ASBIS Results in Q4 2016: increased gross profit margin and controlled expenses allowed increase in Q4 2016 NPAT by 29.23% year-on-year despite flat revenues.
2016 net result y-o-y improvement exceeds U.S.$ 21 million, reaching U.S.$ 4,636 and delivering the forecast. Further improvement expected in 2017.
ASBISc Enterprises Plc, a leading distributor of IT products in the emerging markets of Europe, the Middle East and Africa, continued its upward trend in results for both Q4 and 12M 2016. The Group continued its strategy to focus on improving its margins, while keeping expenses under control. While revenues in Q4 2016 were 0.71% y-o-y, gross profit margin grew to 5.81% from 4.94%. As a result, gross profit grew by 16.70% to U.S.$ 21,171 from U.S.$ 18,140. As expenses remained under control, EBITDA grew by 20.73% to U.S.$ 8,452 in Q4 2016 as compared to U.S.$ 7,001 in Q4 2015. Net profit after tax in Q4 2016 amounted to U.S.$ 2,635 as compared to 2,039 in Q4 2015 showing a 29.23% improvement.
Strong Q4 helped improve 2016 results and achieve the financial forecast. For the twelve months of 2016 revenues were 3.72% lower year-on-year, while gross profit grew by 40.23% to U.S.$ 65,414 from U.S.$ 46,649. This coupled with a strict control on expenses resulted in an improvement exceeding U.S.$ 21,5 million on the net income level. For the 12M of 2016 the Company posted a net profit after tax of U.S.$ 4,636, compared to a loss of U.S.$ 17,152 in the 12M of 2015.
Siarhei Kostevitch, CEO and Chairman of ASBISc Enterprises Plc, commented: “Q4 2016 was another quarter of continuation of the upward trend that the Company started back in 2015. Since we decided not to go for any low margin business, revenues were flat year-on-year. Gross profit margin grew and expenses remained under control. Thus, we not only improved the net result but also decreased the net debt position and turned cash from operations into positive. We consider this as a big leverage to continue the upward trend in 2017 and also return to dividend payment for our shareholders.”
FINANCIAL RESULTS IN Q4 2016 AND Q4 2015 (USD ’000)
Q4 2016 | Q4 2015 | Change Q4/Q4 | |
Revenue | 364,242 | 366,846 | -0.71% |
Gross profit | 21,171 | 18,140 | +16.70% |
Gross profit margin | 5.81% | 4.94% | +17.54% |
Administrative expenses | (4,173) | (4,317) | -3.34% |
Selling expenses | (9,104) | (7,483) | +21.67% |
Profit from operations | 7,894 | 6,341 | +24.50% |
EBITDA | 8,452 | 7,001 | +20.73% |
Profit after taxation | 2,635 | 2,039 | +29.23% |
FINANCIAL RESULTS IN 12M 2016 AND 12M 2015 (USD ’000)
12M 2016 | 12M 2015 | Change y-o-y | |
Revenue | 1,137,709 | 1,181,613 | -3.72% |
Gross profit | 65,414 | 46,649 | +40.23% |
Gross profit margin | 5.75% | 3.95% | +45.64% |
Administrative expenses | (16,339) | (19,075) | -14.34% |
Selling expenses | (28,838) | (30,630) | -5.85% |
Profit from operations | 20,237 | (3,056) | NA |
EBITDA | 22,381 | (482) | NA |
Profit after taxation | 4,636 | (17,158) | NA |
DETAILED INFORMATION ON SALES PROFILE
Following an improved performance of the F.S.U. region in Q4 2016, it regained the number one position in the sales structure after an impressive 40.72% growth year-on-year. The F.S.U. share in our total revenues grew to 42.23% in Q4 2016 from 32.12% in Q4 2015. Revenues derived from the F.S.U. region in Q1-Q4 2016 were higher by 18.29% year-on-year.
As we have focused on financing the growth in the F.S.U. region, our sales in other regions remained under pressure. Sales in the Central and Eastern Europe region have decreased by 23.59% and 18.85% in Q4 2016 and Q1-Q4 2016 respectively, as compared to the corresponding periods of 2015. Sales in Western Europe in Q4 2016 decreased by 20.70% compared to Q4 2015, while in Q1-Q4 2016 they grew by 6.88%. Sales in MEA region have decreased by 6.52% and 0.28% over the same periods.
