Its consolidated revenue stood at RON111 million in Jan-Sept 2022, up 35% year-over-year, and its operating profit reached RON3.5 million, up 9% on the year.
“The effects of 2022 can be seen in any field and, when it comes to our business, it impacted mostly the Technology Division, amid longer supply chain delays. From our estimates, supply chain delays will continue in the next 18-24 months. Based on these estimates, we decided to revaluate our portfolio of services and products to diversify the solutions we provide, paying more attention to software solutions – where there are no delays in delivery,” said Mihai Logofatu, CEO and co-founder of Bittnet Group.
By business segments, the Technology Division, represented by Dendrio, Optimizor (formely IT Prepared), Elian, Nenos, Nonlinear, FORT (a new entity formed of GRX and ISEC), reported revenue of RON95.5 million, up 29% from the third quarter of 2021.
The gross margin generated at division level was almost RON20 million at the end of the first nine months of 2022, up 45% on the year, amid an increased share held by services with high added value in the revenues of the division.
The Technology Division reported operating profit of RON4.7 million, comparable to the same period last year, as a result of the significant increase in rental costs (with the start of the contract for the new premises, but also due to the expansion of the team), as per data from company officials.
For the Education Division, which includes Bittnet Training, Equatorial, Computer Learning Center (CLC) and The eLearning Company, the third quarter of 2022 maintained the positive growth trend we have had since the beginning of the year. Thus, even if in the summer months the contracting and implementation of trainings slows down compared to the other months of the year, the company managed to secure a turnover value (projects won – delivered or in process of delivery as of 30.09 – CLOSED WON) of about RON18 million, a significant increase from last year.
From a financial point of view, the evolution of the Education Division for the nine months ended on September 30, 2021 reflects a doubling of revenues generated from current activity (but also an increase in costs, especially those with the team). The gross margin increased during this period by 55% compared to the same period last year, from RON4 million to RON6.4 million.
As in the past, the operating profit remains negative (at the level of Q3), even if the situation is 18% better than the previous year, mostly due to the increase in administrative costs (with the start of the lease contract for the new headquarters from ONE Controceni, during 2022).
“At the time of publication of this report, the integration of the two companies within the group is in full process. By the end of the year, ERP and other ‘tools’ used at group level will be implemented, both in terms of sales process, operational flows, and financial-accounting consolidation. We will be able to consider the 2 companies fully integrated only at the beginning of 2023. Also, a number of processes that used to operate at company level will be coordinated from division level – so we will have integrated Marketing, Sales Development (SDR – market prospecting) or Customer Success functions at division level. In this way we aim to establish best practices across all companies but also to increase the efficiency of the whole team. In Q3, the financial results of TopTech and 2NET are not consolidated, at a P&L level, in the financial results of Dendrio, or of the Group,” said Cristian Logofatu, co-founder of Bittnet Group.
Logofatu added: “In Q3 we completed two significant transactions: the acquisition of TopTech and 2Net. As a novelty, this is the first time we have financed the acquisition of other companies through a bank loan. In parallel, we advanced the negotiation processes for other transactions that are still in the pipeline. If only one of these transactions is successfully completed, we will start 2023 with a capacity of over RON300 million to generate business. We are still looking for transactions that will allow us to strengthen our presence both in the classic IT&C integration business and in the managed services area.
In September 2022, Bittnet Group said investment fund Agista exceeded the 5% ownership threshold in the shareholding structure, individually, and overshot the 15% threshold jointly with Impetum Investments and several people in the management of the two investment vehicles.