The revenues of TIM Capital Group in the first half of 2017 5.8% higher y / y
The turnover of TIM Capital Group in the first half of 2017 amounted to PLN 328.57 million, i.e. nearly 6% more than in the previous year. Revenues from the sale of TIM SA increased by 3.8% y / y, to PLN 298.67 million. The situation in the construction industry is gradually improving, and 3LP SA – one year after taking over the management of the logistics centre in Siechnice near Wrocław – keeps acquiring new clients from outside the Group. Both the factors will also translate into the results of TIM Group.
The revenues of TIM SA from the e-commerce channel in the first half of 2017 amounted to PLN 214.45 million, which means an increase by 4.5% compared to the first half of 2016. The share of the online channel in the company’s turnover in the period from January to June 2017 reached 72%.
“The turnover dynamics of both the Capital Group and TIM itself is slightly below our expectations,” admits Krzysztof Folta, the President of the Management Board of TIM SA. “However, if we take into account the decrease in sales of power cables, which amounted to 20% in the first quarter and as much as 28% in the second quarter of 2017, we can see that we achieved a really good result,” he adds.
The situation in the industry
The growing dynamics of the construction and assembly production makes us really optimistic – in the first half of 2017 it amounted to 107.5% and in June alone increased by 11.6%. That is the reason for satisfaction, however, the president is a cautious optimist.
“Despite the good dynamics of the construction and assembly production, the real situation in the construction sector is not easy and I would expect that the positive impact on our results will become noticeable with a delay of several quarters. For now, the electric industry is still entangled in the price war, struggling with falling margins and changes of provisions related to VAT,” enumerates Krzysztof Folta.
Piotr Tokarczuk, a Member of the Management Board and the Financial Director of TIM SA, points out that the declines in cable sales translated into a positive effect on the level of gross margin generated by TIM SA, which increased from 15.8% in the first half of 2016 to 16.2% in the first half of 2017.
The PLN 3.63 million loss from operating activities of TIM Capital Group (in comparison to PLN 7.39 million profit in the first half of 2016) results from the cost of operations that increased by almost 8%. This is primarily the effect of 3LP SA, which on 1 July 2016 took over management of the logistics centre in Siechnice near Wrocław. The facility, after the expansion (from 10.000 to 40.000 sqm.), specializes in providing logistics services for companies operating in the sector of e-commerce, including entities outside TIM Capital Group. Since Q3 2016, the financial results of 3LP SA are consolidated with the results of the Group as a whole.
“The abrupt increase of the surface of the facility in Siechnice and its equipment in modern automation significantly increased its competitiveness on the market and, therefore, made it easier to acquire new customers. On the other hand, it caused an increase in logistics costs related to maintenance of the facility. 3LP, however, is gradually building a portfolio of external contracts which will improve the results of TIM Capital Group,” explains Piotr Tokarczuk, a member of the management board and financial director of TIM SA.
Within a few years, the share of revenues from customers from outside of TIM Capital Group is to reach 30-50% of the total revenues of 3LP SA. Currently, external customers are generating approximately 10% of the company’s revenues.