"2023 has been an up and down-year for us. The first half of 2023 gave us confidence that we would have a year at least as good as 2022. However, as of the second half of last year, things took an unexpected turn due to several reasons, which have led to reduced requests for cybersecurity services and solutions or stagnation in the development of projects. Among these reasons, we list the discussions held throughout the past year at the legislative level regarding fiscal changes and the ordinance regarding the reduction of expenses by public institutions. All these aspects created uncertainty in the market and left a mark on the activity of companies and their budgets. Their decision to invest in cybersecurity has been prolonged, so in the second part of the year, we have seen a postponement to 2024 by clients and potential clients regarding implementing cybersecurity measures. These elements directly and indirectly impacted our revenues," stated Victor Gansac, Chairman of the Board of Directors and CEO of Safetech Innovations.
Regarding the results at the consolidated level, in 2023, the turnover amounted to RON 31.1 million, down 11% compared to 2022, and the net profit recorded a value of RON 3.8 million, a decrease of 37% compared to the previous year. Consolidated results include the performance of Safetech Innovations SA and Safetech Innovations Global Services Limited (Safetech UK), a UK entity.
Over the past year, Safetech UK has missed the sales targets set by the management. Thus, following an assessment carried out at the end of 2023, which aimed to identify the means of accelerating the company's development in the UK market, Safetech UK adopted a new strategy, focusing on a higher volume of contracts with lower value. At the same time, the entity was restructured, the expenses being reduced by 40%. Safetech Innovations management estimates that the effects of these measures will be seen as of Q2 2024.
In line with the UK contracting strategy, as of 2024, Safetech UK has already signed the first contracts and has further contracts awarded totaling around 150 thousand pounds, which are under signing procedures. Focusing on attracting lower-value contracts supports a more dynamic response to market opportunities. It facilitates a steady revenue stream, avoiding the lengthy negotiation and project initiation periods seen with larger contracts. The company will continue to implement this strategy throughout 2024.
As part of the 2023 preliminary results report, Safetech Innovations also published the 2024 revenue and expense budget proposal. Thus, in 2024, the company targets, at the consolidated level, total revenues of RON 64.8 million and a net profit of RON 13.1 million based on a series of projects and contracts that have been signed since the beginning of this year or are under signing procedures.
"Even though the financial results for 2023 were not in line with our expectations, looking forward, we anticipate that things will look better in 2024. Cybersecurity challenges are becoming more complex, and the need for cybersecurity services and solutions is intensifying. We saw this at the beginning of the year. We have already signed recurring cybersecurity incident response and monitoring contracts with four new clients, and a significant contract was announced this month worth approximately RON 3.6 million. At the same time, we also signed three contracts for projects with European funds, totaling RON 4 million, through our involvement in various multinational consortiums at the European level. In addition, we won a project with European funds at the national level, worth RON 6.2 million, a contract that we will sign in the next period," added Victor Gânsac.
Safetech Innovations is listed on the Main Market of the Bucharest Stock Exchange as of February 6, 2023, and is traded under the SAFE symbol. Safetech Innovations' 2023 preliminary financial results, at the individual and consolidated level, are unaudited.
