Interim report on activities of Aplitt S.A. for the First Half of 2016

Transcription

1 Interim report on activities of Aplitt S.A. for the First Half of 2016 Gdańsk, 26 August 2016

2 Basic information on the Company Name (enterprise): Aplitt Spółka Akcyjna Registered Office: Gdańsk Address: ul. Arkońska 11, Gdańsk Telephone: (+48 58) Fax: (+48 58) Electronic mail: Website: Supervisory Board In the 1st half of 2016 the composition of the Supervisory Board did not change. 1 Grzegorz Michał Bierecki - Chairman of the Supervisory Board, 2 Grzegorz Paweł Buczkowski Vice-Chairman of the Supervisory Board, 3 Andrzej Sosnowski Secretary of the Supervisory Board, 4 Jarosław Szymon Bierecki Member of the Supervisory Board, 5 Andrzej Paweł Szumański Member of the Supervisory Board. Management Board In the 1st half of 2016 the composition of the Management Board changed. On 16 June 2016 Mr Cezary Godziuk resigned from his function of Member of the Management Board, effective as of 30 June In the declaration, no reasons of the resignation were provided. As at the day of drawing up this report, the Management Board consisted of the following members: Ewa Bereśniewicz-Kozłowska President of the Management Board, Marcin Golas Member of the Management Board, Alicja Kuran-Kawka Member of the Management Board, Tomasz Krasiński Member of the Management Board. 1. Description of capital group organisation, indicating entities subject to consolidation, and in case of an Issuer acting as a parent entity which, pursuant to regulations binding it, is not obliged or may not draw up consolidated financial statements, including indication of the reason and legal grounds for the lack of consolidation. The Company does not create a capital group. 2. Indication of effects of changes in the structure of business entity, including those occurring due to merger of business entities, takeover or sales of the entities of the Capital Group, long-term investments, demerger, restructuring and discontinuation of operations. No changes in the structure of the Company took place. 2

3 3. The position of the Management Board concerning possibilities of implementing forecasts of results for the year, published before, in the light of results presented in the semi-annual report in relation to the projected results. The Issuer did not publish forecasts for 2016 or for the consecutive years. 4. Indicating shareholders holding, directly or indirectly through subsidiaries, at least 5% of the general number of votes at the General Meeting as at the day of submission of the semi-annual report, including the number of shares held by such entities, their percentage share in the share capital, number of votes arising from them and their percentage share in the overall number of votes at the General Meeting, and indication of changes in the ownership structure of significant blocks of shares in the period following the submission of the last periodical report. SKOK Holding S.a.r.I. Number of shares Interest in the share capital Number of votes at a general meeting Share in the total number of votes at a general meeting Status as at * 61,428, % 61,428, % Change Status as at ,428, % 61,428, % * according to the data from the report for the 1st quarter of 2016 published on 13 May 2016 SKOK im. Franciszka Stefczyka Number of shares Interest in the share capital Number of votes at a general meeting Share in the total number of votes at a general meeting Status as at * 125,312, % 31,500, % Change Status as at ,312, % 31,500, % * according to the data from the report for the 1st quarter of 2016 published on 13 May

4 5. Specification of the status of shareholding of the Company shares or authorisation to the shares held by persons managing and supervising the Company as at the day of submission of the quarterly report, including indication of changes in the ownership status in the period following the submission of the previous interim report, separately for each of individuals. Number of shares held by members of the Management Board and members of the Supervisory Board: Shareholder Alicja Kuran - Kawka Member of the Management Board Marcin Golas Member of the Management Board Grzegorz Bierecki Chairman of the Supervisory Board Grzegorz Buczkowski Vice-Chairman of the Supervisory Board Jarosław Bierecki Member of the Supervisory Board Change in the period Number of shares Interest in the share capital Number of votes at a general meeting Share in the total number of votes at a general meeting None 4, % 4, % None 4, % 4, % None 45, % 45, % None 44, % 44, % None 22, % 22, % According to the knowledge of the Management Board of the Company, the remaining members of the Management Board and the Supervisory Board did not hold Issuer s shares or authorisation to the shares as at the day of submission of the report for the 1st half of Indication of proceedings pending before the court, competent arbitration authority or public administration authority. The Issuer is not a party to any proceedings pending before the court, competent arbitration authority or public administration authority, with a unit or aggregate value constitutes at least 10% of Company equity. 4

