Revenues up, profitability down
- As in the first half of 2021, in 1H 2022 NTT System again generated record high results. Half-year revenues for the first time in history exceeded PLN 0.5 billion (PLN 595 million).
- The most important segment of the Company remains the distribution of components, accessories, peripherals and consumer electronics (revenues amounted to a record high PLN 411.4 million). The share of this segment increased by 4.1 pp. yoy and currently accounts for 69% of revenues (64.9% in the previous year).
- The company has increased its already high sales dynamics in the segment of own-produced and processed products (an increase of 252.3% yoy in 1H 2022). The revenues of this segment amounted to PLN 80.6 million (the highest level in history).
- The revenues increase positively impacted an increase in profits, but their growth at some levels turned out to be lower than the growth of revenues.
- The company generated gross profit on sales of PLN 62.9 million (increase by 14.1% yoy), operating profit of PLN 15.7 million (increase by 48.2% yoy) and net profit of PLN 9.1 million (increase by 8.4% yoy).
- As a consequence, the gross profitability on sales decreased to 5.7% (6.5% in the previous year), and the net profitability decreased to 1.5% (1.8% in the previous year).
- The decline in profitability at the level of net profit resulted from over 5 times greater financial costs (due to interest on factoring) than in the previous year.
- Finally we lower our target price from PLN 7.9 (May 2022) to PLN 7.0, mainly due to: weaker prospects for future results (expected economic slowdown, high interest rates, low exchange rate), an increase in the discount rate and a multipliers decrease of comparable companies.
Analysts Åukasz Bryl Tel.: 785 500 874
This report was prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. This is a translation of the Polish analytical report.
GPW’s Analytical Coverage Support Programme 3.0
