Performance in the 1st quarter comparable to previous years, the Group is in a good financial condition
In the 1st quarter of 2020, the Atende Group reported results that do not significantly deviate from those normally achieved in the corresponding period in previous years. Although the comparison of the results of the 1st quarter of 2020 to the 1st quarter of the previous year shows significant decreases, this is mainly due to the high benchmark. The first quarter of the previous year was an exceptional quarter, with an increase in sales of 30% y/y, primarily as a result of non-standard projects carried out by the parent company for the telecommunications sector.
The high benchmark gives a false impression of the company’s poor performance. The result generated was also influenced by two other factors — said Roman Szwed, President of the Management Board of Atende SA. Sputnik Software is no longer consolidated as we sold the shares in the company at the end of 2019. The net result was also adversely affected by financial costs which were higher by 1,143 thousand year-on-year – mainly due to foreign exchange losses linked to the valuation of liabilities related to lease agreements for office premises denominated in euro due to the requirements of IFRS 16, which should be considered as a purely accounting effect. The observed slight decrease in sales is related only to the effects of the slowdown caused by the pandemic.
Roman Szwed also added that the company is in a very good financial condition thanks to its cash reserves. As at the end of the 1st quarter of 2020, cash stood at PLN 25.7 million.
In the 1st quarter of 2020, the Atende Group earned sales revenue of PLN 42,023 thousand, which represents a decrease by 43% y/y, while the gross profit on sales amounted to PLN 14,500 thousand, which means a decrease by 18% y/y. As a result, operating result was negative in the reported period and stood at PLN (692) thousand (down from PLN 2,204 thousand in the 1st quarter of 2019), EBITDA at PLN 2,477 thousand (down by 57% y/y), and the Group recorded a net loss of PLN 1,817 thousand compared to a profit of PLN 1,228 thousand in the previous year.
The only operational factor impacting the decline in results were the restrictions related to the pandemic, in particular the related stagnation in the public sector. Revenue from public sector customers in the parent company Atende decreased by PLN 13.6 million compared to the 1st quarter of 2019. Market stagnation also contributed to the postponement of the deadlines for projects outside the public sector, worth approx. PLN 10 million in total. The decrease is mainly due to the postponement of delivery of one project to the second quarter, caused by restrictions related to the pandemic.
Sales to customers from the telecommunications and media sector are also made by Atende Software which observes an opposite trend, namely a significant increase in demand for its subscription online multimedia content distribution services. In the 1st quarter of 2020, Atende Software’s sales of these services to customers in this sector amounted to PLN 6.7 million (up by 78% y/y).
The Management Board believes that in the current economic situation related to uncertain future in the markets, the company’s financial stability is more important than a temporary increase in sales, and we are fortunate to have it — added Roman Szwed.