iCreate reports six months net profit of $3.09 million

August 18, 2020

iCreate Limited (ICREATE) for the six months ended June 30, 2020 reported revenues of $39.27 million, up from $25.02 million reported a year ago. For the quarter, ICREATE posted revenue of $14.76 million (2019: $13.13 million).

Management noted that, “this 6-month total also represents 85.1% of total revenues for 2019, despite a significant decline in our business to consumer (B2C) classroom training market due to COVID-19. During this period, iCreate was able to forge partnerships with several corporate entities during the second quarter of the year which resulted in our increased performance. Our main aim during the peak of the COVID-19 impact was to build digital skills among individuals to prepare them for a post COVID-19 era. We are grateful for the corporate partnerships in achieving these – mainly from the NCB Foundation, IFLE Foundation out of France and the Tourism Enhancement Fund.”

Total direct costs totalled $6.77 million for the six months period compared to $6.74 million for the first six months of 2019. Thus, resulting in gross profit of $32.50 million relative to $18.29 million booked last year. Gross profit for the quarter amounted to $13.17 million versus $9.66 million booked for the second quarter of 2019. Other income for the period amounted to $30,288 relative to $292,905 for 2019.

Administrative expenses rose 1% to $20.80 million (2019: $20.50 million) for the six months. Depreciation and amortization expense increased year over year to close at $1.95 million versus $1.19 million recorded for the corresponding period in 2019.

As such, operating profit for the period closed at $9.78 million in contrast to a loss of $3.12 million for the corresponding period of 2019. Operating profit for the second quarter closed at $4.68 million (2019 operating loss: $4.83 million).

Finance cost for the first six months amounted to $6.69 million relative to $6.22 million.

Consequently, net profit for the six months period amounted to $3.09 million versus a loss of $9.34 million twelve months earlier. For the second quarter, net profit totalled $1.84 million compared to a net loss of $7.85 million booked in the corresponding quarter last year.

Earnings per share (EPS) amounted to $0.02 compared to a loss per share of $0.05 for the same period of 2019. The EPS for the quarter amounted to $0.01 relative to a LPS of $0.04 reported in 2019. The trailing twelve months LPS is $0.17. The number of shares used in this calculation was 197,592,500 shares. iCreate traded on August 18, 2020 at $0.65.

Management noted that, “in April 2020, the company released via the Jamaica Stock Exchange several initiatives we would be embarking on during the COVID-19 pandemic to continue on the path of profitability. These involved a reduction in expenses across the board and pivoting to online classes to deliver our courses. We are pleased to be seeing the results of these initiatives so far and will continue prudent fiscal management to maintain the current performance.”

Balance Sheet at a Glance: 

As at June 30, 2020, total assets increased to close at $56.56 million (2019: $46.46 million). The increase was largely due to increases in ‘Investment or Other Non-Current Assets’ and ‘Trade and other receivables’ which closed at $6.83 million (2019: $1.36 million) and $15.68 million (2019: $9.71 million), respectively.

Shareholder’s deficit totalled $2.51 million compared to a shareholders’ equity of $29.88 million quoted as at June 30, 2019. This resulted in a shareholders’ deficit of $0.013 (2019 book value: $0.15).

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