Bats believes that the coronavirus removed NOK 520 million in sales and NOK 270 million from operating profit during the second quarter. The worst affected was for Norwegian Sats centers.
The kit training chain has been hit hard by the corona restrictions introduced in March. It was not until mid-June that the gym reopened.
This is shown in the quarterly results presented on Thursday morning.
Coronavirus’s negative effect on operating revenues is estimated by the company at NOK 520 million during the quarter.
Operating profit (EBITDA) was NOK 298 million and the company estimates that coronavirus resulted in a reduction in operating profit of NOK 270 million. The quarter ended with a loss of NOK 114 million for the training chain.
Membership fell by five percent during the three-month period to 652,000 members throughout the Nordic region.
Better than feared
Despite the fact that sales fell from just over one billion last year, to 744 million this year, the figures are better than expected. In an analysis dated 1 July, Sparebank 1 Markets analyst Øyvind Mossige writes that he expected a turnover of 685 million.
Sparebank 1 Markets operates with a buy recommendation on the Rate share and a price target of NOK 28 per share. The share closed on Wednesday at NOK 20.55.
– Will be even stronger after the crisis
In addition, the company believes that operations will improve.
– The negative effect of coronavirus is significant. However, I believe that we will be an even stronger consequence of the crisis, says CEO Sondre Gravir in connection with the quarterly report.
– In addition, Sats is very well positioned. We have strong and large gyms and trained employees. Therefore, we can deliver a professional, positive and safe experience with infection control measures in place. We already see that the members are returning at a higher rate than we expected, says Gravir.
Opens for acquisition
The focus in the future will be on getting customers back and recovering the loss of revenue during the first and second quarters, the report says.
The company is sending the idea to acquire more centers.
“In addition to recovering organic growth, the company’s financial strength allows for active participation in industry consolidation if attractive opportunities should emerge after the corona crisis,” Sats writes in the quarterly report.
Read the quarterly report for the company.
Largest case in Norway
The gym in Norway accounted for 46 percent of the chain’s revenue last year. During the second quarter, sales in Norwegian centers decreased by 217 million, which corresponds to 65 percent compared with the same period last year, excluding government subsidies. With subsidies, the decline in sales was 47 percent.
Sales in Norway were SEK 249 million during the quarter, while profit before tax ended at minus SEK 2 million.
Sats has received state compensation in Norway for 84 million Norwegian kroner from March to June, the company states. For the entire chain, the state’s contribution contributed to limiting the fall in income by NOK 126 million.
Sats has gyms in Norway, Sweden, Denmark and Finland.
In Sweden, which has had much milder infection limits, revenues increased during the second quarter. Sales increased by 6 percent to NOK 346 million, while operating profit decreased by two percent to NOK 88 million.
In Finland and Denmark, revenues decreased by 28 and 31 percent, respectively, during the second quarter of the year.