Bittnet Group registers consolidated revenues of 99,8 million lei in 2019

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Bucharest, 21 February 2020 – Bittnet Group (BNET) published the preliminary financial results for the full fiscal year 2019. 2019 has been yet another year of growth for the Group, which registered a 100% increase in revenues compared to 2018, reaching 99,8 million lei in consolidated turnover. In line with the growing turnover, in the course of 2019, Bittnet shareholders have registered an increase in the value of the investment of over 57 million lei, as the company’s market capitalization grew by 90%.

At the consolidated level, operating profit increased in 2019 by 25% compared to 2018, up to 1.64 million lei, and the operating cash flow exceeded 5 million lei. 2019 has been a year of great growth at the revenues number but a mixed result when it comes to the profitability at an individual level.

Technology business line, which includes Dendrio and Elian, has been the largest contributor to the turnover growth, as the revenue of the line grew from 40.4 to 87.1 million lei. Out of that amount, in 2019, 4.7 million lei revenue came from Elian, alongside the net profit of 261,000 lei, which overall resulted in an increase of 20% of revenues and 31% of net profit compared to the 2018 result for the ERP provider. The remaining revenue has been generated by Dendrio, which because of the weaker first half ended 2019 with a 3.6 million lei loss. The loss was caused by the fact that following the take-over of the IT&C integration division of Crescendo International on January 1st, 2019, Dendrio has registered 12 months of costs, but only 9 months of revenues as the teams were not focused on generating sales in Q1 2019 but integration of the respective teams. This hypothesis is further supported by the fact that in the second half of the year, Dendrio has generated a net profit of 1.2 million lei.

From the Education business line, Bittnet Training has registered revenues of 12.68 million lei while the operating profit of the company was 2 million lei (compared to a loss of 71,000 lei in 2018) and the gross profit was 792,000 lei, an increase of 1.7 million lei when compared to 2018.  Equatorial’s revenues overpassed 3 million lei in 2019 while the profit grew by 13%, from 217,000 lei to 247,000 lei. This means that Bittnet’s investment in Equatorial brought in 2019 a capital return of over 20%.

After a very strong second half of the year, where all four companies were profitable, at the consolidated level, the Group managed to recover part of the losses generated in the first half of the year. The 3 million lei consolidated loss at year end included primarily IFRS non-cash adjustments of almost 2 million lei.

With a good performance of the mother company, the management nonetheless will propose to the shareholders the allocation of the gross individual profit of Bittnet SA together with the profits retained from the past years in the form of free shares. The proposed allocation rate will be either 7 or 8 free shares for every 10 shares held.

„In 2019, solid foundations were built for a strong performance in 2020. The organizational alignment has been of fundamental importance in the first half of 2019 while in the second half of the year we have focused on developing new products. The educational division of Bittnet Group has launched in the fourth quarter of 2019, 4 products which are expected to bring first revenues in 2020 and have a potential of revolutionizing the overall turnover at the Group level”, said Mihai Logofatu, CEO and President of the Board.

In 2019, Bittnet’s shares were the 17th most traded stock on the Bucharest Stock Exchange, with an average daily value of transactions with BNET shares being 180,000 lei, which is over 20% of the total liquidity of AeRO market in 2019. Bittnet Group is currently in the process of transfer from the AeRO market to the Main Market of the Bucharest Stock Exchange.

On February 21st, Bittnet’s pre-emptive rights issue debuted on BVB’s Multilateral Trading System as 55,233,205 pre-emptive rights with ticker BNETR06 are tradable between February 21st and March 2nd. The pre-emptive rights were part of a share capital increase by issuing 11,046,641 ordinary shares, offered for subscription at a price of RON 0.83 per share, thus currently providing yield of 35%. After the trading period ends, the holders of BNETR06 rights will be able to subscribe to the new shares during the first stage of the increase, which will take place between March 5th and April 3rd. The subscription ratio is 5 preemptive rights for 1 new share.

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