Board commentary
The first six months of 2023 were difficult for us. We were forced to abandon several planned activities, and therefore the results also fell short of the set expectations. However, despite the difficulties, we still managed to set a group-wide sales record. However, we have not lost hope and are aiming to break even by the end of the year. To do this, we have changed our strategy, focusing more on profit than growth. At the end of the second quarter, we reached zero with the break-even point, which shows that our strategic decisions are beginning to bear fruit.
From the second half of 2022, we prepared to raise additional funds in the Latvian market, which is our second largest market. However, the uncertainty and pessimism in the financial market at the beginning of 2023 forced us to adjust our plans and cancel the planned additional investments in marketing and the platform.
At the end of the first quarter, in cooperation with Trinidad Wiseman OÜ (TWN) and under the leadership of our former board member, Andres Lüiste, we came up with a completely new platform and web design. The launch of the new platform turned out to be full of challenges, leading to more technical problems in the operation of the system than expected, which also left a negative mark on the results of the II quarter (mainly April). In the close cooperation between TWN and the Punktid team, they immediately started to eliminate the discovered errors. The problems that were gradually fixed during the spring also stabilized the results.
Since January, we have been focused on the positive direction of the company's cash flow, reducing the number of services purchased and reducing the size of the team. However, the problematic second quarter had an impact on the company's liquidity, and the company's manager and major owner, Hannes Niid, was forced to give the company a EUR 90,000 loan. By the end of the first half of the year, the loan balance had dropped to EUR 81,000. By the end of the second quarter, sales and expenses stabilized, thereby creating an opportunity to achieve positive cash flows in the future.
Due to reduced marketing efforts and team size, management sees that previous forecasts for 2023 may no longer be met, but we have prepared updated forecasts that are more realistic. We plan to handle EUR 2.1 million worth of goods, including platform turnover of EUR 1.3 million and wholesale turnover of EUR 0.8 million.
We will continue our commitment and efforts to restore profitability and financial stability.
We thank our investors for their trust and support.
Key financial ratios
| 30.06.2023 | 30.06.2022 | |
| Operating profit before depreciation (EBITDA) | €-63 031 | €-224 162 |
| Operating profit (EBIT) | €-85 687 | €-232 589 |
| Operating profit margin (operating profit / sales revenue) | -15.9% | -50.28% |
| Short-term debt coverage ratio (current assets / short-term liabilities) | 1,38 | 5,93 |
| Assets to equity ratio (assets / equity) | 1,43 | 1,17 |
| Return on equitly (ROE) | -18% | -29% |
| Return on Assets (ROA) | -13% | -25% |
Consolidated statement of financial position
(in Euros)
|
|
30.06.2023 | 30.06.2022 | Note nr |
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | 21 152 | 591 313 | |
| Financial investments | 0 | 199 | |
| Receivables and prepayments | 37 560 | 21 923 | 2 |
| Inventories | 219 222 | 175 760 | 3 |
| Total current assets | 277 934 | 789 204 | |
| Non-current assets | |||
| Property, plant and equipment | 47 088 | 23 545 | 6 |
| Intangible assets | 351 549 | 125 241 | 7 |
| Total non-current assets | 398 637 | 148 786 | |
| Total assets | 676 571 | 937 990 | |
| Liabilities and equity | |||
| Liabilities | |||
| Current liabilities | |||
| Loan liablities | 98 086 | 9 750 | 8 |
| Payables and prepayments | 102 880 | 123 358 | 9 |
| Total current liabilities | 200 966 | 133 108 | |
| Non-current liabilities | |||
