Mint of Poland delivers a strong and robust performance in FY 2020
Mint of Poland Group has released its consolidated annual report for FY 2020. Excluding one-off and extraordinary events, the result on sales increased by more than 230 percent in the reported period while EBITDA grew by nearly 125 percent year-on-year. At the same time, the Group’s net profit rose nearly five-fold, by close to 480 percent. Last year’s significantly higher results, as compared to 2019, are the product of the Group’s well-conceived strategy based on business diversification and the ability to seize arising market opportunities.
In FY 2020, the adjusted sales result reached PLN 82.5 million (vs. PLN 25 million in 2019), EBITDA amounted to PLN 100 million (vs. PLN 45 million in 2019) while net profit stood at PLN 66 million (vs. PLN 11 million in 2019). In the reported period, Mint of Poland Group generated consolidated net sales revenues of PLN 943 million (vs. PLN 669 million in 2019), up by nearly 41 percent on the year before.
– Higher profitability year-on-year was achieved due to a bigger share of sales of apartments in the company’s real estate projects “Mennica Residence I” and “Mennica Residence II” in the Group’s consolidated sales revenues. As a result of progress made in the Real Estate Development segment’s investment projects, both inventory and accounts payable turnover decreased. Also, the cash conversion cycle was shorter while liquidity ratios remained on a safe, stable level – comments Artur Jastrząb, Member of the Management Board and CFO, Mennica Polska S.A.
In FY 2020, the Mint Products segment accounted for the largest share of the Group’s consolidated sales revenues – it was responsible for nearly 70 percent of total sales (66.9 percent in 2020 vs. 58 percent in 2019). The segment’s revenues reached PLN 630.8 million, up by more than 62 percent on the year before.
– Our attractive mint products offer, continuity of supplies in challenging market conditions and diversification of sales channels all proved to be the key to exploiting numerous new market opportunities for business growth. Throughout the past year, a staggering total of 1.8 tons of gold was delivered to our customers, which means a rise of over 50 percent on the year before – says Grzegorz Zambrzycki, President of the Management Board and Managing Director, Mennica Polska S.A. – In response to rising demand for all precious metals observed last year, in the middle of 2020 we also decided to add silver investment products to our offer. This decision was proved right by the generated sales results – in total, we sold 1.5 tons of silver in the second half of the year only – Grzegorz Zambrzycki adds.
A real game changer last year was a spike in online sales of mint investment products. The Mint of Poland was well positioned to benefit from this new trend thanks to the company’s own online shop launched as part of consistent investment in diversification of its sales channels. Owing to that strategy, at the end of last year the company was selling its gold products in four stationary retail outlets located in the country’s three major cities – two in Warsaw and one each in Krakow and Poznan – and in all branches of PKO BP as well as via the online shop.
Stable cooperation with the National Bank of Poland resulted in orders for the production of circulation and collector coins with a total value in excess of PLN 93 million. Moreover, the Mint of Poland also actively worked on further strengthening its position in foreign markets.
– Last year, we participated in a total of 35 tenders for the production of circulation coins all around the world. Moreover, we successfully passed the pre-selection process organized by the Central Bank of the largest South American country – Brazil – to join only two other companies in the final part of the tender procedure that will take place this year. Very important for us were also contracts with our long-standing clients, including the central banks of Costa Rica, Paraguay and the Dominican Republic – Grzegorz Zambrzycki explains. – In the product group of collector coins, on the other hand, at the end of the year yet another contract was signed with our client of three years, Tajikistan. We also started cooperation with the Central Bank of Argentina – CEO Zambrzycki adds.
In the reported period, the Electronic Payments segment generated 18 percent of the Group’s consolidated sales revenues. The decrease in revenues recorded in 2020 (down by 38.6 percent on 2019) was directly caused by the outbreak of the COVID-19 pandemic, which led to lower use of public transport and, consequently, a drop in the number of ticket purchase transactions in all cities where the Mint of Poland’s ticket vending machines operate. Importantly, however, in September, before government restrictions were reimposed, ticket sales in many cities recovered to 80-90 percent of the pre-lockdown figures.
– To mitigate the potential impact of the pandemic, various cost optimization measures were implemented. These included the adjustment of service and system maintenance to the significantly lower number of public transport users. Moreover, we initiated successful talks with the authorities of the largest cities, following which with some the minimum remuneration was agreed while with others we managed to extend our cooperation agreements for another minimum 2 years – says Katarzyna Budnicka, Member of the Management Board responsible for Electronic Payments, Mennica Polska S.A.
Despite unfavorable market conditions, the Mint of Poland continued the nationwide rollout of its innovative ticket payment solutions. In cooperation with Mastercard, a pioneering scheme was launched in Bydgoszcz, under which a contactless payment card may serve as proof of season ticket purchase on public transport. In Łódź, a state-of-the-art fare calculation system for public transport journeys with a transfer was successfully piloted. Also in 2020, Mint of Poland Group implemented innovative payments for public transport tickets in Włocławek. Under the project, mobile ticket terminals operating under the company’s proprietary Open Payment System were installed on all public transport vehicles in the city.
Real Estate Development
In FY 2020, the Real Estate Development segment generated sales revenues of PLN 142 million (vs. PLN 3.9 million a year before). The sharp revenue growth resulted mainly from the completion of the project “Mennica Residence II” and the sale of 215 apartments.
– Despite a number of administrative challenges, we successfully completed and obtained the certificate of occupancy for “Mennica Residence II”, the second stage of our prestigious investment project in the center of Warsaw. We also finalized the first stage of one of the largest construction projects currently underway in Warsaw – “Bulwary Praskie”. As part of this project, last year we worked hard on obtaining the building permits for another four buildings, which were granted in the first quarter of 2021 – says CEO Grzegorz Zambrzycki.
In the case of the ultra-modern Warsaw office complex “Mennica Legacy Tower” project developed by the Mint of Poland in cooperation with Golub GetHouse, our partners, who are responsible for the project management, are currently preparing for the divestment process. Mint of Poland’s decision on next steps will depend on the final offer.