Romanian listed technology group Bittnet slows down growth rate but returns to profit in 2020

Bittnet (BNET), the only Romanian IT group listed on the Main Market of the Bucharest Stock Exchange, reported RON 108.6 million (EUR 22.4 mln) consolidated revenues in 2020, up by 9% compared to the previous year. The group's growth rate slowed down significantly compared to the previous three years when its business almost doubled each year, but the operating profitability improved.

In 2020, Bittnet posted a consolidated operating profit of RON 4.3 million (0.9 mln), up fivefold compared to the previous year. The 2020 bottom line showed a small profit of RON 52,000 (EUR 10,000), compared to RON 2.7 mln (EUR 0.55 mln) losses in 2019.

"Just as bridges are subjected to extreme endurance tests before they are open to the public, so has 2020 been for us - a sum of endurance tests for Bittnet Group. I am happy that we have passed these tests well. Our group is financially and operationally ready for a new cycle of accelerated growth, adapted to the new business realities, challenges and local and international market opportunities. In a challenging year, we have still grown all our indicators, turning back to profit," said Mihai Logofatu, CEO and co-founder of Bittnet Group.

"In 2020, we generated a business of RON 140 million, but the international lockdowns and general elections in Romania delayed the finalization of the projects gained. We expect these delayed projects to have an additional, positive effect on our 2021 results," he added.

Bittnet's technology division, which includes Dendrio and Elian, recorded RON 96.6 million (EUR 20 mln) in revenues, an increase of over 11%. Meanwhile, the Education Division's activity, represented by Bittnet Training and Equatorial, was impacted by the training budget cuts or freezes. Consequently, its revenues decreased by 6% compared to 2019.

Bittnet Group achieved an operating cash flow of over RON 8 million, which, combined with access to the capital market, allowed it to carry out new investments. Consequently, in 2020 Bittnet Group made new investments worth over RON 10 million (EUR 2 mln) in Equatorial Gaming, The eLearning Company, and Softbinator.

According to the preliminary budget for 2021, Bittnet aims for a consolidated turnover of RON 157 million (EUR 32 mln), up 45% compared to 2020, and a gross profit of RON 12.8 million (EUR 2.6 mln). These estimates include the results to be generated by the companies that joined the group in 2020.

Bittnet's shares have gained 35% in the last 12 months, and, in the last three months, they have traded around the level of RON 0.7, with little variations. The company's market capitalization is currently RON 164 mln (EUR 33.6 mln).