Stronger sales rentability and increased business activity – Mint of Poland summarizes its performance in Q1-Q3 2020
Mint of Poland Group has released its consolidated interim report for Q3 2020 and cumulatively for Q1-Q3 2020. Excluding one-off and extraordinary events, in the reported period the net profit more than doubled year-on-year while the result on sales and EBITDA grew by nearly 60 percent and 30 percent, respectively.
In the first nine months of 2020, the Mint of Poland improved its rentability ratios, i.e. return on sales and operating profit margin, which was mainly caused by increased interest in the investment products offered in the Mint Products segment and by recording the revenues from final sale of apartments in the project “Mennica Residence I”. In Q1-Q3 2020, after eliminating extraordinary and one-off events, the net profit amounted to nearly PLN 27 million (vs. PLN 12.6 million the year before), the result on sales was in excess of PLN 32 million (vs. PLN 20,4 million the year before) while EBITDA reached PLN 45.5 million (vs. PLN 32.9 million the year before).
– The Group’s consolidated financial performance confirms the rationale for its business diversification, which helped generate positive results in the challenging times of coronavirus pandemic – says Artur Jastrząb, Member of the Management Board and CFO, Mennica Polska S.A. – Higher sales rentability as well as our increased business activity are reflected, among others, in the growing investment in working capital. At the same time, the Company’s financial liquidity remains on a stable high level – Artur Jastrząb adds.
Improved profitability as measured by ratios of return on net profit is mainly attributable to higher revenues in the Mint Product segment in the reported period as compared to the year before even despite the negative impact of the non-cash revaluation write-down on the shares held in ENEA S.A. – Excluding this one-off factor, the return on net sales in the reported period increased to reach 4.4 percent, up by nearly 60% – Artur Jastrząb explains.
An increase in inventories was recorded in two segments: Mint Products (due to the need to ensure the greatest possible availability of gold investment products for clients to meet the higher demand) and Real Estate Development (resulting from the continued work on the projects “Mennica Residence” and “Bulwary Praskie”). At the same time, a decrease in short-term investments was recorded which was caused by the growing investment in working capital and the negative revaluation of shares in ENEA S.A. An increase in liabilities, on the other hand, was mainly due to cyclical effects and activity in the Mint Products segment.
In relation to Q1-Q3 2019, the revenues of the Mint of Poland in the Mint Products segment grew in Q1-Q3 2020 by almost 60 percent (PLN 465 million in Q1-Q3 2020 vs. PLN 294 million in Q1-Q3 2019). The segment’s result increased by nearly 55 percent (PLN 39.5 million in Q1-Q3 2020 vs. PLN 25.6 million Q1-Q3 2019). The significant rise in EBITDA (from PLN 29.5 million in Q1-Q3 2019 to PLN 43 million in Q1-Q3 2019) resulted mainly from the sales dynamics in the group of gold investment products due to the particularly strong demand for gold among investors.
– In the first half of this year alone, the total demand for gold in the Mint of Poland amounted to 900 kg. In the first three quarters, it reached 1.4 tons – comments Grzegorz Zambrzycki, President of the Management Board and Managing Director, Mennica Polska S.A. – Simultaneously, we have also observed a record-high sale of silver in bullion coins and bars – Grzegorz Zambrzycki adds.
In Q3 2020, the Mint of Poland was awarded by investors the title of “Alternative Investment Company of the Year 2019” in the 6th Invest Cuffs Awards. The title confirms the Company’s investor attractiveness amid huge uncertainty in the times of highly challenging business conditions as well as the potential for business diversification.
In Q1-Q3 2020, the Electronic Payments segment generated revenues of PLN 132.5 million (vs. PLN 210.8 million the year before), down by around 37 percent year-on-year. In the reported period, the result decreased from PLN 2.3 million in Q1-Q3 2019 to PLN (-)8.9 million. The marked drop in EBITDA (PLN 2.1 million in Q1-Q3 2020 vs. PLN 12.8 million in Q1-Q3 2019) attributable to the COVID-19 pandemic as restrictions and lower use of public transport led to lower ticket sales to passengers.
In this very challenging period, drawing on the Company’s wide experience and know-how in contactless ticket solutions, the Mint of Poland launched an innovative scheme in Bydgoszcz, implemented in cooperation with Mastercard. Since this September, a contactless payment card may serve as proof of season ticket purchase on public transport – in Bydgoszcz, the new scheme covers the 14-day, 30-day or monthly, 90-day, as well as the school and university semester tickets.
– Before, the contactless payment card could only be used as proof of purchase of a single-fare or time-barred ticket via the Open Payment System (OPS) ticket vending machine. Now, the season ticket purchased via the Bydgoszcz Municipal Card (BKM) passenger portal and stored on the contactless card becomes valid immediately upon completing the online transaction. Hence, it is no longer necessary to use a vending machine or visit a passenger service point or another ticket sale point to purchase and activate the ticket. This is in line with the need to take special care of passenger safety in these insecure times – Grzegorz Zambrzycki stresses.
Real Estate Development
In Q1-Q3 2020, thanks to the handover and finalisation of sale of further apartments, the Real Estate Development segment recorded substantially higher revenues (PLN 14.5 million vs. PLN 3.1 million in Q1-Q3 2019). The segment’s result grew from PLN (-)8.3 million in Q1-Q3 2019 to PLN (-)2.1 million in Q1-Q3 2020 while its EBITDA rose from PLN (-)6.9 million to PLN (-)0.7 million.
– Despite the formal difficulties due to COVID-19, we obtained certificates of occupancy for the “Mennica Residence II” project and for Building S1 in Stage 1 of the “Bulwary Praskie” project. At the outbreak of the pandemic, both projects were in the final stages of implementation – says Grzegorz Zambrzycki, President of the Management Board and Managing Director, Mennica Polska S.A. – In „Mennica Residence II”, we handed over apartments with the total useable area of more than 700 sqm in the reported period – Grzegorz Zambrzycki adds.
In Q3 2020, the fully commercialised, ultra-modern and technologically advanced office complex “Mennica Legacy Tower” triumphed at two prestigious industry contests. In September, the project won the national stage of the European Property Awards 2020-2021. It was awarded in two categories (Commercial High-Rise Architecture and Commercial High-Rise Development) and will represent Poland in the European stage. In August, “Mennica Legacy Tower” was distinguished by the jury of the Real Estate IMPACTOR Awards as The New Iconic Landmark of the City of Warsaw. The Real Estate IMPACTOR Awards is a domestic initiative which since 2016 has recognised companies and individuals who have had a significant impact on the development of the real estate market in Poland.