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June 30, 2022
BUSINESS COMPANIES ECONOMY

Bittnet Group posts consolidated revenues of 33.1 million lei in the first quarter of 2022, an increase of 62%

Bittnet (BNET), a group of IT companies listed on the Main Market of the Bucharest Stock Exchange, posts consolidated revenues of 33.1 million lei in the first quarter of 2022, a 62% increase compared to the same period last year and a gross margin of 6.5 million lei, 2.5 million lei more than in 2021. Also, the operating result improved by 0.55 million lei, recording for the first time a value close to zero – minus 0.25 million lei.

If 2021 began under the sign of economic recovery both locally and internationally, in 2022, the military conflict in Ukraine marked a new moment of crisis, visible even on the capital markets. Thus, lately, we have noticed that the idea of “survival” has changed to “construction in the new reality,” which translates in practice into interest for digital reinvention occupying most of the time, especially in securing digital assets. Currently, at the Group level, we can say that we do not feel the new geopolitical crisis caused by the war in Ukraine; the demand for IT services and solutions is consistent at the level of each company. However, we operate in the post-pandemic context that marked the last two years, respectively, extended delivery times for hardware components, leading to a delay in the delivery of infrastructure services. In the results of Q1 2022, a significant contribution is made by the backlog type projects won and signed in 2021, but which delivery deadlines led to their completion in the first part of 2022. The results obtained in the first three months of the year strengthen our conviction regarding the revenue target of 500 million lei, which we aim to reach by the end of 2024,” stated Mihai Logofătu, CEO and co-founder of Bittnet Group.

The Technology Division, represented by Dendrio, IT Prepared, Elian, Nenos, Nonlinear, ISEC, and GRX, posts revenues of 28.5 million lei, up approximately 60% compared to Q1 2021. Gross margin increased by 61% compared to the same period last year, amid the increased share of high value-added services in the division’s revenues. This led to a 133% increase in operating profit, to 0.66 million lei. During the analyzed period, there was a strong demand for all types of services offered by this division – implementing complex IT infrastructures, cybersecurity, managed services, business applications, and software and artificial intelligence applications. Therefore, in Q1 2022, a value of 9.4 million lei was registered at the level of services, an increase of 130% compared to Q1 2021.

Regarding the technology division, in the first three months of the year, the Group completed the negotiations for TopTech and 2Net Computer investments. Once the approval is obtained from the Competition Council, the two companies will join Dendrio in the Cloud & Infrastructure segment. Thus, Dendrio becomes an integrator with a revenue generation capacity of over 200 million lei per year, which has demonstrated over time that it can sustain a growth rate of over 20% per year in the medium-term. The company expects the two transactions to be completed in June, and the consolidated financial results will be available starting with Q3 2022.

The Education Division, which includes Bittnet Training, Equatorial, Computer Learning Center (CLC), and The eLearning Company, reached in Q1 2022 approximately 30% of the budget set for this year, which is the best start to a year in the company’s history. The division recorded sales of 4.6 million lei, increasing 120% compared to the same period last year. In the first three months of the year, 130 classes were delivered for a number of 1,114 students – an average of about 9 students/class. In parallel, the division continued to expand its product and service portfolio, adding a new vendor to its portfolio – EC Council.

2022 started well and motivated us to continue on the same path until its end. The increase in revenues reported in Q1 2022 is due to factors such as the delivery of the significant “backlog” recorded at the end of 2021 and the operational changes implemented in the last 18 months. First of all, such a change is visible in the education division, which generated the largest number of new clients attracted throughout a year – 35 companies. From an annualized perspective, the evolution of the results for the last 12 months is similar, which reconfirms our group’s ability to increase revenue and profitability. Thus, the consolidated revenues amount to 125 million lei, increasing by almost 16% compared to the previous period, and the gross margin to 26.9 million lei, a 32% increase. During this time, the operating profit had a positive evolution of 90%, reaching the value of 7.9 million lei,” stated Cristian Logofătu, co-founder of Bittnet Group.

During the first quarter of 2022, the company celebrated 15 years of existence and accelerated development, the first IT services company listed on the Bucharest Stock Exchange. In the seven years since its listing, Bittnet has had a CAGR of 45% in revenue, 57% in assets, 80% in equity, 100% in profit, and an average annual ROE of over 40%.

 

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