Atende Group’s results for Q1 2016 were slightly poorer than a year ago. Poorer Q1 results are the consequence of sales seasonality and a relatively worse market situation.
In Q1 2016, the Group generated PLN 31,752 thousand in consolidated revenue on sales (28% drop y/y), and managed to generate gross profit on sales at the level close to the one recorded in the previous year (increase by 3% y/y to PLN 11,059 thousand). As a result of fixed costs being higher than last year, due to the increase in the scale of activity, the EBITDA result was poorer (loss of PLN 827 thousand versus profit of 430 thousand the year before) and so was the net result (loss of PLN 2,250 versus PLN 1,459 thousand the year before).
Apart from the seasonal drop in sales, which is usually observed in Q1, also the market situation, i.e. reorganisation of the economy, led to decreased revenue, as it resulted in delays in the execution of projects co-financed from the EU funds. The Atende Group’s companies made a considerable effort trying to compensate for the lower revenue by offering high-margin own services. It is worth mentioning that the average gross profit on sales increased from 24.3% to 34.8% y/y.
Atende Group also noted an increase in sales of subscription services. In Q1 2016, the margin amounted to PLN 8,496 thousand, which represents an increase by 29% y/y. The margin earned covered 47% of the consolidated fixed costs of the Atende Group (41% in the previous year). The largest growth in sales of subscription services 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.
′Undoubtedly the poorer economic situation with fewer orders for IT systems had a negative impact on the Atende Group’s financial results in Q1 2016. We are expecting the poor economic situation to be temporary, and I believe that the Group will make up for the losses in Q1 during subsequent quarters. It is worth mentioning that in Q1 a move towards high-margin services, including subscription services, was observed, which is beneficial. This is a result of a consistently pursued strategy, which should make future results more predictable, make us independent of fluctuations in the economy, and result in stable and higher profitability,′ said Roman Szwed, CEO of Atende S.A.