5 7. Information on one or many transactions concluded by the Issuer with related entities, if such transactions are material, individually or jointly, and if such transactions were concluded under terms other than on arm's length basis. The Issuer represents that in the period from 1 January 2016 until the day of submission of the report for the 1st half of 2016 none of the aforementioned transactions were concluded. 8. Information on a surety of a credit or a loan granted by the Issuer or its subsidiary, or a guarantee granted jointly to one entity or a subsidiary of such entity, if the aggregate value of existing sureties or guarantees is equivalent to at least 10% of the Issuer's equity. The Issuer represents that in the period from 1 January 2016 until the day of submission of the report for the 1st half of 2016 it did not grant a surety of a credit or a loan or a guarantee jointly to one entity, or a subsidiary of such entity, if the aggregate value of such sureties or guarantees is equivalent to at least 10% of the Issuer's equity. 9. The dividend paid (total or per share), divided into ordinary shares and other shares. On 20 May 2016 the Ordinary General Meeting of the Company adopted the resolution concerning payment of the dividend from the profit for 2015 in the amount of PLN 2,384, (in words: two million three hundred eighty four thousand eight hundred forty Polish zloty, thirty six grosz). The General Meeting decided to allocate the above amount for payment of the dividend to Company Shareholders, which generates PLN 0.01 (in words: one grosz) per ordinary share, excluding treasury shares held by the Company and PLN (in words: one grosz and a half) per preferential share. In the dividend, 191,577,597 Company shares participate, including 97,764,719 ordinary shares and 93,812,878 non-voting shares, preferential in terms of dividend. Treasury shares held by the Company, amounting to 32,789 as at the day of drawing up this report, were excluded from payment of the dividend for financial year The dividend record day was 19 August 2016, and the dividend payment day is 7 September 2016 (RB 6/2016 of 20 May 2016). 5

6 10. Other information which, in the Issuer s opinion, is essential for the evaluation of human resources, assets, financial situation, financial result and their changes, and information which is essential to assess the possibility to fulfil the obligations by the Issuer. Financial results Profit and loss accounts (in PLN thousand) 1st half st half 2016 Change Revenues on sales 51,103 44,327-6,776 Own cost of sales 44,021 44, Gross profit (loss) on sales 7, ,841 Sales costs Overheads 5,461 5, Profit (loss) on sales 1,338-5,402-6,740 Other operating revenues Other operating expenses Profit (loss) on operating activity 2,020-5,242-7,262 Financial revenues Financial expenses 2, ,642 Gross profit (loss) 222-5,478-5,700 Income tax Net profit (loss) 120-5,347-5,467 In the 1st half of 2016 APLITT S.A. revenue on sales amounted to PLN 44,327 thousand and, compared to the corresponding period of the previous year, they decreased by PLN 6,776 thousand. In the same period own costs of sales increased by PLN 65 thousand. Consequently, in the 1st half of 2016 the Issuer generated gross profit on sales in the amount of PLN 241 thousand, i.e. lower by PLN 6,841 thousand in relation to the 1st half of The highest decline in revenue on sales occurred in the segment of IT services whereas the highest slump in gross profit was recorded in the COKiT segment (cards and ATMs). 6

