Financial Statement Release
Storent Investments AS interim report for 1st quarter 2020
Insider information, 2020-04-30 13:39 CEST --
Total revenues of Storent Group in Q1 2020 increased by more than 30% compared to the same period of 2019. Rent incomes slightly decreased, but total incomes increased due to the sale of an old fleet. Although were no official restrictions to carry construction activities in countries of our operations, indirect effect from Covid-19 pandemic started to be felt in March. Company operational profitability decreased mainly due to splitrent and personnel expenses increase.
Storent management has been preparing for crisis a year ago by starting development of online rental platform that plays key role in digitalization, automation and process efficiency. With Covid- 19 pandemic we have been able to launch platform one month ahead of schedule. In March 2020 Storent launched first contactless online equipment rental platform integrating Artificial Intelligence and Machine Learning, that allows to automate full cycle of online equipment rent. Rental platform is expected to serve as strong benefit for customers and clear competitive advantage, especially in uncertain times caused by Covid-19. We witness customers interest in renting online and see growth of new user registrations. Currently equipment may be ordered online in Baltics and Sweden. In Q2 2020 we plan to launch online rental platform in Finland. Already in 2019 digital document signing has been implemented in Baltics and volume of digitally signed documents constantly increases. Further, Storent group plans to increase speed and improve efficiency of customer service processes by automating internal processes. All Storent rental depots operate as usual, taking all necessary measures to ensure customers and employees safety according to local legislative regulations as well as additional precaution procedures, including equipment disinfection.
From January Storent group started cooperation with online splitrent equipment provider Preferrent that allows to increase rental equipment fleet without capital investments. It’s planned to develop further cooperation with Preferrent by increasing share of incomes from splitrent up to 40% during one year.
Upon beginning of Covid-19 pandemic, management evaluated worst possible scenario from effect of pandemic on Storent group results in 2020, which assumes revenue decrease by 13% compared to 2019. In order to ensure company liquidity with such assumption, talks with all financers have been initiated on 12- month grace period for principal repayment. At this moment principal repayments of shareholders loan and bonds have been postponed for a year. Largest lease companies have agreed to 6-month grace period with possible prolongation. Negotiations continue with equipment manufacturers and some have confirmed to postpone principal repayment for 12 months, we expect to receive confirmations from all manufacturers.
Positive signs related to Covid-19 restrictions softening are seen in all countries as well as market activities increase, which is usual in the beginning of construction season. Storent group management expects that, in spite of an effect from Covid-19 pandemic, it will manage to keep revenues of 2020 in line with ones of 2019.
AS Storent Investments CFO
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