Good level of Atende's business; the result was influenced by external factors
In the first half of 2021, the Atende Group achieved poorer results than in the first half of the previous year, mainly due to the sale, at the turn of 2020 and 2021, of shares in two subsidiaries and the discontinuation of consolidation of their results. The factor which additionally negatively affected the results was the loss of industrial security certificates by Atende and the resulting contractual penalties charged by the customer. However, Atende generated sales revenue in the first half of 2021 of PLN 79.3 million, which represents an increase of 14% y/y, and the total impact of the subsidiaries on consolidated profits, at operating level and before tax, was positive.
“We would evaluate the results of the sale as satisfactory had it not been for the loss of the security certificates and the consequent contractual penalties. It is worth emphasising that as far as ICT integration is concerned, Atende generated sales revenue higher by over PLN 10 million than the year before. We welcome the particularly high level of customer confidence in the telecommunications sector and the increasing level of sales to the financial sector growth important for our agenda,” says Marcin Petrykowski, President of the Management Board of the Atende Group.
It should be noted that, according to the Management Board, the status of the case related to security certificates, which was the basis for withdrawing from the contracts with the customer and for charging penalties, remains open. The Company filed an appeal and received a decision of the second instance, revoking the decisions of the first instance and referring the case for reconsideration. As at the moment of publication of the results for the first half of 2021, the company awaits confirmation of the status of certificates by the issuing authority.
Additionally, the operating activities of Atende and the presented results were negatively affected by the external problem, announced by the Management Board in May this year, related to delays in the delivery of products of the key supplier, resulting from post-pandemic disruptions in production. This problem will probably also exist in the second half of this year.
In the 1st half of 2021, the Atende Group earned sales revenue of PLN 88.0 million, which represents a decrease by 6% y/y, while the gross profit on sales amounted to PLN 24.7 million, which means a decrease by 24% y/y. The year-on-year decrease in gross profit on sales (by PLN 7.8 million) and general and administrative costs (by PLN 7.5 million) is mainly due to the fact that the results of the sold companies, Atende Software and Atende Medica, were not consolidated in 2021: the combined contribution of the two companies to sales revenue and EBITDA in the first half of 2020 was PLN 20.1 million and PLN 4.5 million, respectively. The year-on-year deterioration of performance at the operating level (a loss of PLN (0.4) million vs. a profit of PLN 2.8 million in the first half of 2020), EBITDA (PLN 4.4 million vs. PLN 9.3 million), and net level (a loss of PLN (1.8) million vs. a profit of PLN 1.3 million a year earlier) is mainly attributable to the contractual penalties received from the Cyberspace Resources Centre of the Polish Armed Forces in the total amount of PLN 3.1 million.
Activities related to smart grids, carried out by Atende Industries since December 2020 and previously by Atende Software, generated sales revenue of PLN 2.1 million in the first half of 2021, compared to PLN 1.6 million a year earlier. Phoenix System, which operates in the industry, trade and services sector, significantly increased its revenues (PLN 1.6 million vs. PLN 0.8 million a year earlier), mainly through development work in projects for smart gas and electricity meters. In addition to contributing revenues from the provision of specialised billing solutions in the amount of PLN 1.9 million, A2 Customer care, together with Atende S.A., participated in the still pending CSIRE tender conducted by PSE S.A., which is one of the most important contracts in the area of information systems in the Polish energy market.
As a Group, we consistently maintain our focus on further development of smart energy solutions and specialist software integration. “The results of the Group companies and the growing interest of our customers in these priority segments of the offer confirm the legitimacy of the set priorities,” adds Marcin Petrykowski.
The Management Board plans to publish a new strategy for the Group in the coming months.