Robust financial results of the Atende Group after the 3rd quarter of 2016

Despite the continued downturn in some sectors of the economy, the Atende Group recorded higher profits in the last three quarters of 2016 than in the previous year.

Cumulative results in three quarters of 2016 were significantly better than those generated in the corresponding period of the previous year. Despite the fact that revenue, which amounted to PLN 134,964 thousand this year, was lower by 27% y/y, the Atende Group managed to generate gross profit on sales at the level higher by 12% than the one recorded in the previous year (increase to PLN 45,066 thousand). Consolidated general and administrative costs were slightly higher than in the previous year (increase by 6% y/y to PLN 39,746 thousand) which results from an increased scale of the Group companies’ operations and commencement of consolidation of results of Energy Data Lab starting from the 1st quarter of 2016. Owing to the fact that the increase in gross profit on sales was higher than the increase in general and administrative costs, the Group earned higher profits than in the previous year. There was an improvement in the operating result (increase by 70% y/y to PLN 6,361 thousand), EBITDA (increase by 30% y/y to PLN 11,035 thousand) and in net profit (increase by 94% y/y to PLN 4,240 thousand).

In the 3rd quarter of 2016 alone, sales revenue amounted to PLN 49,419 thousand which represents a decrease by 47% y/y. It is worth noting that in the 3rd quarter of 2015, which set a new record in terms of revenue earned in the Atende Group’s history, the company recorded revenue from public sector customers which was higher by over PLN 50 million than that in the 3rd quarter of the current year. Despite lower quarterly sales in the current year, the Group managed to generate gross profit on sales at the level close to the one recorded in the previous year (decrease by 2% y/y to PLN 16,320 thousand). The increase in costs by 6% y/y related to pro-development activities resulted in a decrease of the operating result, EBITDA and the net profit, respectively, by 21% (to PLN 3,363 thousand), 15% (to PLN 4,955 thousand), and 24% (to PLN 2,831 thousand) in the 3rd quarter.

Good results recorded in the period of three quarters of 2016 are significantly related to the sales increase in the market of telecommunications and media operators, where the Atende Group’s sales revenue was higher by 49% than in the previous year. Projects implemented by Atende for mobile operators (PLN 30 million, increase by approx. 100% y/y) were of key importance within this sector. They included mainly data transmission infrastructure extension, including the new LTE technology, as well as settlements and IP services billing. Atende Software also recorded a significant increase in the sales of multimedia content distribution services (PLN 11.9 million, increase by approx. 50% y/y). The growth of the telecommunications and media sector contributed to a substantial increase in the Atende Group’s independence from the public sector.

Due to the continued downturn in some sectors of the economy in 2016, the Atende Group have made a considerable effort trying to compensate for the absence of revenue from delayed projects with the provision of own services. The focus of the Group companies on the provision of own services resulted in this year’s significant increase in the percentage margin on gross profit on sales. On average, it amounted to 33.4% in the period of three quarters of 2016 as compared to the average of 21.8% in the previous year. This should be seen as a great success of the Capital Group and confirmation of being able to deal with more challenging market situation.