Keeping costs down while sales recover in major areas has helped lift margins, particularly in Russia
Distributor ASBIS has reported a 37% growth in net profit after tax and a 17% growth in revenues, counting year-on-year, during the first quarter of the year. The company says the results were helped thanks to its strategy aimed to improve margins while keeping expenses under control.
Although sales across the Central and Eastern Europe and Western Europe was down by 8% and 7%, respectively, the company said that a more detailed country-by-country analysis would paint quite a different picture.
The company said it benefited from a continuous improvements sales in Russia, Ukraine, Kazakhstan and Belarus which all grew by 88%, 86%, 164% and 36%, respectively.
At the same time, sales in Slovakia was 27% lower, year-on-year, however it was offset by a 21% increase in the Czech Republic, 17% increase in Romania and 7% increase in Hungary.
The overall decrease across the MEA region of 17% was attributed mostly to the slow-down in the North Africa region comparing to the prior year during which the company serviced large projects across this market, it said.
In Q1 Asbis also experienced a drop in HDDs sales of 6.33% which was compensated by a 185% growth in sales of SSDs, the company said.
Laptop sales went up by 16% y/y while sales of tablets grew by 32%. At the same time, sales of smartphones grew by 45%, driven by an improvement in iPhones figures, and became number one in the company’s segment product portfolio.
As far as other product lines were concerned , the company saw a positive trend for Q1 2017 in motherboards and VGA cards (+34.26%), PC desktop (+22.87%), peripherals (+65.77%), display products (+38.89%), memory modules (+102.48%), accessories and multimedia (+74.87%) and flash memory (+13.49%).
“In Q1 2017 we started to benefit from improved position in our major markets, that we won by supporting our customers in tough times. We have also noticed some improvement in overall consumer sentiment. As a result, our revenues in FSU almost doubled after a strong growth in all major countries of the region. Having seen this growth, we have decided to invest more in these markets and benefit from market revival. This has triggered a growth in expenses though. However, the pace of this growth was slower than the pace of growth in revenues and gross profit. As a result, profitability grew at all levels,” says CEO and Chairman of ASBISc Enterprises Plc, Siarhei Kostevitch.
“We expect this positive trend to continue in the next quarters, although we need to remember that Q2 usually is the slowest period of the year. We expect to realize the majority of our forecasted profits, as usual, in the second half of the year. Meanwhile, we work on keeping gross profit margins high enough so we benefit from any improvement in demand in our major markets,” he said.