ASBISc Enterprises Plc, a leading distributor of IT products in the emerging markets of Europe, the Middle East and Africa, significantly improved its results in Q1 2017. The Group continued its strategy to improve margins, while keeping expenses under control. While revenues in Q1 2017 grew by 16.50% y-o-y, gross profit margin reached 5.22%. As a result, gross profit grew by 13.81% to U.S.$ 15,139 from U.S.$ 13,302. Expenses remained under control and only grew to the extent of investments in new business. EBITDA grew by 18.80% to U.S.$ 4.517 in Q1 2017 as compared to U.S.$ 3,802 in Q1 2016. Net profit after tax in Q1 2017 amounted to U.S.$ 551 thousand as compared to U.S.$ 401 in Q1 2016 showing a 37.40% improvement.
Having seen a significant growth in revenues and opportunities in its major markets, the Company fully sustains its financial forecast for the year 2017.
Siarhei Kostevitch, CEO and Chairman of ASBISc Enterprises Plc, said, “In Q1 2017 we started to benefit from improved position in our major markets, that we won by supporting our customers in tough times. We have also noticed some improvement in overall consumer sentiment. As a result, our revenues in FSU almost doubled after a strong growth in all major countries of the region. Having seen this growth, we have decided to invest more in these markets and benefit from market revival. This has triggered a growth in expenses though. However, the pace of this growth was slower than the pace of growth in revenues and gross profit. As a result, profitability grew at all levels.”
He continued, “We expect this positive trend to continue in the next quarters, although we need to remember that Q2 usually is the slowest period of the year. We expect to realize the majority of our forecasted profits, as usual, in the second half of the year. Meanwhile, we work on keeping gross profit margins high enough so we benefit from any improvement in demand in our major markets.”
Focus on the F.S.U. region allowed the Company to continue its very good sales performance and show an impressive 89.02% growth year-on-year. Following that, the F.S.U. share in our total revenues grew to 48.15% from 29.68% in Q1 2016 (and 42.23% in Q4 2016).
Sales in the Central and Eastern Europe region have decreased by 8.15% in Q1 2017 as compared to Q1 2016. Sales in Western Europe in Q1 2017 decreased by 7.17% compared to Q1 2016. Sales in MEA region have decreased by 17.03% in Q1 2017 as compared to Q1 2016.
Growth in F.S.U. has arisen from a continuous improvement in Russia, Ukraine, Kazakhstan and Belarus that in Q1 2017 grew by 87.25%, 85.71%, 163.84% and 36.48% respectively. In the same time the 26.68% decrease in Slovakia has been partially compensated by a 20.81% increase in the Czech Republic, 16.38% increase in Romania and 6.81% increase in Hungary. The decrease in MEA region of 17.03% is mainly attributed to the slow-down in the North Africa region where last year we have serviced large projects.
In Q1 2017 revenues from CPUs and HDDs decreased by 6.33% and 8.90% respectively as compared to Q1 2016. However, decrease in HDDs sales was compensated with 185.49% growth in sales of SSDs. Laptops sales increased by 15.66% and sales of tablets grew by 32.47%. What is even more important, we increased sales of smartphones in Q1 2017 by 44.97% year-on-year (mostly following an improvement in iPhone sales). As a result, smartphones were again no. 1 segment in our product portfolio for Q1 2017.
From other product lines, the Company has noticed a positive trend for Q1 2017 in mainboards and VGA cards (+34.26%), PC desktop (+22.87%), peripherals (+65.77%), display products (+38.89%), memory modules (+102.48%), accessories and multimedia (+74.87%) and flash memory (+13.49%).