Sygnis's poor Q2 results
The Warsaw-based Deep Tech company is holding on by its fingertips
A difficult period for the global 3D printing industry translates into a challenging time for companies in local markets. Sygnis, a Polish deep-tech company listed on the NewConnect stock exchange, has published its financial results for the second quarter of 2024, which also summarizes the entire first half of the year. The situation is grim.
Sygnis, which includes several entities, including the Wrocław-based manufacturer of multifunctional 3D printers Zmorph (acquired two years ago), publishes its data separately for the main company and the entire group. However, due to the very small differences between the results achieved by both entities, we will focus only on the group data in this article.
In the second quarter of 2024, the Sygnis Group achieved revenue of 2.15 million PLN (~0.5 million EUR), a -51% decline compared to the same period last year. For the entire first half of the year, the group achieved revenue of 4.86 million PLN (~1.13 million EUR), a -44% year-over-year decrease. However, the worst part is that the revenue for the entire first half of 2024 is only 400,000 PLN higher than what Sygnis generated in the second quarter of 2023 alone. This is a catastrophic decline…
But it gets worse…
The net loss in the second quarter amounted to -2.1 million PLN (-0.49 million EUR), and for the entire first half of 2024, it reached -2.9 million PLN (-0.67 million EUR). Theoretically, there should be some reason for optimism since the year before, Sygnis lost -2.26 million PLN in the second quarter and -5.05 million PLN in the first half of 2023—so losses are being reduced. But in practice, we must consider other factors—such as short-term liabilities and advance payments for contracted equipment.
So, short-term liabilities amount to 17.26 million PLN (~4 million EUR) and have increased by +23% compared to the previous year. Loans and borrowings total 4.68 million PLN (~4.1 million EUR), up +55%. Worse still, the company has 1.28 million PLN in liabilities for wages and 1.32 million PLN for taxes, duties, social and health insurance, and other public law obligations.
As for advances on deliveries and services, it’s 0.00 PLN (0.00 EUR).
At the end of June 2024, the Sygnis Group employed 29 people. The company had 64,000 PLN in cash. EBITDA stands at -28.87% (-621,000 PLN).
What does the company's management think about this? First and foremost:
Only through research and development can global scale be achieved.
Additionally, there is reportedly an ongoing issue of Series E shares, where Sygnis aims to raise around 6 million PLN. I say "reportedly" because it started in June, and the results are unknown. In July, Joanna Danaj, the vice president of Sygnis responsible for finances in both the company and the group, resigned.
Furthermore, Sygnis is hoping to kick-start the production and sale of lenses and optical fiber preforms manufactured on Syglass 3D printers, as well as the commercialization of DEPO technology. The company aims to sign at least two contracts for EDM electrode deliveries by the end of 2024, but their value has not been disclosed.
And a quote to end:
Sygnis was born from the idea that only through research and development can global scale be achieved. We believe that deep-tech photonics and semiconductors are the springboard to achieving it—they are also among the most anticipated solutions by the global economy of the 3rd decade of the 21st century.