OTT-ONE closes the first half of the year with a revenue of nearly HUF 7 billion
OTT-ONE Plc. achieves its highest operating revenue of almost HUF 7 billion in the first half of the year, which is nearly HUF 5.5 billion higher than in the same period of last year, states the company’s business report published on the Budapest Stock Exchange. During the first half of the year, the company successfully adapted to the changed market conditions, and carried out a large-scale profile cleaning, which helps to focus on the company’s core activities and ensure successful operation in the long run.
Listed in the Standard category on the Budapest Stock Exchange, OTT-ONE Plc. has published its business report for the first half of 2020. According to the statement, the company achieved the best sales revenue of its operation so far in the first half of the year, which increased four times the value of the first half of 2019, to almost HUF 7 million.
Sales of healthcare products accounted for 70% of the nearly HUF 5.5 billion increase in the income. The company’s EBITDA (earnings before interest, taxes, depreciation and amortization) was HUF 123 million in the first half of the year, and its pre-tax profit was HUF 727.000. The latter results were largely determined and shaped by the fact that in the first half of the year the company reviewed its current operations and future opportunities and decided to discard and devalue certain self-developed assets as they do not fit into the company’s core business and the association does not intend to deal with them in the future. The write-down of assets totalling HUF 167 million, without which the operating profit for the first half of 2020 would have reached HUF 50 million, was made possible by the favourable financial result. At the same time, profile cleansing strengthens the company in the process of prioritizing its core activities as well as effectively operating its focus areas.
The coronavirus pandemic that spread to Hungary during spring as well, affected all industries, however the unusual situation did not influence negatively the core activities of OTT-ONE, and in fact, the number of inquiries increased in some areas, as well as capacity requirements. During the spring wave of the pandemic, the company signed agreements with two state actors, the Ministry of Foreign Affairs and Trade and the National Healthcare Service Center worth a total of more than HUF 12,4 billion. While the equipment and ventilators manufactured for the Ministry of Foreign Affairs and Trade have been delivered, the order made by the National Healthcare Service Center will be fulfilled in the second half of the year, which will increase OTT-ONE’s income in 2020 by HUF 7,7 billion.
OTT-ONE has also reached several other milestones in the first half of the year, of which the company’s research and development project based on artificial intelligence stands out, with a total cost of more than HUF 662 million. The name of the project is “Surface Anomaly Detection (SAD)” – identification of foreign objects in protected areas and critical routes. The number of inquiries has increased in some business lines, partly due to the appearance of new practices – such as teleworking- as a result of the coronavirus. As part of this, fulfilling an order of more than EUR 400.000, OTT-ONE sold its self-developed online education platform, which offers the possibility of online distance learning, in Croatia in March 2020.
One of the most significant events outside the reporting period was the start of the expansion of the server center, which has been operating since December 2019: at the beginning of July, the company decided to expand its server capacity worth nearly EUR 2 million.
From a perspective of its presence on the capital market, it was a significant event that OTT-ONE joined the market development program offered by the Budapest Stock Exchange, within the framework of which MKB Bank Plc. started to prepare the research of the company shares.
This year also posed a number of challenges for OTT-ONE, but at the same time, the company has adapted extremely well to the changed circumstances, as a result of which it has extablished itself in new areas in addition to its core business. Although profile cleansing has had a negative impact on the half-year figures, it will clearly help growth in the long run.
In the future, OTT-ONE Plc. will primarily continue to develop innovative market solutions and products in the fields of IT security, security technology, as well as streaming, artificial intelligence solutions and custom software.
Its operation can still be divided into the following segments: video-based content service (streaming business), IT security (security business), the development and operation of online education platforms and custom softwares.
These activities are planned to be complemented by trade with various healthcare products and the provision of services related to healthcare products.
OTT-ONE Plc.’s business milestones in the first half of 2020:
- In February 2020, the company won a grant of more than HUF 300 million in the „Vállalatok K+F+I tevékenységének támogatása” tender, and at the same time started a project to research and develop artificial intelligence technology.
- Also in February, after working together since the middle of last year, the latest version of the mobile application called iCsekk, developed jointly with Díjbeszedő Informatikai Ltd. was handed over.
- Fulfilling an order of more than EUR 400,000, OTT-ONE sold its self-developed online education platform, which offers the possibility of online distance learning, in Croatia in March 2020.
- At the end of March, in a state of emergency caused by the coronavirus epidemic, the company signed contracts for the production and delivery of about 500 ventilators through its Chinese partners and signed a multi-billion forint agreement with the Ministry of Foreign Affairs and Trade. Subsequently, an agreement was also reached for the production and supply of protective masks.
- At the beginning of April, OTT-ONE sold a software package worth of HUF 290 million consisting of corporate governance and security software to a customer in Hungary.
- In the first half of 2020, several personnel changes took place in the management of OTT-ONE Plc .: in March, dr. Zsolt Nemeskéri and dr. Réka Szabó-Kovács were elected as a member of the Supervisory and the Audit Committee. In April dr. Péter Pozsgay became a member of the Board of Directors, and the Supervisory and Audit Committee was expanded with the person of Tibor Norbert Farkas. The latter, however, is doing work on the Company’s business collaborations in China, which is incompatible with the activities of the committee, and has therefore been removed from office in early May.
- Also this month, a cooperation agreement was signed with the Budapest Stock Exchange’s educational subsidiary, the Budapest Institute of Banking Zrt. (BIB), on the use of OTT-ONE’s online education platform for remote students of the educational institution. Under the agreement, which runs until January 1, 2021, online participation in courses will also be possible for students who are unable to attend in person.
- In April, the company signed a contract with the National Healthcare Service Center for the ordering of another 300 ventilators and 3 million medical masks, amounting to approximately HUF 7.7 billion.
- In June, OTT-ONE sold a new, partly self-developed, complex video encryption software system worth HUF 510 million to its Hungarian partner.