ELKO Group Interim Report 1H
According to the unaudited consolidated financial results for January-June 2016, ELKO Group has achieved revenue growth by 5% year-on-year, showing 542 million USD (485 million EUR) revenues compared to 514 million USD (461 million EUR) in 2015. ELKO Group growth is based on devoted efforts to improve corporate governance processes, as well as finding and developing profitable products and services segments.
IT industry market volume affected by CIS region's economic situation is shrinking. ELKO Group sales in the CIS region decreased by 23%, reaching 238 million USD (213 million EUR). In turn, in the Baltic States, despite stagnant IT industry, ELKO Group managed to increase its turnover by 18%, reaching 49 million USD (44 million EUR). ELKO significant growth continues to show in Central and Eastern Europe, where revenues increased by 57%, reaching 255 million USD (228 million EUR).
Profitability remains at a good level. Gross profit amounted to 25 million USD (23 million EUR), the gross profitability of ~ 4.7%.
By attracting new employees, administrative and selling expenses, in a line with the budget have increased by 1.8 million USD (1.6 million EUR).
ELKO financing costs increased by approximately 4% year-on-year, caused by high Russian ruble financing costs, increase of cost on loans from European banks as well as by effect of high yield bond issuance.
6-month period closed with 4.3 million USD (3.9 million EUR) in net profit, which is less compared to the exceptionally high rates in the first half of 2015, which amounted to 8.7 million USD (7.8 million EUR).
The Group's stability and ability to work successfully in challenging market conditions is evidenced by confidence of ELKO long-standing financial partners - Nordea, SEB and Swedbank who has prolonged the syndicated loan for current assets funding and with OP Corporate Bank joining in, the total loan was increased, reaching 78 million USD (70 million EUR).