Tecnotree, a global provider of IT solutions for the telecom industry, has reported an operating profit of 7.9 million euros. This performance surpassed the expectations of Inderes, the company’s successor, which had predicted an operating profit of 5.5 million euros. During the same period in the past, Tecnotree achieved an operating profit of 6.1 million euros.
However, the company’s net earnings for the financial year dropped by 26 percent, totaling 2.4 million euros. This decline was primarily attributed to losses incurred from exchange rate fluctuations.
Tecnotree’s CEO, Padma Ravichander, stated that a significant portion of the exchange rate losses were caused by the depreciation of the Nigerian currency and hyperinflation in Argentina. To combat these issues, the company is renegotiating contracts with its clients in these regions to secure better exchange rates. Furthermore, Tecnotree is in ongoing negotiations with leading global banks for currency hedging and swap arrangements. The company is also expanding into developed markets to ensure financial stability and generate steady cash flow.
Tecnotree reported a turnover of 22.2 million euros, slightly below Inderes’ forecast of 22.5 million euros. In the same period in the past, the turnover stood at 20.1 million euros.
The company’s order backlog grew significantly by 16 percent, increasing to 80 million euros from 69 million euros.
The company’s cash flow from operations was 4.7 million euros, a substantial improvement from the 0.6 million euros reported in the comparative period. The company’s treasury had 20.8 million euros in cash, compared to 12.3 million euros in the same period last year.
By the end of 2023, Tecnotree’s trade receivables amounted to 32.9 million euros, a decrease of 13 percent from the comparative period. In the second half of the year, the company collected 21.1 million euros for compulsorily convertible debentures (CCD).
As anticipated, Tecnotree will not be paying out a dividend from the previous year’s earnings.
For the current year, Tecnotree anticipates a growth in turnover between 2–7 percent compared to the previous year. The operating profit is also expected to rise by 7–15 percent. Exchange rates are projected to remain at their current levels.
Tecnotree’s primary objective continues to be the enhancement of license income and the transition from the project delivery and license sales model to the income model of continuous annual invoicing. This shift will ensure better predictability and more stable quarterly turnover for the company. However, in the short term, this transition will impact the turnover, as per the company’s release.
This article will be updated with any new developments.
