tTech Limited (tTech) for the six months ended June 30, 2017: booked a 2% increase in operating revenues for the period to $107.83 million compared to $105.57 million for the corresponding period last year. Revenue for the quarter contracted 12% from $58.43 million in June 2016 to $51.25 million. According to tTech, “revenues in 2016 were boosted by the partial billing for a large PBX system, but no comparable projects were realized in this quarter.”
Operating Expense rose 9% to $98.47 million from $90.64 million for June 2016. However the company recorded an 8% decline in operating expenses to $45.85 million (2016: $49.80 million). The decline was largely due to, “to the higher cost of goods sold in 2016 associated with the PBX system,” as per tTech. Profit from Operations fell 37% for both the period and quarter to $9.36 million (2016: $14.93 million) and $5.40 million (2016: $8.63 million) respectively.
Other Income year over year posted a 127% improvement to $800,000 (2016: $353,000), while Investment Income fell 52% from $2.54 million a year earlier in 2016 to $1.22 million for the first six months of 2017.
Consequently, Profit before Tax decreased by 36% from $17.82 million to $11.38 million. No Taxes were recorded for the period, thus Net Profit for the six months was reported at $11.38 million, a reduction of 36% on the prior year’s corresponding period of $17.82 million. Notably, net profit for the second quarter also reflected decline of 35% from $10.53 million booked for the second quarter of 2016 to $6.89 million. tTech noted, “During the quarter the Company signed contracts with new customers primarily in the public sector for security and consulting services. New contracts with existing customers were also realized for Microsoft and server related projects. Despite the new customers and projects, the Company’s performance for the quarter was disappointing as revenues were below expectations. To reverse the downturn our marketing campaigns are being reviewed and updated to attract more qualified leads. Other changes that have been made are a repackaging of our managed services offerings to simplify how our pricing proposals are presented.”
The earnings per share (EPS) for the period amounted to $0.11 relative to $0.17, while the EPS for the quarter totaled $0.06 compared to a $0.10 in 2016. The trailing EPS amounted to $0.33. The number of shares used in our calculations is 106,000,000 units.
Management indicated, “new services are being assessed and we anticipate the launch of a new cloud service for enterprise and mid-sized companies in the third quarter. This service has significant revenue potential, is proven in other markets, and should be very competitive compared to similar solutions in the market.”
Balance Sheet Highlights:
As at June 30, 2017, the Company reported total assets of $202.93 million, a 12% increase when compared to $181.36 million in 2016. This was as a result of an increase in investments which amounted to $28.38 million relative to $2.21 million. Securities purchased under resale agreements also contributed to the growth with an 18% increase from $80.03 million to $94.40 million.
Shareholders’ Equity as at June 30, 2017 was $175.38 million compared to $146.42 million for the comparable period of 2016. This resulted in a book value per share of $1.65 compared to $1.38 the prior year.
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