asknet Solutions AG: Notice of loss pursuant to Section 92 (1) of the German Stock Corporation Act (AktG) and adjustment of the annual forecastSeptember 06, 2021
Insider Information pursuant to Article 17 of the Market Abuse Regulation (MAR)
September 6, 2021, Karlsruhe (Germany) – In the course of the preparation of the interim financial statements for the first six months of 2021 and the update of the full-year forecast for 2021, the Management Board of asknet Solutions AG today has concluded that a higher loss than originally assumed will have to be recorded for both the half-year as well as the full year 2021. According to preliminary figures, the company will post earnings before interest and taxes (EBIT) in the range of EUR -1.1 to -1.4 million for the first half of 2021, resulting in a loss of more than half of the share capital and a deficit not covered by equity in the range of EUR -0.7 to -0.9 million. The key factors affecting the financial performance are (i) higher legal costs in relation to the legacy issues, (ii) high restructuring and investment costs of strategic initiatives within the framework of the company’s Three-Pillar Strategy aimed to foster growth in the medium term, and (iii) a postponement of the implementation of high-revenue and strategically important new projects to the second half of the year.
A loss of half of asknet Solutions AG's share capital triggers a legal obligation to invite shareholders to a General Meeting in accordance with Section 92 (1) of the German Stock Corporation Act (AktG). The invitation to an Extraordinary General Meeting, including the agenda, will be published in due form and time. At the meeting, the Management Board will announce the share capital loss and provide an update on the company's situation.
The company expects that in the second half of the year 2021 and based on the already completed start of several new client projects, the business situation will significantly improve. Nevertheless, the annual forecast cannot be maintained in light of the factors mentioned above. For the full financial year 2021, declining sales revenue and gross profit are now expected, leading to earnings before interest and taxes (EBIT) at the prior-year level. Originally, the company had been expecting a stable to single-digit percentage increase in sales revenues. Gross profit was expected to be slightly below the 2020 level. At the same time, a significant reduction in losses based on earnings before interest and taxes (EBIT) was expected compared to the previous year.
In the wake of this announcement, the company's Management Board reaffirms the importance of the Three-Pillar Strategy announced in July 2021. The focal point of the strategy is to reposition the existing business units, to pursue a clear corporate vision, and to develop innovative products and open new markets. For this purpose, several strategic initiatives have been launched and are being implemented to lead the company to profitability and sustainable, steady growth by 2023.