Medicalgorithmics S.A. projects improved financial results in FY2022
Medicalgorithmics, an innovative medical technology company, has released its preliminary financial results for 2022. The company predicts an increase in revenue, an EBITDA profit, and a smaller net loss in 2022, mainly due to optimization measures and business restructuring.
According to the estimates, consolidated revenue of Medicalgorithmics has increased by 30% YoY to PLN 62.7 million. EBIT was up to PLN 17.2 million, compared to a loss of PLN 9.6 million the previous year. Estimated EBITDA profit rose to PLN 21.2 million compared to a loss of PLN 5.4 million last year, while the net loss, taking into account financial costs related to the sale of a US-based company, decreased to PLN 30.5 million from PLN 171.0 million the previous year. On a stand-alone basis, Medicalgorithmics’ revenue increased by 31% YoY to PLN 60.7 million from PLN 46.2 million in 2021. The profit on sales was PLN 17.9 million, 47% higher than the previous year, while the net loss, including non-cash costs related to the sale of the US-based subsidiary, decreased to PLN 29.5 million compared to PLN 172.4 million the previous year.
“We are pleased with the increase in revenue, EBITDA profit, and the smaller net loss in 2022. The growth in sales and reorganizational efforts, including the finalization of the sale of Medi-Lynx and the agreement with React Health Holdings, which involved the sale of an unprofitable US-based company while acquiring a profitable contract, contributed to this improvement,” said Maciej Gamrot, Chief Financial Officer of Medicalgorithmics. “In addition, we have divested our exclusivity in the USA, and since March 1st, 2023, Medicalgorithmics can provide services and products to various entities in the USA, which is a milestone in our new strategy as it enables us to acquire new distributors in this market. This increases the likelihood of a significant increase in the scale of our operations and should open up a new revenue stream,” added Mr. Gamrot.
The Medicalgorithmics Management also announced that after seeking opinions from external experts, discussions with the auditor during the audit year, and with the support of the company’s Supervisory Board, they have decided to incorporate the value of Kardiolytics’ contribution in the financial statements for 2022, in accordance with the most conservative and rigorous interpretation of IFRS and US GAAP.
In the stand-alone reports, the IFRS regulations result in the final value of the contribution being booked at PLN 49.9 million, equivalent to the value of 4.9 million shares of the Company subscribed by Biofund at the GPW closing share price of PLN 12.82 per share on November 8, 2022 the date of the share issue transaction for Biofund.
Following the IFRS, the Company applied a provisional assessment of the contribution in kind and plans to finalize it within 12 months from the transaction date, which is until November 2023. Therefore, the values presented may change. The technology’s provisional value was PLN 41.2 million, the net asset value was PLN 31.8 million, and the company’s goodwill value was PLN 18.2 million.
Maciej Gamrot, CFO of Medicalgorithmics, has stated that the change in value is non-cash and does not have any impact on the Company’s improving financial condition. He emphasized that it is merely an accounting requirement. Moreover, Kardiolytics is continuing to develop the AI VCAST project, as presented in the October 2022 report, and has recently obtained two new patents. Gamrot expects that the change in value will not have any negative impact on the company’s future results. The development and liquidity of the company are secure.
The VCAST technology is developing as expected. In April of this year, Kardiolytics obtained a patent for an autonomous method of modeling blood vessels using artificial intelligence, which will be applied in diagnosing vascular diseases. This is the second VCAST technology patent awarded to Kardiolytics by the US patent office this year.
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