ASBIS in H1 2010: Significant Increase in Revenues and Gross Profit but Results Affected by Steep Currency Movements
Press-release
Limassol, 11th August 2010 — ASBISc Enterprises Plc, a leading distributor of IT products in emerging markets of Europe, Middle East and Africa, posted revenues of USD 270 million for the second quarter of 2010, 16.6% higher than in Q2 2009. For the whole H1 2010 revenues grew even stronger, by 28% to USD 600 million from USD 469 million in H1 2009, while gross profit grew by 44.66% to USD 27.3 million compared to USD 18.9 million in H1 2009. These results represent ASBISC’s stronger market position, that enables the Company to benefit from reviving demand. Despite strong growth in sales and gross profit, ASBISc Q2 2010 results were adversely affected by the steep currency movements against the U.S. Dollar, the Group’s reporting currency. Net loss for the period was U.S.$ 1.9 million as opposed to U.S.$ 6.5 million for the corresponding period of 2009.
“We were able to increase our sales significantly in both Q1 and Q2 2010 compared to corresponding periods of 2009. This was possible mostly because of upgraded product portfolio and winning market share from weaker competitors in many countries of our operations. This resulted in increase of sales in all our major regions and countries. We have experienced strong increase in sales in some of our biggest markets like + 77.36% in Russia and +45.61% in Ukraine. On the other hand, the currency environment is still not favorable for us. Due to steep volatility of local currencies to U.S. Dollar and movements on USD/EUR pair, we were exposed to high currency risk. Adding the prudent bad debt provisions that we decided to recognize now in order to avoid such case later this year, it ended with USD 1.9 million loss for the H1 2010. It is still three times lower loss than in the corresponding period of 2009, but we are definitely not satisfied and determined to close 2010 profitable.”– commented Siarhei Kostevitch, CEO and Chairman of ASBISc Enterprises Plc.
Financial results in H1 2010 and H1 2009
| In USD thousands |
H1 2010 |
H1 2009 |
Change |
|
Revenues |
600,556 |
469,169 |
+28.00% |
|
Gross profit before currency movements |
31,325 |
23,094 |
+35.64% |
|
Currency movements on gross profit |
-4,033 |
-4,228 |
-4.61% |
|
Gross profit after currency movements |
27,291 |
18,886 |
+44.66% |
|
Gross profit margin before currency movements |
5,22% |
4,92% |
+6.10% |
|
Gross profit margin after currency movements |
4,54% |
4,02% |
+12.94% |
|
Administrative expenses |
-11,253 |
-10,925 |
+2.99% |
|
Selling expenses |
-15,256 |
-12,239 |
+24.65% |
|
Operating profit/loss |
783 |
-4,299 |
n/a |
|
EBITDA |
2,249 |
-2,866 |
n/a |
|
Net profit/loss |
-1,933 |
-6,520 |
n/a |
Summary of growth trend:
- Significant growth in revenues: +28% year-on-year growth in sales, mostly due to increased market position and upgraded product portfolio.
- Dynamic of revenue growth higher than dynamic of expenses
- Improved gross profit: Gross profit before currency movements in H1 2010 increased by 35.64% to U.S.$ 31,325 from U.S.$ 23,094 in the corresponding period of 2009. This was mostly due to upgraded product portfolio.
- Improved gross profit margin: Growth of gross profit margins both before (from 4,92% to 5,22%) and after (from 4,02% to 4,54%) currency movements
- Net result under influence of currency movements and provisions for doubtful debts, but 70% lower net loss despite similar y-o-y currency losses allows optimism about the whole year result
Detailed information on sales profile
Traditionally and throughout the last years of the Company’s operation, the region contributing the majority of revenues has been the Former Soviet Union. This changed temporarily in 2009, when Central and Eastern Europe region was less affected by the world’s financial crisis. However together with recovery of big markets like Russia and Ukraine, F.S.U. regained position number 1 in the Company’s structure of revenues in Q1 2010. This continued in Q2 2010 and was the case for the whole H1 2010 when revenues derived in F.S.U. countries grew by +70,75% compared to the corresponding period of 2009.
“Additionally, in H1 2010 we were able to increase revenues in all other major regions of our operations. Central and Eastern European countries revenues grew by 10.62%, Western Europe by 15.98% and the Middle East and Africa by 8.40% – confirming good performance shown even during the crisis times.” – commented Siarhei Kostevitch, CEO and Chairman of ASBISc Enterprises Plc.
