Statement from the Board of Directors
Statement from the Board of Directors,
The COVID 19 Pandemic was, without a doubt, the most destabilizing element in the economy, in the projects of companies and in the ambitions and perspectives of Portuguese families throughout 2020. By introducing a high factor of uncertainty in the internal and external economic outlook, as a result of the various government measures that forced consecutive confinements, closure of borders, companies and sectors of activity, the pandemic significantly impacted the investment of companies and forced them to rethink their businesses, their strategies and, consequently, their organizational model.
Despite having also suffered the violent impact caused by the Government's restrictive measures to combat the public health crisis, Reditus was able, in a short period of time, to adapt its entire organizational model in order to protect the health of its employees and safeguard its economic and financial interests. These measures allowed us to reorganize and simplify our operations teams, integrate new Human Capital, with a focus on innovation, automation and operational efficiency. In this way, we managed to move up the value chain of our Clients and maintain operational activity in 2020 in Portugal and abroad, even managing to increase our turnover in Portugal.
The success of the implemented strategy, namely with regard to internal reorganization and the search for new business opportunities, inside and outside the country, allowed us to focus on core activities and find new projects and business opportunities with greater added value. This resulted in an increase of the business volume carried out in the national territory and the implementation of a policy to rationalize costs, namely with personnel, supplies and external services and the reduction of financial costs.
Operating Income fell by 3.6% to 23.5 million euros compared to 24.4 million euros in the same period last year. The 13.8% growth in business carried out in the Portuguese territory had a significant relevance in this result, despite a decrease in international projects, due to the economic impact of the pandemic in the different geographies in which Reditus is present, aggravated by the restriction on the movement of people and by the decision of customers and other entities to postpone strategic investments.
EBITDA reached 6.0 million euros, corresponding to an EBITDA margin of 25.8%. These values compare with 4.0 million in the same period and an EBITDA margin of 16.3%. However, it should be noted that this value reflects an extraordinary event that benefited this indicator by 2.9 million euros. In this way, EBITDA derived from current activities in 2020 stood at 3.1 million euros, corresponding to an EBITDA margin of 15.3%.
Nevertheless, the net result recorded for the year was negative 1.06 million euros compared to the positive 49 thousand euros recorded a year earlier. A result that derives from an extraordinary adjustment from previous years, namely impairments amounting to 3.3 million euros and taxes. Excluding this effect, net income would have stood at over 2.2 million euros.
The IT Outsourcing segment had a reduction in its income due to 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 result of the aforementioned operational adjustment measures, there was an improvement in EBTIDA and the EBITDA margin was achieved.
Income from the IT Consulting segment contracted more sharply, also as a result of a reduction in demand. Reditus managed, however, to improve the profitability indexes of operations with EBITDA standing at 1.4 million euros and the EBITDA margin at 39.8%, an increase of 33.5% and 33.4 p.p. respectively compared to the same year.
On the other hand, the BPO segment saw its income grow by 20.0%, to 12.6 million euros. Also in this segment, Reditus improved EBITDA and EBITDA margin by reaching 2.3 million and 18.6%, respectively. These results represent a very significant improvement in operations by reaching growth rates of 331.5% and 13.4 p.p., respectively.
Income from the international area of Reditus shows an expected reduction in relation to the previous year, which is reflected in its weight in the group's global operating income. With a turnover of more than 5.5 million euros, the businesses carried out by Reditus across borders represented 24% of total income. The positive evolution of the pandemic and the conditions of international circulation have already allowed the reversal of the decisions to postpone the various strategic investments of our customers, so that Reditus is already working on several of these projects. These facts lead us to maintain our commitment to other geographies, namely in the development of long-term projects in the area of ITC and ITO.
For 2021, despite the continuation of some uncertainty resulting from the global public health problem, it should be noted that new challenges and opportunities have begun to emerge for which the Group is prepared, in view of the new demands of its customers, so it expects to positive growth with the contracting and “kick-off” of some large and strategic projects, which had already been awarded or in the final stages of contracting, both in the national and international markets. These new opportunities have materialized at the end of 2020 and in the first quarter of the current year, and Reditus, in addition to realizing them, will continue to actively seek opportunities in Nearshore projects.
The so-called “European bazooka” will also boost the realization of several structuring projects in Public Administration that Reditus wants to be part of. Simultaneously, the continuation of the path of digitalization of the economy, inside and outside the sphere of the State, and the evolution of Brexit will bring new business opportunities in all segments of activity.
In a very difficult year for the economy in general, as well as for families and companies in particular, Reditus is pleased with the results obtained, the result of a capacity to react to adversities and the search for new opportunities. We believe that the future will continue to present good opportunities in all activity segments, which will allow us to continue to create more jobs and maintain our commitment to improving management ratios, without losing our principles of civic responsibility, developing actions and supporting Organizations in the social area.
This administration believes that the post-pandemic period will bring a natural increase in economic activity supported by new business and operating models for our customers, both nationally and internationally. Aware of the consequences of this new reality, Reditus will continue to focus on opening new markets and embracing new business opportunities in all its activity segments.
We are sure that these results are also the result of the trust placed by shareholders in the management team and the commitment and dedication of our employees, who had the ability and willingness to adjust efficiently to a new reality, allowing us to continue to offer the market excellent services and solutions, despite the clear impacts on their personal and family lives. To all we want to express our gratitude
The Board of Directors