BMIT Technologies p l c : Interim Financial Statements 2022

COMPANY ANNOUNCEMENT

The following is a Company Announcement issued by BMIT Technologies p.l.c ("the Company") pursuant to the Capital Markets Rules as issued by the Malta Financial Services Authority in accordance with the provisions of the Financial Markets Act (Chapter 345 of the Laws of Malta) as they may be amended from time to time.

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In a meeting held earlier today, the Board of Directors of the Company approved the attached Group Interim Unaudited Financial Statements for the six-month period ended 30th June 2022.

The Interim Financial Statements are also available for viewing on the Company's website through the following link:

https://www.bmit.com.mt/wp-content/uploads/2022/08/BMITT-FS-June-2022.pdf

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Dr. Francis Galea Salomone LL.D.

Company Secretary

5th August 2022

BMIT Technologies p.l.c.

Condensed Consolidated

Interim Financial Statements

For the period 1 January 2022 to 30 June 2022

Company Registration Number: C 48299

BMCL: Public

BMIT Technologies p.l.c.

Condensed Consolidated Interim Financial Statements

For the period 1 January 2022 to 30 June 2022

Contents
	Pages
Directors' Report pursuant to Listing Rule 5.75.2	1 - 3
Condensed Consolidated Interim Financial Statements:
Condensed Consolidated Interim Statement of Financial Position	4
Condensed Consolidated Interim Statement of Comprehensive Income	5
Condensed Consolidated Interim Statement of Changes in Equity	6
Condensed Consolidated Interim Statement of Cash Flows	7
Notes to the Condensed Consolidated Interim Financial Statements	8 - 13
Statement pursuant to Listing Rule 5.75.3	14
Independent Auditor's Report on Review of Condensed Consolidated
Interim Financial Information

BMCL: Public

BMIT Technologies p.l.c.

Condensed Consolidated Interim Financial Statements

Directors' Report pursuant to Listing Rule 5.75.2

As at 30 June 2022

This Half-Yearly Report is being published in terms of Chapter 5 of the Listing Rules of the Listing Authority - Malta Financial Services Authority and the Prevention of Financial Markets Abuse Act, 2005. The Half-Yearly Report comprises the reviewed (not audited) condensed consolidated interim financial statements for the six months ended 30 June 2022 prepared in accordance with International Financial Reporting Standards adopted by the EU for interim financial statements (International Accounting Standard 34, 'Interim Financial Reporting'). The condensed consolidated interim financial statements have been reviewed in accordance with the requirements of ISRE 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. The comparative statement of financial position has been extracted from the audited financial statements for the year ended 31 December 2021.

Principal activities

The Group offers its customers a range of data centre and hosting services, public, private and hybrid cloud services and managed IT services - which can be offered at customer premises, hosted at any of BMIT Technologies p.l.c. (BMIT Technologies) subsidiaries' data centres, or integrated with services offered by other services providers - thereby scaling the solutions from the desktop to the data centre and into the cloud.

The Group proudly delivers its services to over 500 corporate customers from various industries including online gaming, financial services, ICT, manufacturing, media, transportation, retail and hospitality. BMIT Technologies Group's scale and range of customers, partnerships with leading technology players and its employees' technology certifications enable it to obtain a proficient understanding of the business, technology and also regulatory requirements, as and where applicable.

Review of financial performance

During the six-month period ending 30 June 2022, the Group generated revenue amounting to €12.6 million compared to €12.8 million in the first half of 2021. This marginal decline of just over 1% was a result of a steady but challenging performance, characterized by increased technological and competitive pressures, customer and project delays, as well as by global issues with hardware lead times.

The Group has continued to secure new customers and revenues but technology evolution and the very nature of a cloud-driven business, is having an impact, as expected, on the contribution per customer. This lower contribution is being partially offset by our legacy data centre business, which business to-date is still relatively strong and profitable.

Notwithstanding these challenges, and despite the prevailing micro-economic environment, following a pandemic, with escalating costs, supply chain issues, as well as a global shortage in adequately skilled human capital, the Group has managed to register a relatively positive performance, driven by increased sales focus on cloud and managed services.

The marginal drop in revenue this year, resulted in a similar reduction in the cost of sales which decreased from €6.8 million to €6.6 million, preserving Gross Profit margins at 48%. The Group continued to benefit from savings in the cost of power, which resulted from eco-friendly measures implemented earlier, in late 2021.

Due to the lifting of Covid restrictions, certain activities such as travelling, participation in marketing events and staff welfare activities, resumed. This increased activity resulted in a marginal increase in Administrative expenses from €1.6 million to €1.7 million.

The slight drop in revenue and increase in costs resulted in a reported Earnings before interest, tax, depreciation and amortisation (EBITDA) for the first six months of 2022 of €5.4 million compared to €5.7 million last year. The next table shows the computation of EBITDA, after the elimination of depreciation and amortisation charges from costs.

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BMCL: Public

BMIT Technologies p.l.c.

Condensed Consolidated Interim Financial Statements

Directors' Report pursuant to Listing Rule 5.75.2

As at 30 June 2022

	Six months	Six months
	ended	ended
	30 June 2022	30 June 2021
	€'000	€'000
Revenue	12,647	12,815
Cost of sales	(6,619)	(6,756)
Administrative expenses	(1,685)	(1,579)
Add back depreciation and amortisation charges	1,038	1,178
EBITDA	5,381	5,658
EBITDA margins	42.54%	44.15%

The Group recorded a Profit Before Tax of €4.2 million compared to €4.4 million last year. Profit After Tax for the six-month period was €2.6 million compared to €2.7 million last year.

Review of financial position

As at 30 June 2022, the Group's total assets amounted to €23.9 million (31 Dec 2021: €25.5 million),

of which €6.9 million (31 Dec 2021: €7.7 million) were current assets.

Total liabilities as at 30 June 2022 were €15.5 million (31 Dec 2021: €14.7 million), of which €8.9 million

(31 Dec 2021: €8.0 million) were current liabilities. The Group kept the same level of borrowing.

Outlook

The impact of the pandemic and the war in Ukraine on the state of global, and especially European, economies is yet uncertain, and we still have to understand the short to medium term impact any downturn may have on the Maltese economy and our customers, as well as on existing and future investments.

At the same time, Malta's removal from the grey-listing is certainly positive and we remain optimistically cautious for a timely resolution to the full restoration of Malta's reputation internationally.

As had been forecasted in the business planning process for 2022, the market is rapidly evolving on the lines of challenging trends, driven by pervasive technological and economic market considerations. The continued and more aggressive migration to cloud at the detriment of our data centre business, together with continued competition from large scale international cloud providers, is a reality and anticipated.

The key trend therefore, to prevail in the short to medium term, will be the accelerated pace at which this migration will take place, and which reality will continue to drive the Group's increased focus on cloud and managed services.

Of course, the above focus is parallel to our continued investment in our infrastructure and in strengthening our position as one of Malta's leading technology platforms and solutions providers. We are exploring opportunities that will leverage our expertise in managing mission-critical technology and infrastructure and continue strengthening our diversification plans, both in terms of offering and customers. As stated in previous communications, our objective for market expansion within and beyond our Maltese shores remains a priority in support of our strategies. The Group remains committed to pursue a well-managed investment programme to help achieve sustainable business growth and long-term return to our shareholders.

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BMCL: Public