Solteq Plc's first quarter was moderate and profitability development was better than we expected. The Group's revenue was EUR 16.9 million, EBITDA EUR 1.3 million, and comparable operating result EUR 0.1 million. The Group's revenue decreased by 12.2 percent from the comparison period partly due to the general decline in demand and, especially, to the continued quality problems in the Utilities business.
Profitability decreased from the comparison period in both segments. The Retail & Commerce segment was able to balance the challenging market situation with successful sales and improved efficiency. The Utilities segment continued to focus on solving problems in the development and quality of software products, which reduced customer invoicing and increased project delivery costs.
However, the segment's problems have decreased compared to the second half of last year. Persistent work to solve the problems is still ongoing, but we believe that the segment’s situation will be clearly improved after the summer.
The instability in international politics creates uncertainties in the Nordic operating environment, for example, in the form of high inflation and increased costs. The uncertainties still have a negative impact on demand for the Retail & Commerce segment, although the continued decline in demand seen in the second half of last year, has calmed down. In the Nordic energy sector, demand for software solutions and expert services is driven by changes in industry regulations, the transition to renewable energy sources, and opportunities created by emerging technologies for business efficiency.
We expect the market outlook for the Retail & Commerce segment to remain moderate during the current financial year and demand to recover as the market stabilizes. We expect the long-term market outlook for the Utilities to remain good and provide opportunities for profitable growth.
After the review period, on April 17, 2023, the company sold its business based on Microsoft BC and LS Retail ERP systems to Azets Insight Oy. The net debt-free purchase price is a maximum of EUR 20 million. The company will recognize an estimated one-time profit of approximately EUR 8 million on the fixed purchase price in the second quarter. As a result of the transaction, the company focuses more strongly on selected solutions and expert services in the energy sector, retail, and e-commerce. The transaction will significantly reduce the company's indebtedness and thus improve its operating possibilities in both business segments.
CEO Aarne Aktan
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