge in merchant services and a worsening outlook.
In 2023, the firm declared a "net loss group share" of €817 million, down from a profit of €211 million in the previous year. In keeping with updated projections, it also revealed a 6% increase in full-year sales.
The performance of merchant services varied during the year, with a strong first half and a disappointing second half. This was mostly caused by Europe's economic and consumption slump, which was worse in the fourth quarter compared to the third. Because of the low conversion rate of pipeline possibilities, the financial services division of the company reported a 1.3% loss in revenue.
According to Worldline, "conservative assumptions reflecting the change in valuation paradigm in the payments' industry" were the basis for the impairment of merchant services.
The company implemented a cost-cutting initiative in February, eliminating 1400 positions. According to the company, the Power24 plan will save €200 million in run-rate cash expenditures starting in 2025, despite costing about €250 million.
Worldline's stock fell precipitously in October of last year after the vendor issued a warning about the worsening sales forecast and the cancellation of some merchant relationships as a result of the rising rates of cybercrime.
Since then, Crédit Agricole has purchased a 7% share in it to support it, attempting to maintain the viability of a proposed joint venture between the two companies.
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