Asseco Poland announces approved merger and Q3 results

Earlier this month, Polish IT house Asseco Capital Group announced its Q3 results. Sales were up 55% on Q3 2005 at Zl 76.8 million (€20.2 million), with an EBIT margin of 18.9%. Net profits of Zl 31.3 million (€8.2 million) were up 397% on Q3 2005.In the first nine months of 2006 Asseco had sales revenues of Zl 230.5 million (€60.6 million), up 80%, an EBITDA margin of 19.6% and net profits of Zl 46.3 million (€ 12.2 million), up 192% year-on-year. This compares to Softbank SA's sales of Zl 356.2 million (€93.7 million), up 30%, an EBITDA margin of 12% and net profits of Zl 45.8 million (€12 million), up 41% year-on-year.

Comment: On the same day that Asseco published its financials, a general shareholder meeting took place where Softbank SA and Asseco Poland shareholders approved the merger of the two companies and appointed the supervisory board. The new entity will operate under the 'Asseco Poland' name. Adam Góral will remain president and CEO of Asseco. As of Q1 2007, both companies will be consolidated.The merged company with combined sales estimated by Asseco to be €247 million in 2006 will be the number three indigenous Polish IT player after Prokom Group (with around €514 million sales in 2006) and ComuterLand/Emax (around €39 million sales in 2006). However, in the banking sector, this move will make Asseco the number one software provider for the Polish banking sector, with combined sales of €91 million in 2005, followed by ComuterLand/Emax with €71 million and Bazy Systems with €23 million in the same period (figures provided by Asseco). Asseco's plans do not stop at the Polish border, though. With the merger approved and financials in place, Asseco will now implement its internationalization strategy with a string of acquisitions planned for Central and Eastern Europe. It will set up Asseco Czech, which is to be listed on Warsaw Stock Exchange next year, by buying two additional companies besides the Czech firm PVT, which it already owns. Asseco Slovakia will be strengthened via two supplementary acquisitions and, in addition, it will buy a stake in a Russian IT firm to form a joint venture. Asseco has further plans to establish Asseco Balkans, which will be operating in Romania and Serbia as of next year. In the longer term, Asseco aims to expand into Western Europe. Asseco will announce further details on its acquisitions in mid-December.

Source: By Cornelia Wels-Maugm ovum.com