Romanian software group AROBS almost doubles its turnover in the first half of 2023
AROBS Transilvania Software (BVB: AROBS), the largest technology company listed on the Bucharest Stock Exchange, posed a consolidated turnover of RON 241.1 million (EUR 49 mln) in the first half of 2023, a 90% increase compared to the same period last year, normalized EBITDA of RON 43.3 million (EUR 8.7 mln), +9% and a normalized net profit of RON 32.5 million (EUR 6.6 mln), a 1% increase compared to the first half of 2022.
Regarding the turnover at the consolidated level, in the first six months of 2023, software services registered an increase of 83% compared to the same period last year, with a 74% contribution to turnover. The segment of software products reported a 21% increase, amid attracting new customers, its contribution to turnover being 14% in H1 2023. Also, the latest business line of the group, AROBS Systems, contributed 12% to turnover, generating revenues of 29.1 million lei. This business segment focuses on implementing hardware and software services and software products for contracting authorities in the public sector. In the first part of the year, AROBS Systems completed a hardware and software solution delivery project to consolidate the databases necessary for the operation of the Customs Integrated Informatics System components. Solutions sold in this segment generate margins between 2% and 8%.
"The next step is the transition to customized solutions for AROBS Systems, which should generate added value business," mentioned Voicu Oprean.
"Integrating operations, technologies, and teams often involves increased consumption of resources and time, which can delay profitability in the short term. In addition, during the transition phase of integrating newly acquired entities into the existing business structure, there are generally operational overlaps that may temporarily decrease efficiency. Together with the management team and divisional directors, we are continuously working on group-wide optimizations to ensure that we capitalize as quickly as possible on potential efficiencies and synergies, aspects that will very soon lead to accelerated growth in our profit margins," stated Bogdan Ciungradi, CFO of AROBS.
In the first half of 2023, normalized EBITDA amounted to 43.3 million lei, representing a 9% increase compared to last year. Within this indicator, the activity of existing companies in the group until June 2022 contributed 73%. Companies acquired since June 2022 had a 26% contribution, demonstrating efficiency in M&A processes and new projects, where innovation plays a significant role.
On September 25, 2023, AROBS shares debuted on the Main Market of the Bucharest Stock Exchange after listing on the AeRO market in December 2021. In the almost two years of activity on the capital market, the company has grown rapidly, both organically and by carrying out nine M&A transactions, which brought into the group companies operating in the same industry and which brought added value by consolidating and expanding the areas of expertise and the geographical footprint of AROBS. The AROBS strategy delivered a 53% equity return in less than two years to investors who participated in the private placement above the BET index.
With the move to the Main Market, AROBS aims to enter the local and regional indices - BET and FTSE Russell- and carry out a share capital increase to attract institutional investors to the company's shareholding.
Note: The consolidated financial results of the AROBS Group for the first semester of 2023 are published in RAS format (Romanian Accounting Standards). The company will publish financial results in IFRS format, starting with the preliminary financial report related to 2023, which led to certain adjustments in the accounting policy. For this reason, the company presented the normalized net result that excludes the amortization of goodwill according to the RAS accounting policy and excludes the non-cash effect generated by the Stock Option Plan programs (SOP). Accordingly, normalized EBITDA represents EBITDA without the impact of SOP programs.
*This is a press release.