GuruFocus - Release Date: November 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Quest Holdings SA (STU:9IVA) reported a 12% increase in total consolidated revenues, reaching approximately EUR 926 million compared to the previous year.
- The IT services sector, primarily Uni Systems, showed a 20% improvement in sales, with earnings before tax growing by 9.7%.
- The company successfully integrated two additional companies, ITT Romania and another, contributing positively to the financial performance.
- Quest Holdings SA's commercial activity segment grew by roughly 11% in sales, despite a challenging market environment.
- The company maintains a solid cash position with over EUR 300 million in cash and available credit lines, supporting planned growth investments.
- The decrease in Apple (NASDAQ:AAPL) products' gross margin due to a new distribution agreement negatively impacted EBITA levels.
- The absence of government support for climate device replacement led to a substantial market decline in the climate sector.
- Instability in sea transportation costs and delivery delays, primarily due to conflicts in the Suez Canal area, posed challenges.
- Increased depreciation from new investments and higher working capital needs affected financial performance.
- The commercial activity segment experienced a marginal 2% decrease in earnings before tax, influenced by rising interest rates and depreciation.
A: (CFO, Marcos Vakos) The sale of the 20% stake in ACS will not affect our consolidated figures because we will continue to consolidate ACS's performance. The only change will be in the minority shareholder rights. GLS has the option to acquire the remaining 80% either in October 2025 or October 2026, but this is not guaranteed.
Q: What are the profitability margins of Benrubi, and how will this acquisition affect Quest Holdings' commercial activities?
A: (Investor Relations Officer, Alexandros Rusta) Benrubi operates in the small domestic electrical appliances market, with revenues over EUR 30 million and EBITDA margins exceeding 50%. This acquisition is expected to boost both the commercial segment and the group's overall margins.
Q: Can you elaborate on the call option regarding GLS and the potential buyback of the 20% stake in ACS?
A: (CEO, Apostolos Jorgan) If GLS decides not to exercise the option to buy the remaining 80% of ACS, Quest has the option to buy back the 20% at a price determined by a mechanism, likely at a discount if the company's results are stable or improved.
Q: What is the status of the Benrubi acquisition in terms of regulatory approval?
A: (Investor Relations Officer, Alexandros Rusta) We expect to receive a final decision from the competition authorities within the next two months.
Q: How is Quest Holdings' business in Romania evolving, particularly with Xiaomi?
A: (Investor Relations Officer, Alexandros Rusta) Our business in Romania is growing at a double-digit pace. Xiaomi (HK:1810) had a small market share initially, but we are expanding. The company has reached break-even within a year, and we expect improved profitability moving forward.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.