The Asseco Group's results in the first half of 2018 - record-breaking revenues and profit growth in key areas of operations
In the first half of 2018, the Asseco Group recorded very good financial results. The sales revenues increased by 7% on annual basis to over PLN 4.4 billion, the operating profit went up by 20% to over PLN 371 million and the net profit attributable to the shareholders of the parent company rose by 39% to PLN 157.3 million.
For the purpose of assessing the actual financial and business position of the Asseco Group, data adjusted for the cost of additional amortization of intangible assets (PPA and SBP) recognized in connection with regaining control over the Formula Systems Group, are of key importance. Excluding this accounting effect, the Group's profits increased at double-digit rate: non-IFRS1 operating profit increased by 34% to PLN 500 million, while non-IFRS net profit* went up by 43% to PLN 181 million.
We achieved very good results in the first half of the year - the sales of the Asseco Group increased in all sectors and business segments. The Group's adjusted operating profit, which strips out the negative impact of additional amortization of intangible assets recognized in connection with regaining control over Formula Systems, increased by 34% versus the corresponding period of the previous year. Such positive results were achieved thanks to a very good situation in the banking sector, in which we carried out new orders to support adaptation to key changes in the law. Additionally, the Group's companies were performing more international implementations. The revenues increased in all of our business segments. We are particularly pleased with Asseco International, which achieved double-digit sales growth, and the companies comprising the holding have promising growth prospects, said Rafał Kozłowski, Vice President of the Management Board of Asseco Poland.
The Asseco Group's sales revenues are diversified between sectors - the general business sector accounts for 40% of total revenues, the banking and finance sector - for 39% and the public administration sector - for 21%. The Group is also geographically diversified and presents its results broken down by three segments: Asseco Poland (the Polish market), the Formula Systems Group (the Israeli market), and Asseco International (other international markets).
In Asseco Poland's segment, the sales revenues increased by 7% to PLN 668 million. The operating profit improved significantly, as it went up by 69% on annual basis to PLN 120.5 million. These results were mostly influenced by Asseco Poland, which performed particularly well in the banking and finance sector. The public administration sector also saw a recovery.
The Group's Israeli companies also had a good quarter. The revenues of Formula Systems increased by 3.0% on annual basis to PLN 2.6 billion. Sapiens increased its sales and profitability. In the first half of 2018, the companies from the Formula Systems Group bought new companies in the US: Adaptik, Alius Corp and PVBS. Adaptik offers software for the insurance sector, specializing in property insurance solutions. Alius Corp provides IT services in the area of regulatory compliance and security to financial entities in the US market. PVBS LLC deals, among other things, with the implementation and integration of ERP systems for governmental entities or entities providing services to the state, operating onthe American market.
During the past 6 months, Asseco International, which is responsible for other international markets, increased its revenues by 16% to PLN 1.2 billion. Organic growth was supported by last year's acquisitions of Slovakian CEIT and Polish Macrologic. Additionally, in the second quarter Asseco International acquired a 66% stake in DWC Slovakia - a provider of document management software. The Asseco Group takes advantage of the significant growth in demand for ERP solutions in its region. It also develops its offering of advanced products for the industrial, banking, finance, and health sectors.