Karachi, November 11, 2022 (PPI-OT): AVN and OCTOPUS: Corporate Briefing Key Takeaways
The Avanceon Group held its analyst briefing today, where it discussed recent results along with the strategy for the future. AVN posted consolidated earnings of PkR860.5mn (EPS: PkR2.65) in 3QCY22, taking cumulative earnings for 9MCY22 to PkR1,832.1mn (EPS: PkR5.64). OCTOPUS clocked in earnings of PkR269.5mn (EPS: PkR1.97) in 3QCY22, ending up in a NPAT of PkR530.9mn (EPS: PkR3.88) in 9MCY22.
The management divulged that it has an order backlog of US$71mn for AVN, while hopes to reach revenue of US$100mn by CY25. From this, the company hopes to earn US$20mn from Pakistan, US$40mn from Qatar and Saudi Arabia and another US$40mn in ME and North Africa.
The company is seeking growth of 15%YoY in operations in Pakistan. For this, the management will focus on retail services business, EPG projects and expansion in building technologies. With additional initiatives, the company can also achieve order generation of US$22.5mn from this region.
Core automation business in ME and Africa is set to grow by 25%YoY for the next few years. A separate process division has been set up which will focus on skid-based packages along with solar systems for oil wells. In Africa, the Nigerian unit will focus on automation and digitalization in Oil and Gas businesses along with a JV in Egypt which will focus on infrastructure projects.
After significant revenue generation from the QSI region due to the Worldcup, the company further plans to submit bids for infrastructure and water projects. The company plans for brownfield EPC partners for Oil and Gas and infrastructure projects. The management apprised that expansion plants into Kuwait are in place, where export of services will be made from the Qatar Free Zone.
Regarding Octopus Digital, the management stated that the softwares which were under development for some time are finally ready to be rolled out, which is expected to increase revenue substantially in the coming years. As Octopus is operating with the SAAS model, margins along with Revenue per Employee are expected to increase significantly going forward, as the company does not need to increase its workforce in relation to the increase in number of clients. The management plans to use channels for the implementation of the products of Octopus Digital.
The management believes that the acquisition of EmpiricAI will be completed by the end of the year, although both entities are operating together already. The acquisition is expected to create synergies with the softwares of Octopus Digital regarding industrial analytics, and both teams are currently working on creating and supplementing their softwares accordingly.