|Subscription sales continue to rise - ATM publishes its report for the first half of 2015|
The Company has presented its financial results for the first half of 2015. With double-figure growth in data center services, accompanied by falls in the telecommunications segment, total revenue from both operating segments stood at 61.1m zloty (PLN), a similar level as in the first half of 2014. Almost all revenue (more than 98%) in the first six months of 2015 came from subscription payments revenue in this category rose by approximately 4% year-on-year.
Warsaw, 27 August 2015 Data center services, a key segment for the Companys EBITDA (responsible for 60% of its total EBITDA in the first half of the year), produced a year-on-year increase in revenue by 13% (17% for subscriptions) as well as an 11% increase in profits on sales. The growth in commercialization of data center space was approximately 10% year-on-year.
We are pleased with the relatively good results for data center services. We remain convinced, however, that the rate of growth in that area of our activity ought to be even higher. The results for the first half of 2015 were most influenced by the expansion of cooperation with several of our largest colocation customers, as well as the continuing rapid growth in revenue from the leasing of ATMAN EcoSerwer dedicated servers, sold online. We have also observed the first effects of our launches of new products for example, the backup office services provided under a new model. We expect that in the remainder of the year the effects of implementation of the strategy announced in May of this year will become increasingly satisfying to the Companys shareholders, said Tadeusz Czichon, CEO of ATM S.A.
In the telecommunications services segment the Company recorded a year-on-year fall in revenue by 7% in the first half of 2015, and a fall in profits on sales by 17% year-on-year. The drop in revenue applied mainly to new connections, although there was also a 3% fall in subscription revenue in the same period, which is chiefly a result of the downward trend observed in the first three quarters of 2014. Since the last quarter of last year, thanks above all to growth in the customer base by about 20% year-on-year, the Company has succeeded in putting a halt to the decline in this area.
Putting an end to the falls in subscription revenue is the first step on the road to stabilizing our results in the telecommunications services segment. Unfortunately, together with this positive achievement, we have experienced a decrease in the profitability of these services, with the sales margin falling by several percentage points. Apart from the loss of high-margin non-subscription sales, there has also been a fall in the profitability of subscription services (from 52% in the first half of 2014 to 48% at present). We are taking action to alter this downward trend, and we regard this as the greatest challenge faced by the telecommunications segment. The way to achieve this goal is to expand the product line with modern, higher-margin products and to increase the effectiveness of the sales department, commented Jacek Krupa, Vice President of ATM S.A.
Ultimately the profit on sales from ATMs business as a whole fell in the first six months by 8% year-on-year (to 33.5m PLN). An increase in fixed costs (by 8% year-on-year), resulting from measures taken to improve the Companys efficiency and rate of growth, led to a decrease in EBITDA by 23% year-on-year (to 16.9m PLN), and the net profit of 4 million PLN was 40% lower than in the corresponding period of 2014.
At the end of June 2015 ATM was providing services to approximately 2000 customers (a year-on-year increase of 17%), and the greatest contributions to its revenue came, as has traditionally been the case, from the financial and telecommunications industries (together accounting for more than 60% of the total).