ABN Systems’ shares drop on AeRO debut as war fears drag down the local market

The shares of ABN Systems International (ABN), one of the leaders in the distribution of IT&C products and accessories in Romania, went down 5.4% on their first day of trading on the Bucharest Stock Exchange’s AeRO market, on February 14, 2022.

The ABN shares closed the first day of trading at RON 4.9, down from RON 5.18, which was the closing price of the IPO carried out in December-January. The trading volume on the first day was also significantly lower compared to previous debuts on AeRO as the transactions totaled less than RON 160,000 (EUR 32,300). The company’s capitalization after the first day of trading was RON 93.7 million (EUR 18.9 mln).

ABN’s debut was overshadowed by the 2% drop recorded by the Romanian blue-chip index BET, which mirrored similar declines recorded by international stock indices. Local and international investors are worried about the imminence of a war in Ukraine, which would significantly increase the risks at NATO’s eastern border.

ABN Systems is the first local company that carried out an initial primary public offering (IPO) on the AeRO market, instead of a private placement. The company attracted RON 5.5 million (EUR 1.1 mln) from investors in January. It will use the money for development and expansion.

“By listing the shares, we have achieved a strategic goal, raising the company to a higher level of visibility both among customers and in the labor market, aiming to attract top professionals in the team. At the same time, the status of listed company increases our credibility with current and future partners in the dozens of countries where we sell our brand, Tellur,” said George Barbu, president of ABN Systems International.

With a portfolio of over 30,000 IT&C products and accessories, ABN Systems is present in markets in about 30 countries, on four continents, and aims to accelerate the expansion of external sales channels, both by entering new markets and by consolidating the current ones.

In the first half of 2021, ABN Systems International recorded a net turnover of almost RON 50 million, an increase of 34% compared to H1 2020. ABN Systems International's net profit in H1 2021 was RON 2.4 mln, more than 8 times higher than the one registered in the same period of the previous year. Sales on foreign markets increased by 114% compared to the same period of 2020, exceeding RON 26 mln.

The company had an average number of 70 employees in June 2021. According to the prospectus, ABN Systems will continue the policy of distributing dividends to shareholders and is considering the possibility of distributing stock dividends, but also the implementation of a stock option plan dedicated to employees.