Country-by-country analysis explains why results in the F.S.U. region improved so significantly. These followed a continuous improvement in Ukraine that grew by 108.31% in Q4 and by 144.13% in Q1-Q4 2016 as compared to the corresponding periods of 2015. Our business in Russia decreased by 7.06% and 4.97% in Q4 2016 and Q1-Q4 2016 respectively. The decrease in Russia was compensated by a strong growth in Kazakhstan and Belarus. Kazakhstan grew by 115.57% and decreased by 12.57% in Q4 2016 and Q1-Q4 2016 respectively as compared to the corresponding periods of 2015. Belarus grew by 17.62% in Q4 2016 and by 20.84% in Q1-Q4 2016.
In CEE region, sales in Slovakia decreased by 38.60% in Q4 2016 (and by 27.68% in Q1-Q4 2016) while our business in the Czech Republic grew by 7.97% and 17.87% over the same periods. The Slovakian decrease had solely to do with the huge fulfilment of projects during 2015, when Slovakia enjoyed a large EU funding for IT infrastructure. ASBIS Slovakia remains a leader in its segment and continues to dominate the local IT distribution market. As a result, Russia has regained its number one position in terms of sales in Q4 2016 (similarly to Q3 2016).
Region | Q4 2016 | Q4 2015 | Change Q4/Q4 |
Former Soviet Union | 153,830 | 117,847 | +30.53% |
Central and Eastern Europe | 129,377 | 169,327 | -23.59% |
Middle East and Africa | 48,695 | 45,673 | +6.62% |
Western Europe | 29,588 | 25,961 | +13.97% |
Other | 2,752 | 8,038 | -65.77% |
Total | 364,242 | 366,846 | -0.71% |
Region | Q1-Q4 2016 | Q1-Q4 2015 | Change (%) |
Former Soviet Union | 445,082 | 376,266 | +18.29% |
Central and Eastern Europe | 426,067 | 525,044 | -18.85% |
Middle East and Africa | 168,018 | 168,489 | -0.28% |
Western Europe | 69,775 | 65,286 | +6.88% |
Other | 28,767 | 46,528 | -38.17% |
Grand Total | 1,137,709 | 1,181,613 | -3.72% |
Revenues from CPUs, that traditionally lead in our revenue breakdown by product line, decreased by 17.34% in Q4 2016 and by 5.81% in Q1-Q4 2016. Revenues from HDDs decreased by 30.29% and 11.52% over the same periods. Laptop sales decreased by 22.49% and 11.83% respectively. On the other hand, our smartphones segment increased in Q4 2016 by 69.66% year-on-year (mostly following an improvement in iPhone sales) and by 19.04% in Q1-Q4 2016 year-on-year. This was again our number one segment in the product portfolio for Q4 2016. This was also partially due to the introduction of iPhone 7 by Apple which was highly demanded.
From other product lines, the most important is the increase in SSD business that built from zero to U.S.$ 6,203 in Q2, U.S.$ 9,859 in Q3 2016 and U.S.$ 16,054 in Q4 2016. We expect this segment to continue to grow rapidly in the forthcoming quarters.
For additional information, please contact:
Daniel Kordel, ASBISc Enterprises PLC, Investor Relations
Tel. +357 99 633 793
E-mail d.kordel@asbis.com
Costas Tziamalis, ASBISc Enterprises PLC, Investor Relations
Tel. +357 25 857 000
E-mail costas@asbis.com
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 60 countries worldwide. The Group distributes products of many vendors, and manufactures and sells private-label products: Prestigio (smartphones, tablets, external storage, leather-coated USB accessories, GPS devices, Car-DVRs, MultiBoards etc.) and Canyon (MP3 players, networking products and other peripheral devices). ASBIS has subsidiaries in 26 countries, about 1,100 employees and 32,000 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, also visit the company’s website at www.asbis.com or investor.asbis.com
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