November 15, 2019

ISP Finance Services Limited’s (ISP) total interest income amounted to $275.85 million compared to $213.76 million in 2018, an increase of  29%. For the quarter, total interest income amounted to $93.82 million (2018: $69.63 million). Of this :

• Interest income from loans grew by 29% to total $275.85 million relative to $213.49 million reported in the same period of 2018.
• Interest income receivables fell, amounting to $174 (2018: $269,371 million).

Interest expense totaled $22.36 million relative to $16.92 million in 2018; this represents a 32% growth. As a result, net interest income grew by 29% to total $253.48 million (2018: $196.84 million). Net interest income for the quarter amounted to $86.59 million (2018: $63.93 million).

Commission expense fell by 25% to $1.77 million (2018: $2.35 million), while no services fees were reported (2018: $1.75 million). In addition, Foreign Exchange Gain totaled $90,787 in 2019 compared to $458,505 the prior year.

As such, gross profit amounted to $251.82 million in 2019, a 28% rise relative to that of $196.69 million. For the third quarter gross profits increased by 36% to $85.95 million (2018: $63.38 million).

The company’s total operating expense amounted to $211.28 million, up 24% from $170.25 million in 2018, while for the quarter operating expenses rose by 31% to amount to $74.05 million (2018: $56.46 million). According to management, “the Company has maintained its cost of operations while greater customer demands. The newly established customer sales contact center is contributing to the business development thrust aggressively promoting the Company’s most recent back-to-school loan initiative.” The expenses for the nine months are broken down as follows:

• Staff Costs amounted to $102.65 million (2018: $86.56 million).
• Allowance for Credit Loss totalled $37.58 (2018: $22.44 million) .
• Depreciation was $3.89 million (2018: $4.10 million).

Other Operating Expenses amounted to $67.16 million (2018: $57.15 million).

Profit before taxes totalled $40.55 million (2018: $26.45 million) following no taxes incurred for the period under review, as such net profit for the period amounted to $40.55 million relative to a profit of $26.39 million in 2018, a 54% increase. Net profit for the quarter amounted to $11.90 million (2018: $6.86 million).

As a result, EPS for the period closed at $0.39 (2018: EPS $0.25). The EPS for the quarter was $0.11 (2018: $0.07). The 12-month trailing EPS is $0.55 and the number of shares used in our calculations is 105,000,000 units. Notably, ISP closed the trading period on November 14, 2019 at a price of $29.09.

Balance Sheet Highlights:

As at September 30, 2019, ISP reported total assets of $666.24 million, a 25% increase when compared to $534.77 million in the prior year. Notably, the increase was attributed to a drastic increase in ‘Cash and Cash Equivalents’ which closed at $10.81 million (2018: $1.11 million). Also, ‘Property, Plant and Equipment’ and ‘Loans, net of provisions for credit losses’ contributed to the growth closing at $25.08 million (2018: $20.09 million) and $602.35 million (2018: $491.52 million), respectively.

Shareholders’ Equity as at September 30, 2019 was $360.94 million compared to a $312.65 million in 2018. This resulted in a book value per share of $3.44 compared to $2.98 the prior year.

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