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Comarch’s financial results for Q1 2018

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The Comarch Group has published its consolidated financial results for Q1 2018. Revenues from the sale of software and own services amounted to PLN 272 M and was by PLN 17 M higher than in the equivalent period of 2017. Profit on operations amounted to PLN 0.6 M and EBITDA reached PLN 16.7 M.

Domestic and foreign sales increased. The largest part of the revenue, i.e. PLN 65 M was generated by sales of solutions for telecommunications operators (24% of the total revenues). The sales revenues for this group of recipients increased by 16.5% in relation to the first three months of 2017. The Group also noticed a major increase of sales revenues from systems for small and medium-sized enterprises in Poland. This year customers purchased products and services amounting to PLN 8.5 M (or by 30%) more than in the corresponding period of the previous year.

Improvement in the public segment

Revenues from the sale of systems for customers from the medical sector increased by over 170%. Due to winning new contracts, revenues from the sale of solutions for hospital computerisation amounted to PLN 9 M, i.e. by PLN 5.7 M more than in the first quarter of 2017. Situation in public procurement market was also improved. The sale of systems for public administration generated revenues of PLN 16.5 M, i.e. by 42% more than in the previous year.

However, revenues from sales to customers in the trade and services sector dropped by PLN 2.2 M, i.e. by 4.8%, and to industrial customers dropped by PLN 7.1 M, i.e. by 21.5%.

“The Group’s financial results were mainly affected by the improvement of situation in the telecommunications industry where we have won several customers, mainly from foreign markets, and business development in the small and medium enterprise segment in Poland. The public administration sector and medical sector have also significantly improved. The contracts for hospital computerisation that we had won result from a long-term development strategy for this business segment in the group and many years of investments in development of products for the e-health market. Thanks to this, now Comarch Healthcare, being the Group member, has a wide and innovative product portfolio, that is the basis of its business operations”, says Konrad Tarański, Vice President of the Management Board and Finance Director of Comarch.

Comarch’s financial results were also affected by the increase of operational costs. The basic salary fund increased by some 6% in the first three months of 2018 in relation to Q1 2017.
“We are aware that the job market in the IT sector is very competitive and wage pressure is huge. But Comarch’s financial position allowed for increase in wages and after thorough analyses we decided to raise wages”, explains Konrad Tarański.

R&D and own infrastructure

The main pillars of the Comarch Group’s business strategy is the development of its own products. A share of spending on research and development in the Comarch Group is growing steadily each year. Previously, it was 11 to 12% of revenues, now the expenditure exceeds 16%. Such activities allows the company for building a comprehensive offer and increasing results on the sale of own solutions and services. By commissioning a data storage centre in Lille and an office building SSE7 at the company’s campus in Kraków, Comarch has completed an intense programme of infrastructure investment from 2016-2017.