ATM S.A. shows positive financial results despite the observable economic slowdown and dramatic depreciation of the Polish currency. The consolidated net profit of the Group for 2008 stood at PLN 10.4 million.
In Q4 2008, ATM S.A.’s consolidated revenues equaled PLN 116.6 million (compared to PLN 129.4 million in 2007). Annual revenues remained at the previous year levels and equaled PLN 266.3 million (increase by 2.4%). Net profit in Q4, compared to the previous year, dropped significantly and stood at just PLN 10.2 million (PLN 21.1 million in 2007), which resulted in the annual profit falling from PLN 21.6 million to PLN 10.4 million.
Lower than predicted Q4 sales revenues resulted from the lack of major integration contracts that were expected by the company at the end of the year — this is a direct consequence of the noticeable economic slowdown in Poland, as well as of a temporary withdrawal of potential customers from major investment projects. The Company's revenues came mainly from minor integration contracts and from the soaring sales of telecommunications services.
ATM S.A. shows excellent results related to telecommunications services provided under the ATMAN brand, which in Q4 2008 exceeded for the first time PLN 20 million in revenues. The Company has been systematically increasing its revenues from permanent contracts, and it is ready to face the growing demand for outsourcing services based on broadband networks, collocation and hosting. These operations remain highly profitable, stable and predictable, as well as resilient to the symptoms of economic stagnation.
As many other players, the company has not been able to avoid the adverse effects of the situation on the forex market. At the end of 2008, the company suffered significant losses related to exchange rates differences, resulting from the appreciation of USD against PLN, when purchasing products under integration contracts. The total cost of foreign exchange differences for the consolidated ATM S.A. Q4 results amount to approx. PLN 6.4 million. It is worth mentioning at this point that neither ATM S.A., nor any of the Group's companies, did enter into any foreign currency-related forward contracts, or any other contracts exposing them to disproportionate currency risks relative to their operations. The financial losses from currency exchange rate differences are the main cause of the reduction in profits, when compared to 2007.
The Group's companies keep increasing revenues and profits. Only mPay S.A. and mPay International Sp. z o.o. have a significant negative effect on the consolidated results (a loss of PLN 5.4 million in 2008). This seems inevitable at this stage of their development. However, the fact that the mPay platform has been selected for the provision of “Pay with your mobile” services, launched jointly by ZTM (Municipal Transport Authority) in Warsaw, the Citi Handlowy bank and Polkomtel, provides an optimistic outlook for the company.
In spite of adverse economic conditions, the ATM S.A. Group has successfully continued operations in all three basic business areas, i.e. integration, telecommunications services, and software development. The company has completed major investments in infrastructure necessary for increasing revenues from telecommunications services, and in proprietary software products, which can be now offered to a broad spectrum of customers. The decrease in 2008 profits results from the negative economic climate and certain one-off events — however, the fundamentals remain sound. The Management Board of the company expects positive developments for the ATM Group this year.