ISP reports 47% decline in year end net profit

May 19, 2020

ISP Finance Services Limited’s (ISP) total interest income amounted to $367.20 million compared to $306.57 million in 2018, an increase of 20%. For the quarter, total interest income amounted to $91.35 million (2018: $92.81 million). Total income is broken down as follows:

  • Interest income from loans grew 20% to total $367.07 million relative to $306.19 million in the same period of 2018.
  • Interest income from financial institutions and other receivables fell 66%, to close the year at $129,852 (2018: $380,677).

Interest expense totaled $31.51 million relative to $24.58 million in 2018; this represents a 28% increase year over year. As a result, net interest income grew 19% to total $335.69 million (2018: $281.99 million). Net interest income for the quarter amounted to $82.21 million (2018: $85.15 million).

Commission expense fell 20% to $2.72 million (2018: $3.40 million), while no service fees were reported for 2019 (2018: $1.85 million). In addition, foreign exchange gain totaled $46,424 for the year, compared to a gain of $523,116 reported in the prior year. Also, other income decreased 43% to closed at $75,034 (2018: 131,608) for the year under review.

As such, gross profit amounted to $333.10 million in 2019, an 18% rise relative to that of $281.10 million. However, for the quarter, gross profit declined 4% to $81.27 million (2018: $84.40 million).

The company’s total operating expenses amounted to $309.97 million, up 32% from $234.94 million in 2018. For the quarter operating expense closed at $98.69 million (2018: $64.70 million). The expenses for the year are broken down as follows:

  • Staff costs amounted to $122.06 million (2018: $114.11 million).
  • Allowance for credit loss totaled $87.64 million (2018: $35.76 million).
  • Depreciation was $5.22 million for the year (2018: $5.41 million).
  • Other operating expenses amounted to $95.07 million (2018: $79.67 million).

Profit before taxes totaled $23.12 million (2018: $46.15 million). Taxes incurred for the year amounted to $180,081 (2018: $2.53 million). Consequently, net profit for the year amounted to $22.94 million relative to $43.63 million in 2018, a 47% decline year over year. Net loss for the quarter amounted to $17.60 million compared to a profit of $17.24 million booked in 2018.

Total comprehensive income for the period under review closed at $22.94 million (2018: $44.29 million).

As a result, EPS for the year closed at $0.22 (2018: EPS $0.42). The loss per share for the quarter was $0.17 (2018: $0.16 EPS). The number of shares used in our calculations is 105,000,000 units. Notably, ISP closed the trading period on May 19, 2020 at a price of $15.90.

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 $683.20 million, a 12% increase when compared to $612.54 million in the prior year. ‘Loans net of provisions for credit losses’ and ‘Cash & Cash Equivalents’ contributed to the overall increase in the asset base to close the year at $627.26 million (2018: $551.10 million) and $22.81 million (2018: $16.48 million), respectively.

Shareholders’ Equity as at December 31, 2019 was $343.33 million compared to $320.39 million in 2018. This resulted in a book value per share of $3.27 compared to $3.05 the prior year.



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