Date: November 14, 2018
ISP Finance Services Limited (ISP), for the Nine Months ended September 30, 2018, total interest income amounted to $213.76 million compared to $210.70 million in 2017, an increase of 1%. For the quarter, total interest income amounted to $69.63 million (2017: $74.91 million). The nine months is broken down as follows:
Interest income from loans grew by 2% to total $213.49 million relative to $208.78 million reported in the same period of 2017.
Interest income receivables went down 86%, amounting to $269,371 (2017: $1.92 million).
Interest expense totaled $16.92 million relative to $18.65 million in 2017; this represents a 9% decline. As a result, net interest income grew by 2% to total $196.84 million (2017: $192.06 million). Net interest income for the quarter amounted to $63.93 million (2017: $68.58 million).
Commission expense inched up by 1% to $2.35 million (2017: $2.37 million), while services fees of $1.75 million were reported (2017: nil). In addition, Foreign Exchange Gain totaled $459,505 in 2018, compared to $1.23 million the prior year.
As such, gross profit amounted to $196.69 million in 2018, a 3% rise relative to that of $190.90 million. However for the third quarter gross profits declined by 6% to $63.38 million (2017: $67.59 million).
The company’s total operating expense amounted to $170.25 million up 6% from $160.24 million in 2017, while for the quarter operating expenses rose by 2% to amount to $56.46 million (2017: $55.59 million). According to management, “The Company continues to strengthen its organizational and staff resources to satisfy the anticipated customer services demands. A sales and marketing manager has been recruited to build out a customer sales contact center to focus on the development of new products and markets across several delivery channels. In support of the growth of business opportunities, the Company raise additional funding in the amount of $ 75 million.” The expenses for the nine months are broken down as follows:
• Staff Costs amounted to $86.56 million (2017: $81.09 million).
• Allowance for Credit Loss totalled $22.44 (2017: $15.74 million) .
• Depreciation was $4.10 million (2017: $4.04 million).
• Other Operating Expenses amounted to $57.15 million (2017: $59.38 million).
Profit before taxes totalled $26.45 million (2017: $30.67 million) following taxes of $61,831 (2017: $60,000).
Consequently, net profit for the period amounted to $26.39 million relative to a profit of $30.61 million in 2017, a 14% decline. Net profit for the quarter amounted to $6.86 million (2017: $11.97 million).
As a result, EPS for the period closed at $0.25 (2017: EPS $0.29). The EPS for the quarter was $0.07 (2016: $0.11). The 12-month trailing EPS is $0.44 and the number of shares used in our calculations is 105,000,000 units. Notably, ISP closed the trading period on November 14, 2018 at a price of $20.00.
Balance Sheet Highlights:
As at September 30, 2018, ISP reported total assets of $534.77 million, a 10% increase when compared to $448.12 million in the prior year. Notably, despite the company’s increase in total assets, its cash and cash equivalents fell drastically by $17.90 million to close the period at $1.11 million (2017: $19 million). ISP noted, “The company has embarked on a strategy to target new markets using an aggressive pricing strategy to grow loan volumes.” However the grow in the asset base was primarily driven by a 14% increase in ‘Loans net of provisions for credit losses’ totaled $491.52 million (2017: $430.19 million).
Shareholders’ Equity as at September 30, 2018 was $312.65 million compared to a $264.62 million in 2017. This resulted in a book value per share of $2.98 compared to $2.52 the prior year.
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