BMIT Technologies plc - Interim Results

On 6 August 2024, BMIT Technologies plc published its interim results covering the six-month period ended 30 June 2024.

Revenue rose by 12.8% to €16.7 million (H1 2023: €14.8 million) reflecting the €1.9 million additional income from managing the mobile network towers purchased from GO plc in December 2023. Meanwhile, revenue from the Data Centre, Cloud and Managed Services remained constant at €14.8 million as the 14% increase in Cloud and Managed services was offset by a decline in Data Centre turnover.

The company explained that cloud services offer a lower margin of returns than the traditional data centre business. As such,  the shift to the increased demand for cloud services is putting pressure on the Company’s profitability margins.

Operating costs increased by 12.6% to €11.9 million from €10.6 million in the previous year. The year-on-year change in costs is primarily driven by the rental fees of the sites hosting the mobile towers.

Operating profit for the period moved 13.4% higher to €4.84 million (H1 2023: €4.26 million).

Excluding depreciation and amortisation charges amounting to €1.8 million (H1 2023: €0.9 million), EBITDA rose by 27.2% to €6.61 million as a result of the contribution of the mobile towers. This translates into an EBITDA margin of 39.5% compared to 35% in the same period last year.

However, due to additional interest payments for loans taken out to finance the €46.6 million acquisition of the mobile towers, finance costs rose to €0.9 million from €0.11 million in the first half of 2023. After deducting a tax charge of €1.72 million, BMIT posted a net profit for the period of €2.21 million, 16% less than the €2.63 million reported during the corresponding period in 2023. The profit for the first six months of 2024 translates into an annualised return on equity of 45.4% (H1 2023: 61.9%).

The Statement of Financial Position as at 30 June 2024, when compared to the position as at 31 December 2023 shows that total assets dropped by 9% (or €6.7 million) to €74.0 million on the back of a reduction in trade receivables which was only partially offset by an increase in cash and equivalents. Similarly, total liabilities fell by 9.6% (or €6.7 million) to €63.2 million on the back of a reduction in payables. Meanwhile, total equity remained unchanged at €10.8 million as the €5 million dividend declaration for FY2023 (settled in the first half of 2024) was counterbalanced by the profit for the period under review as well as the increase in share capital and share premium following the creation of new shares in connection with the scrip dividend option.

Outlook

Commenting on the results, the Directors noted the significant changes in the market driven by technological advancements which resulted in a shift from data centres to the adoption of cloud services. In response, BMIT is implementing a strategy for long-term growth with the first move being the acquisition of GO’s passive mobile structure, which aims to diversify the Group’s business model and position it as a key digital infrastructure player, backed by long-term contracted revenues. Furthermore, the Group plans to strengthen its hybrid IT and cyber resilience operations. Additionally, during the first half of the year, BMIT started evaluating different opportunities to expand its business within and beyond Malta.