Comarch – Financial Results for Q4 2017

The Comarch Group published its consolidated financial results for the four quarters of 2017 year. Within 12 months Comarch's sales revenues amounted to PLN 1.1b and were PLN 11.2m lower than in the equivalent period last year. Net profit attributable to shareholders of the parent entity amounted to PLN 43.1m and was PLN 29.9m lower than in 2016, and the operating result amounted to PLN 34.5m, i.e. PLN 82.4m lower than in the year before. The Group generated EBITDA of PLN 98.6m.

The revenue from sales for Q4 2017 stood at PLN 350m. Operating result was PLN 31.6m. Net result amounted to PLN 35.9m. Comarch increased its workforce. As at 31 December 2017, the Comarch Group was employing 5,542 people, i.e. 45 people more than at the end of 2016.

The Comarch Group operates in 60 counters worldwide and its financial results are affected by the economic situation in Poland and also by global developments. Almost 60% of the revenues are generated by Comarch on foreign markets.

“The financial result of the Group was largely affected by foreign exchange losses related to the material appreciation of the Polish zloty against certain foreign currencies and to the continued stagnation in the public procurement market from the administration and health care sectors. We also experience a wage pressure which significantly increases the operating expenses. Although the financial results were lower than in the previous year, Comarch’s financial condition is still very good and guarantees safe operation in the case of a changing macroeconomic situation in Poland and globally. The Group deliberately incurs the costs of development of new products and new activity segments, as well as the costs of developing operations on new foreign markets, mainly in Asia and South America, thus investing into the development of a competitive advantage in the future” saysKonrad Tarański, Vice-President of the Management Board and Chief Financial Officer at Comarch.

The largest increase in the sales revenue in 2017 was noted in the financial and banking sector customers. Winning new contracts on the Polish and foreign market resulted in the increase of revenues from the sales of solutions in twelve months by PLN 21.9m, or 13.4%. Comarch’s sales to the sector of small and medium-sized enterprises (SMEs) in Poland was developing very well due to the sale of ERP systems, as a result of which the sales revenue grew amounting to PLN 19.4m, i.e. 16.6%. The next largest part of the Group's revenue is accounted for by the TMT sector, despite a decline in the sales when compared to 2016 which was due to a lower number of contracts implemented in countries of Western Europe. There was a decrease in the sales to customers in the sector of industry and utilities (by PLN 4.3m, i.e. by 2.9%) and trade and services (by PLN 9m, i.e. by 4.9%). Despite of certain improvement in the situation in Q4 2017, there was stagnation in public procurement market throughout the whole year. Revenues from the sales to customers in the public sector increased by PLN 9.5m, i.e. by 13.1%. Revenues from the sales to customers in the medical sector increased by PLN 2.8m, i.e. by 21.5%.

“One of the important elements of Comarch’s business strategy is the development of new technologies and business areas, especially of the Internet of Things and medicine. We continue to develop our IT products for medical facilities and we hope that as soon as EU funds from a new perspective are made available, this business sector will start to be profitable. But we don’t focus on the Polish market only. Pursuant to the geographic diversification of Comarch’s business activity, we expand our e-health offer beyond Poland, carrying out projects in Germany and winning contracts in Italy and countries in the Caucasus – adds Konrad Tarański.

In 2017, Comarch completed its investments started in previous years to expand its own infrastructure. A new office building was commissioned in Łódź, the construction of SSE7 office building and a laboratory room and a production “IoT Lab” ended in Kraków, and another Data Centre will be soon commissioned in Lille.