Very good results for Atende Group in 2016
In 2016, the Atende Group recorded excellent results in spite of the adverse market environment. The Group’s gross profit on sales increased by 11%, while its net profit amounted to PLN 10.6 million and was slightly higher than in the previous year. - The year 2016 showed our strength in challenging market conditions. The visible increase in profitability ensured good results with regard to profit generated, despite a visible drop in revenue — said Roman Szwed, President of the Management Board of Atende S.A.
In 2016, the average percentage margin on sales in the parent company amounted to 30.6% vs 21.9% in the previous year, while in subsidiaries it amounted to 79.4% and 65.1% respectively. Consolidated sales revenue amounted to PLN 211 million, which represents a decrease by 19% as compared with the previous year, primarily due to a collapse in public sector orders (decline in revenue by 55% y/y). However, this decline was offset by the increased scale of the Group’s activities in other market sectors, in particular in the market for telecommunications operators and media. In this key market for the Issuer, the sales revenue for 2016 was higher than in the previous year by 24%.
- The Atende Group has unique competences in combining technologies of global leaders with innovative proprietary products. The market values these competences. In the products that Atende S.A. offers for telecommunications operators and media, these include primarily competences related to expansion of LTE data transmission infrastructure and with IP settlement and billing services. Atende Software, on the other hand, offers the highest-quality multimedia content distribution services — explained President Roman Szwed. According to the Group’s development strategy for the next two years, adopted in March 2016, the Issuer puts consistent emphasis on the increase of share of sales of subscription services. - Our biggest achievements in 2016 include successful development of sales of subscription services, carried out both in Atende S.A. and in the Capital Group companies — said Roman Szwed.
As compared to the previous year, revenue from subscription services increased by 50% (to PLN 55.8 million), while margins on these services increased by 47% (to PLN 38.5 million). The level of coverage of all overhead costs of the Group by predictable repetitive service margins was increased from 39% to more than 50%.
In 2016, the share of subsidiaries’ products and services in the Group’s sales increased from 16.8% to 18.9% y/y. This result was due mainly due to the aforementioned sale of multimedia content distribution services by Atende Software (increase of sales revenue by 42% y/y) and Sputnik Software’s activity associated with software for public authorities (despite the absence of public tenders in 2016, the company’s sales revenue increased by 16%, owing among other things to the takeover of a part of the market from Signity S.A. in mid-2015, together with the acquisition of economic copyright to software specially designed for local government units). An increase in sales by 11% y/y in 2016 was also recorded by TrustIT, a company that provides IT outsourcing services.
The unfavorable market environment, marked by an absence of tenders in the public sector, had an adverse effect on sales results in the medical and energy sectors. Atende Medica’s revenue decreased by 66% y/y, as a result of the absence of implementations of the medical system in hospitals, and amounted to PLN 1,796 000. Revenue from activities related to smart grids (Atende Software) and to software for smart meters and concentrators (operating system for the Internet of Things developed by Phoneix Systems) was lower in 2016 than in the previous year by, respectively, 49% and 30%, due to reduced activity of energy sector companies. Reduction in orders in the energy sector also affected the performance of Energy Data Lab, a company that specialises in advanced analysis of large amounts of data, i.e. in the Big Data technology, for clients from the energy sector.
- In 2017, the situation should improve following the release of EU aid and the observed activity in the area of public procurement. Regardless of that, we will double our efforts to build the Group’s position in alternative market sectors, with particular focus on the financial sector — the President of Atende S.A. summed up — In our opinion, the first year of its implementation is successful. We plan to continue our current practice of the development of new, innovative products and services, and to further strengthen the measures taken to consolidate the Group and to expand into foreign markets. We also intend to uphold the current practice of paying attractive dividends — he added.