August 15, 2024
One Great Studio Company Limited (1GS) for the six months ended June 30, 2024, reported a 26% decrease in Revenue totaling $175.33 million compared to $235.45 million in the corresponding period last year. Revenue for the second quarter had a 30% decrease to close at $84.51 million compared to $120.51 million for the comparable quarter of 2023.
1GS noted “this downturn was primarily driven by reduced revenues from our SEO business, a key segment impacted by recent changes in Google’s algorithm and challenging economic conditions in our primary markets.”
Cost of sales amounted to $108.66 million (2023: $112.82 million), this represents a decrease of 4% year over year. Consequently, gross profit decreased by 46% to $66.67 million compared to $122.63 million for the six months ended June 30, 2023. The company booked gross profit of $31.92 million for the second quarter versus $62.64 million reported for the similar quarter of 2023.
Administrative expenses increase by 9% to close at $44.38 million (2023: $40.70 million), while Operating profit decrease by 73% from $81.93 million in 2023 to $22.28 million in the period under review.
Other income for the six months amounted to $7.38 million, a 233% increase relative to $2.21 million reported in 2023.
EBITDA for the six months amounted to $29.66 million, a 65% decrease relative to $84.14 million reported in 2023. EBITDA for the second quarter amounted to $16.83 million (2023: $44.21 million). Interest expenses totalled $1.74 million, a 91% decrease from the corresponding period last year. (2023: $18.80 million).
Profit before Taxation for the six months amounted to $24.09 million, a 61% decrease relative to $61.07 million reported in 2023. Profit before Taxation for the second quarter amounted to $13.65 million (2023: $32.55 million).
Taxation charge for the six months was $489,763 (2023: $10.93 million).
Net profit for the six months amounted to $23.60 million, a 53% decrease from the $50.13 million reported in 2023. For the second quarter, Net profit was $13.34 million (2023: $27.14 million). Management highlighted, “this decline was primarily due to challenges in our SEO business, which has been impacted by recent changes in Google’s search algorithm as well as broader economic conditions.”
Consequently, Earnings Per Share for the six months amounted to $0.01 (2023: EPS: $0.04), while Earnings Per Share for the quarter totaled $0.01 (2023: EPS: $0.02). The twelve-month trailing EPS was $0.03, and the number of shares used in these calculations was 1,693,131,075.
Notably, 1GS’s stock price closed the trading period on August 14, 2024, at a price of $0.78 with a corresponding P/E ratio of 25.13x.
Balance Sheet Highlights
The company’s assets totalled $644.73 million (2023: $552.35 million). The increase in assets was attributed to a 164% jump in ‘Short term investments’ closing at $199.14 million.
Shareholder’s equity was $596.10 million (2023: $251.93 million), representing a book value per share of $0.35 (2023: $0.15).
Disclaimer:
Analyst Certification – The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure – The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may affect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.