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Asseco South Eastern Europe Group Q1 2014 financial results

Sales revenue of Asseco SEE Group reached EUR 23,7 million and was 2% lower than in  the last year. The highest growth in the first quarter of 2013 was reported by operations in Croatia and Romania, where revenues increased by 50% and 9% respectively, compared to the last year. Better results in Croatia were primarily the effect of consolidating sales by EŽ RAČUNALSTVO – a POS maintenance company acquired by ASEE in October 2013. Growth in Romania resulted mainly from new contracts realized by System Integration business unit.

“Despite unfavorable economic situation in the region and weakness of the local financial market, Asseco ASEE was able to maintain in the first quarter revenues comparable to those from a year ago. Recently signed contracts together with agreements we are negotiating at the moment give reasonable grounds for optimistic outlook on ASEE results in the remaining part of 2014” said Piotr Jeleński, CEO of Asseco South Eastern Europe Group.

The company consequently realizes its strategy to increase revenues from outsourcing, especially in Payment business unit where ATMs and POS terminals are outsourced to ASEE clients. Outsourcing brought EUR 3,2m of revenues in Q1’14 (growth by 48%) mainly due to the outsourcing contract signed with one of the leading banks in Croatia. The growth should continue since ASEE has recently announced signing a contract to outsource 12,5 thousand POS terminals to Banca Intesa in Serbia.

Operating profit (EBIT) decreased by 19% yoy and amounted to EUR 1,9 million. This is due to weaker results of the Banking business unit, primarily in Serbia, Romania, Croatia and Macedonia. Asseco SEE reported operating profit margin at the level of 8%.

“Lower results of Banking business unit in Q1’14 are primarily due to the fact that a few significant projects were completed at the end of 2013 and we did not start any big scale implementation in the first months of 2014. We already know ASEE will be working on significant banking contracts later this year what should translate into better results of this business unit in the following quarters” - added Piotr Jeleński.

According to Jeleński, one can see growing interest in new investments in the financial sector in the region, coming both from banks which were not present in the Balkans and from enterprises operating in other segments. New entrants are looking for sophisticated software solutions, often based on multichannel approach with high emphasis on mobile. It seems ASEE can benefit from this trend by winning new contracts and diversifying its current customer base.

Net profit reported by ASEE was 10% lower than last year and amounted to EUR 1,7m. Drop in net profit was proportionally smaller than in EBIT mainly due to lower withholding tax associated with less dividend payments received by the holding company. 

The company announced backlog value for the year 2014 - it currently amounts to EUR 72.7 million and is 8% higher than at the same time of the last year.

General shareholders’ meeting of ASEE which took place on April 24th approved distribution of 2013 net profit. 16,6m PLN will be paid to ASEE shareholders as dividend what translates into 0,32 PLN payment per share. Dividend rights will be determined on July 11th and transfers to shareholders are planned for July 30th.