CGI feels equipped to weather the crisis

CGI s’estime équipée pour traverser la crise

Photo: Paul Chiasson, The canadian Press
The multinational quebec has been a slowdown in the awarding of contracts in the public and private sectors.

CGI expects to be able to absorb the shaking of the storm caused by the COVID-19 even if the multinational quebec has been a slowdown in the awarding of contracts in the public and private sectors due to the pandemic.

In countries such as the United States and the United Kingdom — two of the major markets of the firm specializing in information technology and services-advice — governments are leaning more on the current crisis of public health, pointed out Wednesday, the president and chief executive officer of the company, George Schindler. He was speaking to analysts at a time when CGI has presented its results for the second quarter, where it posted a slight decrease in net income and an increase in revenue, in addition to announcing that it had obtained a six-year contract, with a value of 267 million US$, in the United States.

According to Mr. Schindler, the vast geographic footprint of the quebec society — presents to the four corners of the globe — as well as the diversification of its offer of services should allow it to mitigate the impact of the pandemic in addition to potentially promoting the conclusion of major acquisitions. “More than 60 % of our revenues come from sectors less affected by the crisis, such as governments, health, insurance, public services, and telecommunications,” explained the big boss of CGI.

The dashboard on the evolution of the coronavirus in Quebec, in Canada and in the world

CGI has indicated that nearly 90 % of its workforce of about 78, 000 employees performing telework. However, in some areas where its customers have delayed the awarding of new contracts or termination of their activities, employees of the company have had to sell their vacation or choose leave without pay. The members of the management of CGI, which Mr. Schindler, have renounced to their remuneration or accepts a reduction in salary.

The impact of the pandemic could result in restructuring charges ranging between 40 million and 75 million, if the storm delays the resumption of activities in the world. Currently, more than 2000 employees of CGI throughout the world are on leave forced. “These are difficult decisions to take,” said Mr. Schindler. But they are necessary to ensure that we have the [good] number of employees in the right places to meet the demand that is rapidly changing. “In Canada, CGI has not applied for any programme put in place by various governments to assist companies.

Despite the turmoil, Mr. Schindler has always the ambition to see the company doubling in size within the next five to seven years. He believes that the current context could smile at CGI to make a big decision, given that many companies have seen their market value plunge.

In the second quarter, CGI has seen its net income decline of 0.3 %, to 314,8 million. Per share, the net profit was a record $ 1.18, while he had been of $ 1.14 in the second quarter of the previous fiscal year, when there were more shares outstanding. Revenues increased 2% to 3.13 billion. Excluding non-recurring items, CGI posted adjusted earnings of 338.4 million, or $ 1.26 per share, compared to 324,5 $ million, or $ 1.17 per share, a year ago.

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