During 9M 2022, Span recorded an increase in revenue of 11% YoY, EBITDA after one-off items increase of 38%, and a net profit after one-off items of HRK 39.4m, an increase of 162% YoY.
The total consolidated revenue of Span increased by 11% (or HRK 66.1m) YoY. Of this, operating revenue grew by HRK 65.5m, of which revenues in the segment of IT services with high added value increased by HRK 73.1m, whereas revenues in the segment of software asset management and licensing recorded a decline of HRK 7.6m. The decline in revenues comes from the fall of revenue in the Ukrainian market given that Microsoft has enabled Span’s users in Ukraine the use of its products and services without compensation, in the period from 1st April until 12th December 2022.
Breaking the revenue down into segments, the largest absolute increase was recorded by Infrastructure Services, Cloud & Cyber Security, which increased by HRK 32.6m, or 56% YoY. Following them, we have Service Center Management and Technical Support, which increased by HRK 22.1m, or 32%, and Software and Business Solution Development, which increased by HRK 18.3m, or 66% YoY.
Meanwhile, OPEX grew by HRK 41.6m (or 7% YoY) and amounted to HRK 601.7m. Of this, Staff costs increased the most, by HRK 42.8m, or 45% YoY. This came as a result of a higher number of employees and one-off expenses arising from the allocation of shares to employees in Ekobit. Furthermore, the growth in staff expenses follows an increase in revenues in the segment of IT services with high-added value. The average number of employees in the 9M 2022 amounted to 676, which is an increase of 28%, or 149 new employees YoY. COGS decreased by 3% of HRK 11.1m, mainly as a result of lower COGS in the Ukrainian market, whereas other members of Span Group recorded an increase in direct costs due to higher revenues. Finally, other op. expenses increased by HRK 5.9m, mainly as a result of higher business activities and a higher number of employees.
EBITDA after one-off items increased significantly, growing by HRK 10.5m or 38% YoY, mainly as a result of higher revenue from IT services with high-added value. The one-off items relate to the expenses arising from the Plan for the allocation of shares to Ekobit employees, OPEX derived from the acquisition, as well as reserved expenses for the ESOP program for the allocation of shares to employees. The net financial result amounted to HRK 4.9m, an increase of almost 5x YoY. However, this does include an HRK 2.3m one-off item relating to the acquisition of Ekobit. This came as a result of a positive difference in the prices of own shares of Ekobit, i.e., a difference in the prices at which Span purchased them and Ekobit acquired them in 2017. This would mean that the net profit after one-off items amounted to HRK 39.4m, an increase of 162% YoY, or HRK 24.3m.
Span key financials (9M 2022 vs. 9M 2021, HRKm)
Source: Span, InterCapital Research
*After one-off items
Moving on to the balance sheet, the total assets of Span on 30 September 2022 amounted to HRK 486.1m, an increase of 38.3% or HRK 134.5m YoY. This was mainly driven by growth in the current assets, which increased by 147% YoY (or HRK 129.4m) and amounted to HRK 217.2m. This in turn came mainly as a result of an increase in short-term receivables as a result of the business operations of the Group during the year. Fixed assets also increased, growing by 39.2% (or HRK 34.2m), mainly as a result of the goodwill from Ekobit in the amount of HRK 27.9m.
On the other hand, liabilities growth was driven by the increase in current liabilities, which increased by 93% YoY (or HRK 99.1m) to HRK 205.6m. This came as a result of an increase in liabilities toward suppliers, short-term liabilities to employees, and short-term liabilities for the purchase of the business share of Ekobit.
Span also commented on the results of its subsidiary TOV Span Ukraine. The revenue decreased by 78% YoY and amounted to HRK 28.1m. The revenues of TOV Span account for 4% of the total revenues of Span Group in 9M 2022. EBITDA was negative at HRK 1.4m, which is an improvement of 43% YoY. Meanwhile, the net loss amounted to HRK 2.96m, a decline of 290% YoY. If you would like to read the full report, click here.
