ISP reports 32% increase in year end net profit

Date: February 17, 2020

ISP Finance Services Limited’s (ISP) total interest income amounted to $367.06 million compared to $306.57 million in 2018, an increase of 20%. For the quarter, total interest income amounted to $91.22 million (2018: $92.81 million). Total income is broken down as follows:

Interest income from loans grew 20% to total $367.06 million relative to $306.19 million in the same period of 2018.

Interest income receivables went down 100%, amounting to $270 (2018: $381,000).

Interest expense totaled $37.73 million relative to $24.58 million in 2018; this represents a 53% increase. As a result, net interest income grew by 17% to total $329.34 million (2018: $281.99 million). Net interest income for the quarter amounted to $75.86 million (2018: $85.15 million).

Commission expense went down 20% to $2.72 million (2018: $3.40 million), while no service fees were reported (2018: $1.85 million). In addition, foreign exchange loss totaled $34,000 in 2019, compared to foreign exchange gain of $523,000 reported in the prior year.

As such, gross profit amounted to $326.61 million in 2019, 16% rise relative to that of $281.10 million. However for the quarter, gross profit declined 11% to $74.78 million (2018: $84.40 million).

The company’s total operating expenses amounted to $268.98 million, up 14% from $234.94 million in 2018, while for the quarter operating expense closed at $57.71 million (2018: $64.70 million). The expenses for the period are broken down as follows:

Staff costs amounted to $122.06 million (2018: $114.11 million).

Allowance for credit loss totaled $46.36 million (20178 $35.76 million).

Depreciation was $5.22 million (2018: $5.41 million).

Other operating expenses amounted to $95.35 million (2018: $79.67 million).

Profit before taxes totaled $57.62 million (2018: $46.15 million). No taxes were reported for the year (2018: $2.53 million). Consequently, net profit for the period amounted to $57.62 million relative to $43.63 million in 2018, a 32% increase. Net profit for the quarter amounted to $17.08 million (2018: $17.24 million).

Total comprehensive income for the period under review closed at $57.62 million (2018: $44.29 million). While for the quarter, total comprehensive income amounted to $17.08 million (2018: $17.91 million).

As a result, EPS for the period closed at $0.55 (2018: EPS $0.42). The EPS for the quarter was $0.16 (2018: $0.16). The number of shares used in our calculations is 105,000,000 units. Notably, ISP closed the trading period on February 14, 2020 at a price of $22.10.

ISP noted that, “the Company raised further financing from VM Wealth Management to pay out Sygnus Capital in October 2019.”

Balance Sheet Highlights:

As at December 31, 2019, ISP reported total assets of $703.66 million, a 15% increase when compared to $612.54 million in the prior year. ‘Deposits & Prepaid Expenses’ and ‘Loans net of provisions for credit losses’ contributed to this increase closing the period at $496,600 (2018: $395,000) and $643.62 million (2018: $551.10 million), respectively.

Shareholders’ Equity as at December 31, 2019 was $378.01 million compared to $320.39 million in 2018. This resulted in a book value per share of $3.60 compared to $3.05 the prior year.



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