Bittnet Group post consolidated revenues of 111 million lei in the first nine months of 2022, a 35% increase
Bittnet (BNET), a Group of IT companies listed on the main market of the Bucharest Stock Exchange, post consolidated revenues of 111 million lei, a 35% increase compared to the same period last year, and a gross margin of 26.4 million lei, a 47% increase compared to the first nine months of 2021. Also, the operating profit reached the value of 3.5 million lei, a 9% appreciation compared to last year. In the first nine months of 2022, the group recorded a gross loss of 6.2 million lei compared to a profit of 4.6 million lei in 2021.
“2022 is a year that we can talk endlessly about how difficult it was and is in every way. Its effects can be seen in every industry, and at the level of our business, especially in the Technology Division, amid the increasing delays in the supply chain. From our estimates, these delays will continue for the next 18-24 months. Therefore, we have decided to reassess our services and product portfolio to diversify our solutions, with an increased focus on software solutions, where there are no delays in deliveries. Through the diversification of solutions, we target to complement the current portfolio with niche and recurring products and services, which will be marketed as a monthly or annual subscription, similar to what is available for most software solutions. Through this offensive approach, we reconfirm our position as a provider that responds instantly to client’s needs, offering them innovative solutions specialized in the market verticals in which they operate,” stated Mihai Logofatu, CEO and co-founder of Bittnet Group.
The Technology Division, represented by Dendrio, Optimizor (formerly IT Prepared), Elian, Nenos, Nonlinear, and FORT (new entity, consisting of GRX and ISEC), post revenues of 95.5 million lei, up 29% compared to Q3 2021. The gross margin, close to 20 million lei, increased by 45% compared to the same period last year amid the increased weight of services with high-added value in the division’s revenues. The increase in turnover is reflected in a more intense activity at the level of the delivery teams, with more than 2,000 projects implemented by the Technology Division in the first nine months of the year. The operating profit recorded at the level of this division is 4.7 million lei, similar to the same period last year, as a result of the significant increase in administrative costs related to the new headquarters, as well as due to the expansion of the team.
The Education Division, which includes Bittnet Training, Equatorial, Computer Learning Center (CLC), and The eLearning Company, has maintained a positive growth trend since the beginning of the year. Although during the summer months, the contracting and implementation of training slows down compared to the other months of the year, the Education Division recorded almost a doubling of income from the current activity, approximately 16 million lei. The gross margin increased during this period by 55% compared to the first nine months of 2021, from 4.1 million lei to 6.4 million lei. The operating result remains negative in the third quarter – 1.2 million lei loss versus 1.5 million lei last year, even if the result is 18% better than the previous year. The negative result is mainly due to the increase in the size of the business as well as the expansion of the teams within the division.
“At the end of September, we completed the TopTech and 2Net Computer transactions, and currently, the integration of the two companies within the group, at the level of the Technology Division, is in full swing. Therefore, the financial results of the two companies are not consolidated in the group’s financial results. The joining of the two companies in the Bittnet group opens up a complementary horizon of products, IT services, and clients, as well as it is increasing the presence of the Technology Division in new regions of Romania, where it had a reduced presence – the center, south, and southeast of Transylvania. In the long term, we estimate that they will generate revenues of at least 80 million lei per year. Currently, we are also in advanced discussions for other M&A transactions. If only one of these is successful, we will start 2023 with a capacity to generate a turnover of over 300 million lei. Our objective is to identify companies that will allow us to strengthen our presence both in the classic IT&C integration activity and in the managed services field“, stated Cristian Logofatu, co-founder of Bittnet Group.
In September, the group announced that the Agista investment fund exceeded the 5% shareholding threshold, individually and together with Impetum Investments and several people from the management of the two investment vehicles, the 15% threshold.
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About Bitnet Group
Bittnet was founded in 2007 by brothers Mihai and Cristian Logofatu as a training and IT solutions company in Romania and abroad. Today, Bittnet is a Group of IT&C companies that includes the following brands: Bittnet Training, Dendrio, FORT, ELIAN Solutions, Equatorial Gaming, The eLearning Company, ISEC Associates, Computer Learning Center, Nenos Software & Nonlinear, Optimizor, 2Net Computer and TopTech. Bittnet Group is listed on the Main Market of the Bucharest Stock Exchange under the symbol BNET.