7 Results in segments (in PLN thous.) 1st half st half 2016 change Revenues on sales 1st half st half 2016 Change Gross profit (loss) on sales COKiT 21,879 19,297-2,582 3,028-1,270-4,298 IT services 27,999 23,916-4,083 3,587 1,010-2,577 WESTERN UNION 1,225 1, Total 51,103 44,327-6,776 7, ,841 Costs of sales increased by PLN 138 thousand (growth by 49%), whereas overhead costs decreased by PLN 239 thousand. Growth in costs of sales results from internal reorganisation of personal resources in order to increase the Issuer s sales forces oriented to acquisition of new clients. At a level of other operating revenue, financial revenue and operating costs in the 1st half of 2016, no events which would significantly affect the Issuer s financial result were recorded. Financial costs amounted to PLN 438 thousand and decreased by PLN 1,642 thousand in relation to the 1st half of Such a radical decrease in financial costs is a consequence of the change in the model of supplying Issuer s ATMs in cash. On 30 July 2015 the Company signed the Agreement on cooperation in the scope of cash service with Bank Zachodni WBK S.A. The new agreement replaced a former model of ATM supply which operated based on cash acquired from Bank Zachodni WBK in the form of working capital revolving overdraft facility. (RB 47/2015 of 30 July 2015). Until then, arising costs were classified as financial expenses. At present, costs increase the level of own cost of sales and they made one of the basic sources of the growth in those costs presented above. After considering all factors affecting the net financial result the Company generated net loss in the amount of PLN 5,347 thousand. The company closed the corresponding period of the previous year with the net profit in the amount of PLN 120 thousand. Net Profit (loss) in PLN thousand * in 2015 Q3, net profit (loss) includes the dividend received from TZ SKOK Sp. z o.o. SKA in the amount of PLN 7,006.7 thousand. * in 2015 Q4, net profit (loss) includes the dividend received from TZ SKOK Sp. z o.o. SKA in the amount of PLN 1,643.5 thousand. 7

8 The underlying reasons of the decline in the revenue on sales and, as a consequence, generating of net financial loss in the 1st half of 2016 included: o o continuation of the policy of discounts and price rebates executed by the Issuer since the beginning of the 2nd half of 2015 towards credit unions, translating into the assumptions of recovery programmes implemented by those entities; decline in the demand for the Issuer s services from SKOK system entities as a result of executed savings programmes, introduction of the receivership procedure, declaration of bankruptcy as well as acquisition by banks. According to the Issuer s assessment, a possibility of operating a stable and financially capable SKOK system lies within a well-perceived long-term Issuer s economic interest. At the same time, it is difficult to predict both the duration of recovery processes and their effects. However, the policy of discounts and price rebates executed by the Issuer takes into consideration the necessity to maintain security in the scope of financial liquidity and solvency. Besides recognising of the net loss at a level of PLN 5,346 thousand, the value of the generated financial surplus (net result + depreciation) amounted to PLN 933 thousand. Other information In July 2016 the certificate of compliance of activities undertaken by APLITT with the Payment Card Industry Data Security Standard was extended (hereinafter referred to as: PCI DSS ). The original certificate was granted to the Company on 31 July It is the security standard issued by Payment Card Industry Security Standards Council (established by card organisations American Express, Discover Financial Services, JCB International, MasterCard Worldwide and Visa International, in order to facilitate the implementation of the harmonised approach to card data worldwide). The standard was created in order to ensure a high and consistent level of security in all environments where data of payment cardholders are processed. The PCI DSS contains the set of requirements increasing the security of payment card data. The requirements comprise: maintaining of safe network architecture; securing the data of cardholders; monitoring, detection and elimination of any vulnerabilities of systems and applications; designing safe software; maintaining strong mechanisms of internal control, both logical and physical; permanent monitoring of all networks and systems, with particular attention to access to cardholders data; regular tests of security systems and processes; maintaining of adequate security policies and procedures. On 20 May 2016 the Ordinary General Meeting of the Company adopted the resolution concerning the transfer of PLN 72,850 thousand from the supplementary capital to the revaluation reserve. Adoption of the resolution resulted from the necessity to supply the revaluation reserve and cover differences from valuation of long-term financial instruments. (RB 5/2016 of 20 May 2016). 11. Indicating factors which, according to the opinion of the Issuer, shall have impact on the results to be achieved by it within the perspective of at least the next semi-annual period. According to the Management Board assessment, results in the perspective of the nearest quarters will be affected by payment of the dividend from profit distribution for 2015 by Towarzystwo Zarządzające SKOK Sp. z o.o. spółka komandytowo - akcyjna. On 1 April 2016 the General Meeting of Shareholders of the Company Towarzystwo Zarządzające SKOK Sp. z o.o. spółka komandytowo-akcyjna adopted the resolution on the distribution of profit for In accordance 8

