Warsaw Stock Exchange: Analyst comment – SIMFABRIC Q4’22 RESULTS
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Last recommendation BDM: SELL with target price 7,5 PLN/share (2022/10/07) LINK
BDM Comment: SimFabric's results for 4Q'22 are below our expectations, which we perceive negatively. In the discussed quarter, the company generated PLN 0.9 million in product sales revenue (-68.4% y/y, +143.2% q/q). According to our estimates, they were generated from services related to creating e-learning materials and other developer services. Such a significant y/y decline in revenue results from a lack of payments for the production of publishing games (by the end of 2Q'22, the entire amount of 3.6 million EUR contracted for the production of three games was used up). In the discussed quarter, operating expenses amounted to PLN 6.7 million, of which PLN 5.2 million was related to write-offs updating the value of trade receivables. In 4Q'22, depreciation amounted to PLN 0.2 million (+3.6% q/q, -10.2% y/y), and external services amounted to PLN 1.3 million (+32.3% y/y, mostly related to development services) and were significantly higher than our expectations. In the last quarter of 2022, the company generated a negative EBITDA of 5.5 million PLN (compared to 1.9 million PLN in 4Q'21). Adjusted EBITDA for the amount of 5.2 million PLN related to updating the value of trade receivables amounted to - 0.4 million PLN. SimFabric recognized -0.4 million PLN at the financial activity level (mostly related to fair value measurement of investments). In Q4'22, SimFabric generated a net loss of PLN 6.4 million, of which PLN 6.3 million was attributable to the parent comapny. In the reported period,cash flows from operating activities amounted to PLN 3.9 million (of which PLN 9.4 million was a change in the state of receivables), cash flows from investing activities were -0.7 million PLN, and from financing activities -4.0 million PLN (relating to the net inflow from capital increase). At the end of December'22, the company had PLN 5.0 million in cash and cash equivalents (-0.9 million PLN q/q, -5.1 million PLN y/y). The company's trade receivables and other receivables decreased from PLN 13.2 million at the end of Q3'22 to PLN 7.8 million at the end of December'22 (PLN -5.4 million - write-offs: PLN 3.9 million related to write-offs of receivables overdue by more than a year from the due date, and PLN 1.4 million resulting from a 50% write-off of receivables overdue by more than half a year from the due date).
Q4’22 results [mln PLN]s
- In Q4'22, the company generated PLN 0.9 million in revenue from the sale of products (-68.4% y/y, +143.2% q/q). They were generated from the services of creating e-learning materials and other development services.
- The operating costs amounted to PLN 6.7 million, of which PLN 5.2 million was related to updates in the value of trade receivables. During the period under discussion, depreciation amounted to PLN 0.2 million (+3.6% q/q, -10.2% y/y), and external services reached PLN 1.3 million (+32.3% y/y, this item mostly relates to development services) and were significantly higher than our expectations.
- In Q4'22, the company generated a negative EBITDA of PLN 5.5 million (compared to PLN 1.9 million in Q4'21). Adjusted EBITDA for the amount of PLN 5.2 million related to updates in the value of trade receivables amounted to -0.4 million PLN.
- In the last quarter of 2022, the company recognized a loss of PLN 0.4 million from financial activities (mostly related to fair value adjustments of investments).
- In Q4'22, SimFabric generated a net loss of PLN 6.4 million, of which PLN 6.3 million was attributable to the parent comapny.
- Cash flows from operating activities in Q4'22 amounted to PLN 3.9 million (of which PLN 9.4 million was a change in the state of receivables), cash flows from investing activities were -0.7 million PLN, and from financing activities -4.0 million PLN (relating to the net inflow from capital increase). At the end December'22, the company had PLN 5.0 million in cash and cash equivalents (-0.9 million PLN q/q, -5.1 million PLN y/y).
- The company's intangible assets increased from PLN 6.9 million at the end of Q3'22 to PLN 7.6 million at the end of Q4'22 (of which PLN 6.5 million is computer games in progress, and PLN 1.1 million is computer games produced).
- The company's trade receivables and other receivables decreased from PLN 13.2 million at the end of Q3'22 to PLN 7.8 million at the end of December'22 (PLN -5.4 million - write-offs: PLN 3.9 million related to write-offs of receivables overdue by more than a year from the due date, and PLN 1.4 million resulting from a 50% write-off of receivables overdue by more than half a year from the due date).
- In 2022, the company generated PLN 6.2 million in revenues (-30.9% YoY). Three games accounted for 44.7%, or PLN 2.8 million (including games such as "Farm&Fix" and "House Designer"), while e-learning material production services accounted for 37.7%, or PLN 2.3 million. The remaining developer services amounted to PLN 1.1 million (17.5%).
- During 2022, the company generated PLN -2.3 million EBITDA, while the adjusted EBITDA amounted to PLN 2.8 million (- 37.1% YoY). The net loss attributable to the parent company was PLN 3.3 million.
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Analyst:
Krzysztof Tkocz
tel.: (+48) 516 086 705
