PCF Group (PCF) Q2 2024 earnings summary

Executive summary

• Revenue for 1H 2024 increased to PLN 76.3m from PLN 68.7m in 1H 2023, driven by contract development and self-publishing segments.

• Net profit dropped to a loss of PLN 33.3m from a profit of PLN 0.6m year-over-year, mainly due to impairment losses, IFRS 15 adjustments, and reduced margins on key projects.

• Strategic focus is on developing new games, expanding the self-publishing pipeline, and strengthening international teams, with key launches planned for 2025–2026.

Financial highlights

• EBITDA for 1H 2024 was negative PLN 11.3m, down from positive PLN 4.0m in 1H 2023.

• Cash, cash equivalents, and bonds stood at PLN 68.0m as of June 30, 2024, with cash and equivalents at PLN 83.4m at period end, both down significantly from previous periods.

• Equity capital was PLN 134.4m as of June 30, 2024, while total equity declined to PLN 394.2m from PLN 427.9m at year-end 2023.

• Revenue recognition from Bulletstorm VR launch in 1Q 2024 partially offset negative adjustments from Gemini.

• Operating loss reached PLN 35.8m, and earnings per share were PLN -0.93.

Outlook and guidance

• Strategic review underway, including the possibility of converting Bifrost and Victoria to work-for-hire projects.

• Planned releases: Project Bison in 2025, Bifrost and Victoria in 2026 (early access).

• Targeting total revenues of PLN 3.3bn for 2024–2028, with no dividend until positive cash flows from self-publishing are achieved.

• New financing of approximately PLN 350m required for 2025–2026 to execute the strategy; management is seeking additional funding to maintain operations beyond Q4 2024.