| Loan liablities | 3 279 | 1 528 | 8 |
| Total non-current liabilities | 3 279 | 1 528 | |
| Total liabilities | 204 245 | 134 636 | |
| Equity | |||
| Equity held by shareholders and partners in parent company | |||
| Share capital | 214 982 | 214 982 | 10 |
| Share premium | 983 260 | 983 260 | |
| Own shares | -1 | -1 | |
| Retained earnings (loss) | -639 019 | -158 493 | |
| Annual period profit (loss) | -86 896 | -236 394 | |
| Total equity held by shareholders and partners in parent company | 472 326 | 803 354 | |
| Total equity | 472 326 | 803 354 | |
| Total liabilities and equity | 676 571 | 937 990 |
Consolidated income statement
(in Euros)
|
01.01.2023 30.06.2023 |
01.01.2022 30.06.2023 |
Note nr | |
| Revenue | 536 479 | 462 575 | 11 |
| Other income | 564 | 513 | |
| Capitalized self-constructed assets | 39 564 | 0 | |
| Goods, raw materials and service | -411 320 | -368 437 | 12 |
| Other operating expenses | -119 955 | -196 201 | 13 |
| Labor expense | -107 933 | -122 128 | 14 |
| Depreciation and impairment loss | -22 656 | -8 427 | 6,7 |
| Other expenses | -430 | -484 | |
| Operating profit (loss) | -85 687 | -232 589 | |
| Interest expenses | -1 211 | -3 682 | |
| Other financial income and expenses | 2 | -123 | |
| Profit (loss) before tax | -86 896 | -236 394 | |
| Annual period profit (loss) | -86 896 | -236 394 |
Consolidated statement of cash flows
(in Euros)
| 01.01.2023 30.06.2023 |
01.01.2022 30.06.2022 |
|
| Cash flows from operating activities | ||
| Operating profit (loss) | -85 687 | -232 624 |
| Adjustments | ||
| Depreciation and impairment loss (reversal) | 22 656 | 8 427 |
| Profit (loss) on sale of fixed assets | -191 | 0 |
| Other adjustments | 334 | -123 |
| Total adjustments | 22 799 | 8 304 |
| Changes in receivables and prepayments related to operating activities | 45 923 | -2 700 |
| Changes in inventories | -20 491 | -61 285 |
| Changes in payables and prepayments related to operating activities | -54 601 | 40 975 |
| Total cash flows from operating activities | -92 057 | -247 330 |
| Cash flows from investing activities | ||
| Purchase of property, plant and equipment and intangible assets | -116 771 | -16 260 |
| Disposal of fixed assets | 7000 | 0 |
| Interest received | 0 | 6 |
| Total cash flows from investing activities | -109 771 | -16 254 |
| Cash flows from financing activities | ||
| Loans received | 90 500 | 0 |
| Repayments of loans received | -9 000 | -24 174 |
| Change in overdraft balance | 15 000 | -10 593 |
| Repayments of finance lease liabilities | -1 348 | -1 379 |
| Interest paid | -1 211 | -3 682 |
| Received from the issue of shares | 0 | 868 701 |
| Total cash flows from financing activities | 93 941 | 828 873 |
| Total cash flows | -107 887 | 565 289 |
| Cash and cash equivalents at beginning of period | 129 039 | 26 154 |
| Change in cash and cash equivalents | -107 887 | 565 289 |
| The effect of changes in foreign exchange rates | 0 | -130 |
| Cash and cash equivalents at end of period | 21 152 | 591 313 |
Consolidated statement of changes in equity
(in Euros)
| Equity held by shareholders in parent company | |||||
| Share capital | Share premium | Own shares | Retained earnings(loss) | Total | |
|
Restated balance 31.12.2021 |
195 390 | 134 151 | -1 | -158 492 | 171 048 |
| Annual period profit (loss) | 0 | 0 | 0 | -236 429 | -236 429 |
| Issued share capital | 0 | 776 063 | 0 | 0 | 776 063 |
| Changes in ohter contributions from owners | 19 592 | 73 046 | 0 | 0 | 92 638 |
| 30.06.2022 | 214 982 | 983 260 | -1 | -394 921 | 803 320 |
| Restated balance 01.01.2023 | 214 982 | 983 260 | -1 | -639 019 | 559 222 |
| Annual period profit (loss) | 0 | 0 | 0 | -86 896 | -86 896 |
| 30.06.2023 | 214 982 | 983 260 | -1 | -725 915 | 472 326 |
Contacts for additional information
Hannes Niid
Management Board Member of Punktid Technologies AS
E-mail: invest@punktid.com