The software development firm Witted Megacorp publicly disclosed their financial statements of the previous year as well as the financial data for the final quarter of the year, from October to December.
The disclosed figures show a decrease in the firm’s net sales, which dropped to 16.0 million euros in the final quarter of the year, compared to 16.5 million euros in the corresponding period of the preceding year.
The Ebita result, after adjustments for non-recurring items, stood at 0.4 million euros, showing growth from the 0.2 million euros recorded a year prior. The reported Ebita, however, remained unchanged at 0.2 million euros, identical to the figure from the previous year’s corresponding period.
Ebita is a measure of a company’s operating profit, exclusive of amortization of intangible assets.
The earnings per share came to EUR 0.02, showing an increase from EUR 0.01 a year prior. However, the earnings per share for the full year weakened by EUR 0.10, resulting in a loss, which was greater than the loss of EUR 0.04 seen in the preceding year. In light of the financial performance, the company’s board has proposed that no dividend will be distributed for the year 2023.
There is no broad consensus earnings forecast available for Witted Megacorp. However, Inderes had predicted the company’s turnover for the October-December period to be 16.3 million euros, and the adjusted Ebita result to be 0.3 million euros.
Alongside the announcement of the financial results, Witted Megacorp also disclosed its new financial goals and updated its policy on financial disclosures. The company will no longer provide specific financial guidance for accounting periods in the future. Instead, it will start publishing monthly business reviews.
Going forward, Witted Megacorp has set a target of achieving an adjusted Ebita result of eight percent in its Finnish operations. For its operations in other countries, the target is to achieve a positive adjusted Ebita.
A Positive Turnaround at the Year-End
The company’s Managing director Harri Sieppi stated in the financial statement release that Witted Megacorp had previously received a large number of tender requests and had to make strategic decisions in 2022 about which requests to respond to.
“Regrettably, this strategy presented a challenge when the demand declined in 2023, leaving our organization unprepared. In the past, our biggest challenge was to assemble the right team and experts to execute clients’ projects. With the decline in demand, our challenge shifted to sales and securing new projects”, Sieppi explained in the press release.
“Witted’s DNA is deeply rooted in growth, but we have had to temporarily scale back our growth investments and focus on enhancing profitability. Change is never easy. Going from full speed to first gear can cause a strong engine brake and startle fellow passengers. However, this shift was critical in 2023.”
“In 2023, Witted embarked on a journey of change where we gained valuable insights and worked tirelessly: we restructured around the customer, held change negotiations, bolstered our sales, and eliminated unnecessary elements. The positive impact of these changes was evident in Q4, which was the most profitable quarter of the year”, Sieppi concluded.