The I quarter of 2016: turnover increased by 19% and the net profit… by 1568% as compared to the previous year
While a year ago TIM Capital Group announced the first net profit in three years at a symbolic level of PLN 234 thousand, the I quarter of 2016 brought concrete, reaching PLN 4.5 million individual and consolidated net profit.
The Group’s revenues from sales increased to PLN 147.4 million (by 19.2% y/y) while TIM SA – up to PLN 135.2 million (by 17.9%). The share of e-commerce in the turnover of TIM SA amounted to almost 73% as compared to 63% in the I quarter of 2015.
The figures confirm that the hybrid sales model – with the dominant share of online trading without the network of branch offices with local warehouses (which have been replaced by sales offices) implemented in 2013 – has brought positive effects.
Becoming independent of the construction industry
Operating profit in TIM SA exceeded PLN 5 million (as compared to PLN 151 thousand of loss in the I quarter of 2015), while in the TIM Capital Group it amounted to PLN 4.96 million (PLN -88 thousand in the previous year).
– Seasonality of sales occurring in the construction sector is having less and less impact on our results, which is confirmed by the lowest loss on sale in the I quarter since 2008 (PLN 264 thousand TIM SA and PLN 155 thousand TIM Capital Group). And it was the fact of being dependent on seasonality and economic fluctuations in the construction industry that constituted one of the main objectives of our strategy since 2013, whose adoption resulted in the change of TIM’s business model – says Krzysztof Folta, the President of the Management Board of TIM SA.
In the I quarter of 2016 TIM SA recorded an almost 20 percent increase in operating costs, however it was a one-off event and was primarily the result of costs associated with the expansion of the existing warehouse automation system in the logistics centre in Siechnice near Wrocław. In turn, the total cost at the level of 15.17% of the revenues from sales may be considered the herald of the further drop in the percentage of costs to revenues in the future.
– Basing the business activity on e-commerce requires continuous increase of efficiency and optimization of processes of us, particularly in the area of logistics. Investments in this regard and the associated costs increase our operational efficiency and make us more competitive. And this will certainly intensify attractiveness of the TIM’s offer in the eyes of the customers and will translate into our results – says Krzysztof Folta.
TIM SA strengthens also the market leader position in terms of the range of the electrotechnical offer available online and sent to the customer within 24 hours of placing an order. The number of products immediately available, which is those permanently in stock at the end of the I quarter of 2016 was 1/3 higher than at the end of the I quarter of 2015 (an increase from 50.3 to 66.9 thousand).
TIM Capital Group is growing bigger
This is not the end of logistic changes in TIM SA. 3LP SA with its registered office in Siechnice was formed at the end of the I quarter of 2016, however the company had not started its operation then. Its business object will be the provision of logistics services, including storage and warehousing of goods in the logistics centre in Siechnice. This facility, after the expansion which is scheduled to be completed in summer 2016, will provide services not only for TIM SA but for other non-GK TIM [TIM Capital Group] entities operating in the e-commerce sector. 100% of shares in 3LP SA is owned by TIM SA. Registration of the company in the National Court Register took place on 10 May 2016.
Companies, other than TIM SA, and belonging to GK TIM brought in the I quarter of 2016 8.3% of the entire Group’s revenues from sales. – We are expecting an increase of the share of subsidiaries in the Group’s turnover in the III quarter of 2016 and a significantly greater influence not earlier than next year and in the years to come – says Krzysztof Folta.