9 with this resolution the Issuer is entitled to receive the amount of PLN 1,442 thousand. The dividend will be paid by 30 September Risks and threats associated with the remaining months of the financial year Description of significant risk factors and threats Risk factors and threats associated with the Company operations can be divided into two groups: a. Risks associated with current and future operations of the Company: risk associated with suppliers - cooperation of the Company with suppliers, inter alia, providers of software, ICT links and companies operating ATMs, bears risk associated, inter alia, with the potential failure of hardware infrastructure and software. Occurrence of some of them may hamper using services offered by the Company. To that end, the Company has selected and keeps selecting renowned suppliers and sub-suppliers of hardware and software used in its activity. The restrictive agreements for the provision of services concluded with them ensure security and continuity of system performance. risk to security of information systems - activity of the Company is exposed to force majeure events, with no human participation, e.g. damage to equipment, blackout, fires, flooding and to events with human participation, e.g. burglary, unauthorised access to data - which may disrupt security of the system and its efficient performance. The Company endeavours to ensure that all transactions are performed maintaining the security rules as well as confidentiality of clients and users data. risk associated with the loss of key employees the competences of employed specialists have a significant impact on the Company operations. The Company mitigates the level of this risk through active personal policy in the scope of remuneration system, systematic training and professional promotion. b. Risks associated with the environment in which the Company operates: risk associated with the change of situation of Credit Unions (Spółdzielcza Kasa Oszczędnościowo- Kredytowa) - there is a risk that in case of deterioration in the SKOK market situation, the demand for services provided by the Issuer may decrease. In order to mitigate that risk the Management Board of the Company modifies the product portfolio to adjust it to the changed SKOK needs. In addition, the Management Board of the Issuer concentrates its activities on the development of services which may be offered to the external market. risk associated with macroeconomic situation in the country - there is a risk that in case of deterioration of the economic situation in Poland and the decline in consumer demand, the growth rate of the Company may slow down. The Management Board of the Company analyses the macroeconomic situation on an on-going basis, adjusting the activity plan to the requirements of the market, legal and economic environment. risk associated with changes in currency exchange rates - the Company settles some transactions in foreign currency (USD and EUR). Volatility of currency exchange rates mainly affects the value of revenues achieved due to provision of money order services and the value of such capital expenditures which are settled based on foreign currency. In order to mitigate currency risk, employees responsible for currency conversion transactions continuously monitor the status of foreign currencies held by the Company in the financial and accounting system and compare the currency purchase rate with the rates currently available on the market, at which 9

10 sales transactions may be concluded. In addition, current needs of the Company are also analysed on an on-going basis in the scope of quantities of currency needed for settlements with Clients. risk associated with changes in legal regulations changes in tax law regulations as well as other regulations referring to the banking sector and payment and financial services, and the market of securities, may result in the growth of costs of Company operations, reduction of operating margin and decline in profitability. Risk factors associated with regulations of international payment organisations (MasterCard and Visa) may have similar effects. The Card Settlement Team and the Financial Analysis Department analyse servicing costs of individual activity areas and impact of regulations related to margins on an on-going basis. The legal team analyses the legal environment of the company on an ongoing basis, ensuring maintaining of the relevant legal basis for the enterprise operations. competition risk there is a risk that the Company may lose its market position as a result of launching activities by other entities on the Polish market, providing services in the same areas as the Company activities. Using the latest research, reports and market data, the Sales Department analyses the market position of the Company on an on-going basis, including suppliers carrying out activities competitive towards the Company, verifies competitiveness of own offers and types of service distribution and promotion, conducts anti-churning activity and offers special solutions tailored to Customers. risk associated with the change in interest rates - in connection with the use of foreign capital, the Issuer is exposed to the risk of changes in interest rates. Interest rate risk management consists in on-going monitoring of the market situation. In the reporting period, as in the comparable period, the Company did not use instruments hedging interest rate risk. Ewa Bereśniewicz-Kozłowska President of the Management Board Alicja Kuran-Kawka Member of the Management Board.. Marcin Golas Member of the Management Board Tomasz Krasiński Member of the Management Board 10