ASBIS Group in Q4 2014: significantly increased net profit after tax despite market turbulence in Russia and Ukraine

February 26, 2015

financial results, press-release

ASBIS Group in Q4 2014: significantly increased net profit after tax despite market turbulence in Russia and Ukraine

ASBIS significantly improved its net profitability in Q4 2014 compared to all previous quarters of 2014 and to Q4 2013

Limassol, Cyprus, February 26th, 2015 - ASBISc Enterprises Plc, a leading distributor of IT products in the emerging markets of Europe, the Middle East and Africa, significantly improved its net profitability in Q4 2014 compared to all previous quarters of 2014 and to Q4 2013. NPAT for Q4 2014 was USD 5.31 million, compared to USD 494k in Q3 2014 and USD 4.95 million in Q4 2013. Improved profitability was achieved despite turbulence in Russia and Ukraine, resulting in decreased revenues. Revenues in Q4 2014 were USD 458.59 million and grew compared to USD 388.66 million in Q3 2014 but decreased by 20.07% compared to USD 573.71 million in Q4 2013. Even though sales and gross profit declined, the Company improved its profitability due to lower selling and admin expenses and effective FX hedging. Selling expenses in Q4 2014 were reduced by more than USD 6 million, or 39.05%, compared to Q4 2013. Admin expenses decreased by USD 1.7 million, or 20.63%.

For the twelve months of 2014, the Group’s revenues were USD 1.55 billion, in the mid-range of the Company’s forecast for Y2014, which assumed sales between USD 1.45 billion and 1.60 billion. NPAT for Q1-Q4 2014 was USD 979k, which is close to the lower range of the forecast value (from USD 1 million to 2 million). This may be considered satisfactory considering the H1 2014 losses.

The Company anticipates a continuation of the unfavourable market conditions in Russia and Ukraine, and therefore further development of sales in the CEE and WE regions will be its main focus. The Company’s management plan further reductions in selling, admin and financial expenses for 2015, anticipating that it will be another tough year.

Siarhei Kostevitch, CEO and Chairman of ASBISc Enterprises Plc, commented: “Having in mind how tough market conditions are these days, we consider the Q4 2014 results a great achievement. Not only have we produced a significant net profit, but we have also successfully cut costs. First and foremost, we improved cash flow from operations by more than USD 70 million and closed the year with a significant increase in cash.”

Kostevitch continued: “At this moment in time, we do not expect the markets in Russia or Ukraine to get any better in the following 6–7 months. Therefore, we plan to increase sales and profits in other geographies that we started to develop in 2014 to replace sales lost in the FSU region. In order to do so, we will continue cost reductions on one hand and work on increasing margins on the other. This dual task is not easy, but as the Q4 2014 results show, it is feasible. Currently we are re-scaling the Company and considering announcing a Y2015 financial forecast in May.”  


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Q4 2013

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Q1Q4 2014

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For 2014, ASBIS forecast revenues between USD 1.45 billion and USD 1.60 billion and NPAT from USD 1.0 million to USD 2.0 million. After a strong Q4 2014, these forecasts were met at the level of sales, as revenues were generated in the middle of the forecast range. Meanwhile, net profit after tax was achieved very close to the lower end of the forecast range.

A country-by-country analysis of revenues confirms that the main decrease in sales was noted in the markets directly affected by the political crisis in Ukraine. Similarly to previous quarters of 2014, the decrease in Ukraine was the most dramatic, with the Company’s sales in this country down by about 70%.

However, lower sales in Russia and Ukraine were partially replaced by much higher revenues in the WE and CEE regions. Sales in the United Kingdom grew by an impressive 184.09%, Poland 145.76% and Romania 32.07%. ASBIS also generated a significant increase in revenues of 91.39% in Kazakhstan based on sales of smartphones (own brands and iPhones). Sales in Slovakia decreased by 19.60%, but this was mostly related to abandoning low-margin trading while focusing on more profitable lines. The Company expects further growth in all of these geographies in 2015, to substitute for lost business in Russia and Ukraine.




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Starting from February 2014, the Company’s revenues were under serious pressure from the turbulence in Ukraine that affected a number of nearby countries. This affected revenues of almost all product lines the Group carries. A positive response to the Group’s efforts to weather this crisis was visible in the second half of the year. ASBIS remains the distributor of choice for many worldwide suppliers. An excellent example is Apple, which has entrusted an iPhone distributorship to ASBIS for Ukraine and Kazakhstan as well.

For Q1-Q4 2014 compared to Q1-Q4 2013, revenues from all main product lines decreased due to market turbulence. The smallest decrease was for CPUs, while tablets and laptops suffered the most.

Revenues from own brands business decreased in Q4 2014 compared to Q4 2013 by 46.94% and the share of own brands business in total revenues in Q4 2014 decreased to 18.81%, from 28.33% in Q4 2013. In Q1-Q4 2014 own brands business decreased to 22.54% of total revenues, as compared to 24.42% in Q1-Q4 2013. The Company’s intention is to continue growing its own brand sales to a level where they bring a healthy gross profit margin and cash flow. The Company does not expect its own brands sales to grow in 2015.

Revenues from smartphone sales increased by 29.65% in Q4 2014 compared to Q4 2013 and, as a result, their share in total sales grew significantly, from 13.77% to 22.34%. However, in Q1-4 2014, sales in this segment decreased by 14.49% compared to Q1-Q4 2013. The increase in Q4 mostly related to iPhone distribution in Kazakhstan and other territories.

Revenue from tablet sales decreased by 47.50% in Q4 2014 and by 35.30% in Q1-Q4 2014 compared to the corresponding periods of 2013. This was connected with lower sales in Ukraine and Russia and marginal growth noted in this market segment due to saturation and stronger competition. During the period there was a significant decrease in the average selling price of tablets.


For additional information, please contact:

Daniel Kordel, ASBISc Enterprises PLC, Investor Relations
Tel. +357 99 633 793
Tel. +48 509 020 021

Costas Tziamalis, ASBISc Enterprises PLC, Investor Relations
Tel. +357 25 857 000

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 (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, employs more than 1,400 people and supplies 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 or 

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