iHunt - growing revenues, declining profits

The online retailer and manufacturer of mobile phones, gadgets and accessories iHunt Technology (HUNT) reported operating revenues of 20.7 million lei in the first half of the year, 3% above those in the period January-June 2024, but net profit decreased by 40.5%, to 0.27 million lei, according to the issuer's report published yesterday on the Bucharest Stock Exchange (BVB) website.

The increase in turnover was supported by the increase in production sold by 30.7% and by the increase in income from the sale of goods by 2.26%, the latter representing the dominant segment in the company's income structure, with a share of 96.6%, respectively about 20 million lei. Trade discounts granted decreased by almost 30%, while other operating income decreased slightly, by 4.8%, without having a significant impact on the total result.

On the other hand, operating expenses amounted to 20.2 million lei, 7.4% more than in the first half of last year. Expenses related to goods, which represent the largest share in total operating expenses, of 65.5%, decreased by 4.3%, to 13.3 million lei, signaling a more efficient control of supply and logistics costs. In contrast, personnel expenses increased significantly, by 57.6%, reaching 1.4 million lei, as a result of the expansion of the team dedicated to supporting the company's strategic projects, in particular the development and implementation of the iHunt EV charging station network. Also, expenses for external services recorded a significant increase, by 42.2%, from 3.4 million lei to 4.8 million lei, being generated largely by promotional campaigns, transport and services carried out by third parties, indispensable for supporting the expansion process.

Under these conditions, iHunt Technology achieved an operating profit of 0.56 million lei, 58.3% below that of the first six months of last year, while from financial activities the company recorded a negative result of 0.21 million lei, lower than the loss of 0.85 million lei. "Although in the short term the company feels the pressure of high expenses generated by the expansion in the electric mobility area, in the medium and long term these investments have the potential to generate additional recurring revenues and consolidate the competitive advantage in a market that is growing rapidly," the report states.

iHunt management states that, for this year, a strategic pillar of the company's development is the acceleration of the expansion of the iHunt EV charging station network, which has currently exceeded the threshold of 500 active locations nationwide. "This success validates the business model and creates the premises for achieving the objective of 1,000 charging points, thus strengthening iHunt's position in a sector with exponential growth potential," according to the document.

In the traditional business segment, iHunt aims for diversification and innovation, directions aimed at generating sustainable growth in the long term. "In 2025, the company will complete the iHunt Smart Home ecosystem with new products and improved models of existing products. This diversification not only strengthens iHunt's position in the electronics and smart devices market, but also creates multiple revenue streams, reducing the risk of dependence on a single segment and increasing the company's attractiveness for investors," the company's report also states.

In the middle of last year, founder Cezar Stroe had 52% of iHunt Technology.