Also country-by-country analysis confirms signs of recovery in ASBISc biggest markets. Sales in Russia grew by 77.36% and in Ukraine by 45.61%. All of this was possible because of a much enhanced product portfolio which was built during the very tough crisis times.
Revenue breakdown by regions in H1 2010 and H1 2009 (in USD thousands):
| Region |
H1 2010 |
H1 2009 |
Change % |
|
Former Soviet Union |
221,097 |
129,488 |
+70.75% |
|
Central and Eastern Europe and Baltic States |
202,590 |
183,138 |
+10.62% |
|
Middle East and Africa |
95,654 |
88,240 |
+8.40% |
|
Western Europe |
55,657 |
47,989 |
+15.98% |
|
Other |
25,559 |
20,314 |
+25.82% |
|
Grand Total |
600,556 |
469,169 |
+28% |
Revenue breakdown in H1 2010 and H1 2009 – (top 10 countries )
|
|
H1 2010 |
H1 2009 |
||
|
|
Country |
Sales |
Country |
Sales |
|
1. |
Russia |
127,805 |
Russia |
72,061 |
|
2. |
Slovakia |
69,864 |
Slovakia |
66,034 |
|
3. |
Ukraine |
60,116 |
Ukraine |
41,286 |
|
4. |
United Arab Emirates |
33,788 |
United Arab Emirates |
33,629 |
|
5. |
Czech Republic |
31,020 |
Czech Republic |
27,215 |
|
6. |
Saudi Arabia |
21,461 |
Poland |
18,737 |
|
7. |
Belarus |
20,973 |
Netherlands |
18,325 |
|
8. |
The Netherlands |
18,939 |
Turkey |
15,250 |
|
9. |
Turkey |
13,552 |
Germany |
13,873 |
|
10. |
Croatia |
13,190 |
Bulgaria |
12,982 |
|
11. |
Other |
189,850 |
Other |
149,778 |
|
|
Grand total |
600,556 |
Grand total |
469,169 |
Revenue structure by product lines in H1 2010 and H1 2009:
|
|
H1 2010 |
H1 2009 |
||
|
|
U.S. $ thousands |
% of revenues |
U.S. $ thousands |
% of revenues |
|
Central processing units (CPUs) |
129,176 |
21.51% |
125,524 |
26.75% |
|
Hard disk drives (HDDs) |
81,984 |
13.65% |
68,215 |
14.54% |
|
Software |
40,042 |
6.67% |
29,816 |
6.36% |
|
PC-mobile (laptops) |
129,832 |
21.62% |
83,765 |
17.85% |
|
Other |
219,522 |
36.55% |
161,850 |
34.5% |
|
Total revenue |
600,556 |
100% |
469,169 |
100% |
For additional information, please contact:
Mr Daniel Kordel, ASBISc Enterprises PLC, Investor Relations
Tel. +00 357 99 633 793
Tel. +48 509 020 021
E-mail: d.kordel@asbis.com
Mr Costas Tziamalis, ASBISc Enterprises PLC, Investor Relations
Tel. +00 357 25 857 000
E-mail: costas@asbis.com
Mrs. Iwona Mojsiuszko, M+G
Tel. +48 22 625 71 40,
Tel. +48 501 183 386
E-mail: iwona.mojsiuszko@mplusg.com.pl
ASBISc Enterprises Plc is based in Cyprus and specializes in the distribution of computer hardware and software, mobile solutions, IT components and peripherals, and a wide range of IT products and digital equipment. Established in 1990, the Company has a presence in Central and Eastern Europe, the Baltic States, the former Soviet Union, the Middle East, and North Africa, selling to 75 countries worldwide.
The Group distributes products of many vendors and manufactures and sells private-label products: Prestigio (external storage, leather-coated USB accessories, GPS devices, etc.) and Canyon (MP3 players, networking products and other peripheral devices).
ASBIS has subsidiaries in 26 countries, more than 1,000 employees and 30,000 customers.
The Company’s stock has been listed on the Warsaw Stock Exchange since October 2007 under the ticker symbol “ASB” (ASBIS).
For more information, visit also the company's website at www.asbis.com