Tecnotree Corporation Interim Report 1st Jan – 30th Sep 2022 (unaudited)
Tecnotree Corporation Stock Exchange Release 21 October 2022 at 9.00 EET
Steady growth in revenue with continued strong order position
Third quarter (July – September 2022)
- Net sales EUR 19.9 (18.2) million.
- Operating result EUR 5.0 (7.1) million.
- Result for the period EUR 3.4 (5.4) million.
- Cash flow after investments EUR 5.5 (-3.3) million.
- Earnings per share EUR 0.01 (0.02).
- Order book at the end of the period EUR 76.1 (58.6) million.
January - September 2022
- Net sales EUR 51.5 (46.1) million.
- Operating result EUR 12.2 (17.7) million.
- Result for the period EUR 8.3 (13.1) million.
- Cash flow after investments EUR 1.2 (0.2) million
- Earnings per share EUR 0.03 (0.05).
| Key figures, MEUR | 7-9/2022 | 7-9/2021 | 1-9/2022 | 1-9/2021 | 1-12/2021 |
| Net sales | 19.9 | 18.2 | 51.5 | 46.1 | 64.2 |
| Operating result | 5.0 | 7.1 | 12.2 | 17.7 | 23.7 |
| Result before taxes | 5.1 | 6.4 | 12.5 | 15.5 | 21.4 |
| Result for the period | 3.4 | 5.4 | 8.3 | 13.1 | 18.3 |
| Earnings per share, basic, EUR | 0.01 | 0.02 | 0.03 | 0.05 | 0.06 |
| Order book | 76.1 | 58.6 | 53.5 | ||
| Cash flow after investments | 5.5 | -3.3 | 1.2 | 0.2 | 4.0 |
| Change in cash and cash equivalents | 5.6 | 3.3 | 2.3 | 5.9 | 9.5 |
| Cash and cash equivalents | 19.9 | 13.9 | 17.6 | ||
| Equity ratio % | 80.8 | 83.1 | 85.2 | ||
| Net gearing % | -25.2 | -22.6 | -26.0 | ||
| Personnel at end of period | 798 | 715 | 750 |
Prospects 2022 (unchanged)
In the second half of 2022, Tecnotree expects its revenue to be higher compared to the first half of 2022. The full year revenue in 2022 is expected to be 5 to 10% higher compared to 2021 and the full year EBIT in 2022 is expected to be lower compared to 2021. The lower EBIT is on account of the business requirement to fulfil the high order book, investments in new initiatives (Tecnotree Moments, Fintech and SaaS) coupled with headwinds caused by high inflation and adverse currency movement.
CEO Padma Ravichander: Strong growth with focus on cost management
Tecnotree witnessed surge in demand for its products and solutions through the third quarter of the year, resulting in the another record level order book position of EUR 76.1 million (EUR 58.6 million), witnessing a 30% growth compared to Q3 of last year. We continued to receive big orders from large tier 1 Operators for our Digital BSS Suite 5, which require that we invest to deliver these orders expeditiously. This will ensure long term recurring revenue from these new customers.
This quarter, Tecnotree in addition, signed a multi million dollar deal with MTN Nigeria for 5G Digital Transformation to accelerate their business growth. Tecnotree LATAM region acquired a new customer logo, ENTEL Bolivia for our Digital Accelarator Platform (DAP). In addition, Tecnotree also announced an fast-track global ISV partnership with Microsoft to accelerate digital transition to cloud with Microsoft Azure.
This quarter Tecnotree was also recognized by TM Forum, the telecom industry standards body, as the first digital platform company in the world to be certified for real-world open API implementation, which ensures quick and rapid integrations to accelerate business growth and growth in our partner ecosystems in the 5G and Cloud era.
Despite the continuing geo-political issues, our revenue grew by 9% in current quarter at EUR 19.9 million against EUR 18.2 million compared to same quarter last year.
Furthemore, as a product company, we witnessed 28% growth in our license revenue for the review period compared to same period last year, which demonstrates strong trust in Tecnotree and provides credible references to our potential customers.
In the review period we registered an increase of 10% in recurring revenue compared to same period last year, which validates the stability of our platform and our ability to rapidly deliver our digital stack to multiple customers simultaneously.
Our net result margin declined to 16% (28%) as a result of increased cost. Costs increased due to external factors, like wage inflation, but also due to our strategic focus on continuously investing in R&D and also securing global customer deliveries. We remain focused on managing our costs, while we continue to deliver to customers, ensuring that we are monetizing on all opportunities to increase our order intake and meet our deployment commitments on time.
We continue to work with the inherent risks of currency fluctuations, high wage inflation and supply chain pressures and are making necessary efforts to mitigate their impact. Additionally, we continue our investments on new initiatives – Tecnotree Moments, Tecnotree DiWa (Digital Wallet) and SaaS expecting good response in the next few quarters.
Order intake
New orders recorded during the third quarter totalled to EUR 23.2 million compared to EUR 11.8 million last year. Order book at the end of the third quarter was EUR 76.1 million being 30% higher compared to EUR 58.6 million last year.
Net sales
Net sales in the third quarter were EUR 19.9 million showing 9% growth compared to last year. Correspondently, net sales during the first nine months were EUR 51.5 million and 12% higher than last year. The growth in net sales came from MEA & APAC segment.
Profitability
Tecnotree’s operating result in the third quarter was EUR 5.0 million and declined by EUR 2.1 million (-38%) compared to EUR 7.1 million last year. Operating result during the first nine months was EUR 12.2 million and declined by EUR 5.6 million (-31%) compared to EUR 17.7 million last year.
Tecnotree’s result in the third quarter was EUR 3.4 million and declined by EUR 2.0 million compared to EUR 5.4 million last year. Result for the review period was EUR 8.3 million and declined by EUR 4.8 million (-37%) compared to EUR 13.1 million last year.
Financial situation
Cash and cash equivalents at the end of the third quarter were EUR 19.9 million compared to EUR 13.9 million last year. While we continue to review receivables, which are mainly from large Tier 1 Operators, as a measure of abundance caution, Tecnotree has made necessary provisions for the same. Tecnotree’s financial position remains strong and debt free.
Other business updates
With Tecnotree Moments platform and its Fintech offerings, we hope to synergize new partnerships with communication and Digital Service Providers, eco-system players and internet of things (IOT) providers, to introduce new revenue models and API frameworks to take advantage of the 5G roll-outs world-wide and forge new frontiers to empower digitally connected communities in the sectors of Education, Health, E-commerce, Gaming, Sports and Entertainment.
Further information
Padma Ravichander, CEO, tel +97 156 414 1420
Indiresh Vivekananda, , CFO, tel +91 98454 90584
About Tecnotree
Tecnotree is a 5G-ready digital Business Support System (BSS) player with AI/ML capabilities and multi-cloud extensibility. It has over 40 years of deep domain expertise and it is amongst the first few companies to attain Platinum Badge in the world for Open API standards by TM Forum. It’s agile and open-source Digital BSS Stack comprises of the full range (order-to-cash) of business processes and subscription management for telecommunication players and other digital services providers, creating opportunities beyond connectivity. Tecnotree also provides a Fintech solution and a B2B2X multi-experience digital marketplace to its subscriber base through the Tecnotree Moments platform to empower digitally connected communities across gaming, heath, education, OTT and other vertical ecosystems. Tecnotree is listed on Nasdaq Helsinki (TEM1V). For more information, please visit www.tecnotree.com.