Damovo Group's bonds fell 10 more points, continuing a sharp decline that began last month. Its 10 1/4% fixed-rate notes fell to 46; the notes have dropped 35 points over the past three to four weeks, according to a trader. Concerns about the company's liquidity and its ability to make a coupon payment at the end of this year have increased since it posted poor results in June, said the dealer.
UK-based Damovo, which provides IT services to large organizations, posted a e24.4 million net loss and negative EBITDA of e1.8 million for the second quarter, compared with a e30.2 million net loss and EBITDA of e4.5 million in the same quarter of 2005 (CIN, 7/06). The main reason for the poor results was a fall in sales at its Italian operations where it is a large provider of IT services to the Italian government. A drop in Italian sales orders at its competitor Bull, a European-based global provider of IT services, has only increased concerns that orders will not pick up at Damovo. Bull said its Italian sales were 50% lower in the first half of 2006 than in the same period in 2005. Calls to Bob Contreras, Damovo cfo, were not returned.