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On Thursday, WAG Payment Solutions (LSE:WPS), operating as Eurowag, reported that its trading performance remained on course despite a significant drop in half-year profits.
For the six months ending 30 June, the fintech company specializing in freight services revealed an 18% rise in total net revenue, reaching €141 million. Adjusted earnings before interest, tax, depreciation, and amortization also saw an 18% increase, climbing to €59.4 million.
However, pre-tax profits experienced a sharp decline of 51%, falling to €4.2 million from €8.5 million in the same period the previous year. The company attributed this decrease to the rising costs associated with increased debt levels and higher amortization expenses.
Eurowag, which provides fleet management software and fuel card payment solutions, also highlighted ongoing macroeconomic challenges within the commercial road transport (CRT) sector. These challenges have affected the volume of loads and the number of kilometers driven, impacting overall performance.
Despite these issues, Eurowag indicated that it remains "well-positioned" and is performing in line with expectations. The company observed "some signs" of economic recovery, particularly noting improvements in the load spot market. As a result, the company maintained its near- and medium-term guidance.
Martin Vohanka, the founder and chief executive of Eurowag, remarked on the company’s resilience: "We continue to deliver strong double-digit growth, despite the economic headwinds impacting the CRT industry across Europe. Our resolute focus on providing mission-critical products to our customers has allowed us to create a highly resilient business model, giving us the capacity to enhance our services, scale, and innovate."
Eurowag, established in 1995, anticipates net revenue growth in the mid-teens for the near and medium term. The company also projects an increase in adjusted EBITDA margins once recent acquisitions are fully integrated.
As of 0900 BST, shares in the FTSE 250-listed firm had risen by 2%, reaching 74.2p.
