Very good performance of Atende Group in the 2nd quarter and the 1st half of 2016

Atende Group’s results for the 2nd quarter of 2016 were significantly better than a year ago. As a result, despite unfavourable economic situation, the Group managed to improve its performance also in the entire 1st half of 2016.

In the 1st half of 2016, the Atende Group, which specialises in ICT systems integration, recorded an improvement in major items of the statement of comprehensive income as compared to the corresponding period of the previous year. The Group managed to achieve such result despite unfavourable economic situation related to the reorganisation of the economy and delays in the execution of projects co-financed from EU funds. Despite slightly lower consolidated revenue on sales (PLN 85,545 thousand, which represents a decrease by 7% y/y), the Group managed to generate gross profit on sales at the level higher than the one recorded in the previous year by 22% amounting to PLN 28,746 thousand, which results from an increase in the sales of high-margin services. The increase in gross profit significantly exceeded the increase in general and administrative costs (6% y/y), thanks to which increases in profitability were recorded, EBITDA increased by 126% y/y to PLN 6,080 thousand, and the net profit amounted to PLN 1,409 thousand as compared to the loss of PLN 1,557 thousand in the 1st half of 2015.

Good performance of the Group is significantly related to the increase in sales in the market of telecommunications and media operators. The Atende Group’s sales revenue for the 1st half of 2016 was higher than in the previous year by 43%. Projects implemented by Atende for mobile operators 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. In the 1st half of 2016, revenue from mobile operators amounted to PLN 20.3 million, which represents an increase by 114% y/y. Apart from Atende, sales to the sector’s customers are also generated by Atende Software, which provides multimedia content distribution services. In the 1st half of 2016, Atende Software’s revenue from these services amounted to PLN 6.7 million, which represents an increase by 32% y/y.

Atende Group also noted a considerable increase in sales of subscription services. In the 2nd quarter of 2016, the margin amounted to PLN 10,206 thousand, which represents an increase by 59% y/y. The margin earned covered 55% of the consolidated quarterly fixed costs of the Atende Group (38% in the previous year). The largest growth in sales of subscription services, as compared to the preceding quarter, was recorded from the distribution of multimedia materials by Atende Software, implementation of maintenance services by Atende and sales of IT system maintenance services to local government units by Sputnik Software.

The macroeconomic situation in the 1st half of 2016 was not favourable. The continued reorganisation of the economy and the related uncertainties in the domestic market contributed to reduced activity of customers in the area of investments, including IT investments. Additionally, the 1st and 2nd quarters of the current year were another quarters of delays in organising tenders from the new financial perspective of the EU. The unfavorable circumstances were not without effect on activities and financial results of the Atende Group companies. Nevertheless, the combined impact of subsidiaries on the consolidated profits at operating, gross and net levels achieved in the 1st half of 2016 was positive. Among subsidiaries, Atende Software and Sputnik Software had a significantly positive impact on the result. The impact of other companies was neutral.

— We are delighted that despite a difficult situation in the market, we consistently manage to pursue the company’s development strategy in the area of high-margin services, which is clearly visible in the Group’s results after the 1st half of 2016 — says Roman Szwed, President of the Management Board at Atende S.A. —  We are particularly pleased with a significant increase in the value of subscription services in the 2nd quarter, which covered the Group’s quarterly fixed costs in over 50% for the first time in Atende’s history, contributing to welcome financial stability of the Group — he adds.