Strong Q1'23 Results Drive Positive Momentum for the Company
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- The company published its Q1'23 results on Tuesday before the trading session. A results conference call with management is scheduled for Thursday (12:00).
- Q1'23 revenue amounted to PLN 97.5m (+86% y/y), slightly above our expectations.
- On a standalone basis, the Installations segment (which accounts for the contract at the Belarusian border) generated revenue of PLN 54m (vs. PLN 157m in Q4'22 and PLN 14m in Q1'22). After Q4'22, we estimated that about PLN 90m of revenue remained from the border contract to be recognized in 2023, and we tentatively estimate that more than half of that value could remain after Q1'23. The current expected completion date for the contract is June 2023.
- Gross margin (15.1%) significantly higher y/y and above our assumptions.
- SG&A costs as much as 2% higher y/y.
- Impact of other operating activities negative in Q1'23 (PLN -1.5m).EBITDA amounted to PLN 8.6m in Q1'23 (vs. PLN -3.1m a year ago). A much better result than we had anticipated (we expected PLN 3.5m).
- Financial activities slightly positive at PLN +0.3m.
- Q1'23 net profit at PLN 5.8m (effective tax rate at 26%), we expected PLN 1.9m.
- Cash flows from operations amounted to PLN +9m in Q1'23. Prepayments at PLN 16m (down sharply vs. Q4'22 - settlement of prepayments on a border contract).
- The company had PLN 60m in net cash at the end of the period.
- Backlog: PLN 618m (vs. PLN 558m after Q4'22 and PLN 598m a year ago).
BDM Comment:
The company's Q1'23 results were above our forecasts. The main reason for this was the gross margin, which was very high for Q1. At the end of Q1'23, the company recorded a very good cash position, which even increased compared to Q4'22. The contract on the barrier on the border with Belarus will still have an impact on Q2'23 results, at the same time the company has a significant portfolio in other areas as well (the portfolio is now even marginally larger than a year ago). An earnings conference call with management is scheduled for Thursday (12:00).
