ISP reports 13% decline in year end net profit

Date: April 1, 2019

ISP Finance Services Limited (ISP), audited results for the year ended December 31, 2018 reported total interest income amounted to $306.57 million compared to $288.74 million in 2017, an increase of 6%. For the quarter, total interest income amounted to $92.70 million (2017: $78.49 million). Total income is broken down as follows:
• Interest income from loans grew 7% to total $306.19 million relative to $287.27 million in the same period of 2017.
• Interest income receivables went down 74%, amounting to $380,677 (2017: $1.47 million).

Interest expense totaled $24.58 million relative to $24.45 million in 2017; this represents a 1% rise. As a result, net interest income grew by 7% to total $281.99 million (2017: $264.29 million). Net interest income for the quarter amounted to $85.15 million (2017: $72.23 million).

Commission expense went up 4% to $3.40 million (2017: $3.26 million), while service fees of $1.85 million were reported (2017: nil). In addition, foreign exchange gain totaled $523,116 in 2018, compared to $934,543 in the prior year.

As such, gross profit amounted to $281.10 million in 2018, 7% rise relative to that of $261.95 million. However for the quarter, gross profit climbed 22% to $84.40 million (2017: $71.05 million).

The company’s total operating expense amounted to $234.94 million, up 11% from $211.97 million in 2017, while for the quarter operating expense closed at $64.70 million (2017: $51.74 million). The expenses for the period are broken down as follows:

• Staff costs amounted to $114.11 million (2017: $104.97 million).
• Allowance for credit loss totaled $35.76 million (2017: $23.30 million).
• Depreciation was $5.41 million (2017: $5.33 million).
• Other operating expenses amounted to $79.67 million (2017: $78.37 million).

Profit before taxes totaled $46.15 million (2017: $49.98 million), following taxes of $2.53 million versus tax credit of $12,018 in 2017.

Consequently, net profit for the period amounted to $43.63 million relative $49.99 million in 2017, a 13% decrease. Net profit for the quarter amounted to $17.24 million (2017: $19.36 million).

As a result, EPS for the period closed at $0.42 (2017: $0.48). The EPS for the quarter was $0.16 (2017: $0.18). The number of shares used in our calculations is 105,000,000 units. Notably, ISP closed the trading period on March 29, 2019 at a price of $ 15.50.

Balance Sheet Highlights:

As at December 31, 2018, ISP reported total assets of $612.54 million, a 21% increase when compared to $507.69 million in the prior year. ‘Property, Plant and Equipment’ and ‘Loans net of provisions for credit losses’ contributed to this increase closing the period at $25.51 million (2017: $18.07 million) and $551.10 million (2017: $437.51 million), respectively.

Shareholders’ Equity as at December 31, 2018 was $320.39 million compared to a $286.27 million in 2017. This resulted in a book value per share of $3.05 compared to $2.73 the prior year.

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