AMSTERDAM (Reuters) - Dutch navigation and digital mapping company TomTom (TOM2.AS), reported a drop in fourth-quarter sales and profit on Wednesday, but forecast that its business selling location technology will grow in 2020 and that it will buy back shares.
The company reported a net loss of 69 million euros ($76 million), compared with a profit of 1.4 million euros in the same period of 2018. That reflected both a 10% fall in sales to 156 million euros and one-time higher amortization costs as it shortened its estimation of the useful life of its maps.
TomTom has fallen out of the AMX Dutch mid-cap share index after the sale last year of its Telematics fleet management business to Japan’s Bridgestone (5108.T) for 910 million euros.
The shrinking demand for dashboard-mounted GPS systems - the business that once made TomTom a prominent consumer brand in Europe - continued to wane, and made up less than a third of sales in the quarter.
Most of TomTom’s revenues now come from selling location technology connected to its digital maps. It said that business will continue to grow in 2020.
The company said it had an order backlog of 1.8 billion euros from automotive clients including Fiat Chrysler after a recent contract win.
Its revenue from software companies grew by 24% in the quarter to 41.2 million, thanks to a larger contribution from what it said was a single major customer. TomTom sells map services to Apple (AAPL.O) but expanded a partnership with Microsoft (MSFT.O) last year.
The company, which had net cash of 437 million euros at the end of Q4, said it would spend 50 million on share buy-backs.
TomTom shares closed at 10.05 euros on Tuesday, giving it a market value of 1.32 billion euros.
Reporting by Toby Sterling