Good Operational Performance Leads to Income Growth in the Domestic Market
- Operating Revenue of 23,5 million Euros (vs. 24,4 million Euros in 2019). Revenue in the domestic market reached 18 million Euros, an increase of 13.8% (vs. 15,8 million Euros in 2019)
- Consolidated EBITDA of 6,0 million Euros (vs. 4,0 million Euros in 2019) and recurrent EBITDA of 3,1 million
- EBITDA margin of 25.8% (vs. 16.3% in 2019)
- Income before Taxes of 3 thousand Euros (vs. negative 797 thousand Euros in 2019)
- Net Loss of 1 million Euros (vs. 49 thousand Euros Income in 2019), resulting from an increase in impairments relating to previous years and an extraordinary tax adjustment
- International Sales represented 24% of total (vs. 35% in 2019)
1. Summary of the Activity
Despite the strong impact of the Covid19 Pandemic, Reditus has been able to maintain its operations in 2020 in Portugal, as well as in its foreign markets. Major restrictions on international travel have led Reditus to very successfully focus its business strategy on the Portuguese market. As a result, the company saw its domestic business grow 13.8% in 2020. This growth is also being felt in 2021, along with the resumption of international business as a consequence of the opening of borders and of its customers’ decision to resume strategic investment projects.
The results hereby presented reflect the successful implementation of the strategy designed by Reditus to face the challenges presented by the Pandemic. In this context, the Company carried out an internal reorganization and broadened the search for new business opportunities, both domestically and abroad. As such, we focused on our core activities and reinforced rationalization measures, namely with regard to staff, supplies and external services costs, as well as reducing financial charges.
EBITDA reached 6,0 million Euros in FY20, with an EBITDA margin of 25.8%. These compare with € 4,0 million and 16.3% in the previous year. It should nevertheless be noted that this result reflects an extraordinary event that inflated this indicator by 2,9 million Euros. Otherwise, the EBITDA resulting from current activities reached 3,1 million Euros in 2020, corresponding to an EBITDA margin of 15.3%.
Net Result for the period was a loss of 1,06 million Euros, which compares to the 49 thousand Euros income registered in the previous year. This in the consequence of an extraordinary adjustment relating to previous years and relates to impairments amounting to 3,3 million Euros and to tax levies. Without this effect, the Net Result would have been positive at 2,2 million Euros.
Operating Revenue suffered a 3.6% reduction and reached 23,5 million Euros, which compares with 24,4 million Euros registered in the same period of the previous year. In spite of a 13.8% growth in domestic business, the decrease in international projects resulting from the widespread economic impact of the pandemic on the markets, contributed to this result.
The IT Outsourcing area suffered a revenue contraction as a result of the difficulties created by the pandemic and the consequent reduction in demand for services and solutions offered by this activity segment. On the other hand and as a reflection of the aforementioned operational adjustment measures, we have been able to obtain an improvement in the EBTIDA and the respective EBITDA margin.
Revenues from the IT Consulting area were affected even further, also due to a context-related contraction in demand. We have nevertheless been able to improve the operational profitability indexes, with an EBITDA standing at 1,4 million Euros and an EBITDA margin of 39.8%, or an increase of respectively 33.5% and 33.4 pp when compared with the previous year.
Conversely, the BPO area saw a 20% revenue growth to 12,6 million Euros, while its EBITDA and EBITDA margin also improved and reached 2,3 million Euros and 18.6% respectively. Such results represent a very significant operational improvement, with rates of respectively 331.5% and 13.4 p.p.
International Operations registered an expected 35.7% contraction in Revenue compared to 2019, with its weight in relation to the Group's overall revenue decreasing from 35% to 24%. Such reduction is explained by the economic impact of the pandemic in the markets where Reditus usually has its operations, aggravated by the restrictions imposed on international travel and by the decision of customers and other entities to postpone strategic investments, which had already been allocated for 2021. The positive evolution of the pandemic and of the international travel policies have in the meantime allowed for the reversal of some of those decisions, and Reditus is already working anew on a number of those projects. With revenues exceeding 5.5 million Euros, it remains an important contributor to the overall Reditus’ business and therefore deserves the company's continued commitment.
For 2021 and despite a persisting uncertainty resulting from the global public health problem, it should be noted that new challenges and opportunities have been appearing, for which the Group is well prepared in terms of meeting its customers expectations; we therefore expect a positive growth in business, with the allocation and "kick-off" of some strategic and large-scale projects which had already been awarded or were in the final contractual stages, both in the domestic and international markets. Such new opportunities have been materializing since the end of 2020 and during the first quarter of the current year and, in addition to their implementation, Reditus will also continue to actively pursue opportunities in Nearshore projects.