November 13, 2019
Reported in US$ (except where it is indicated otherwise)
Proven Investments Limited (PROVEN), for six months ended September 30, 2019 reported interest income of $13.81 million, a 3% decrease when compared with the $14.17 million reported for the same period in 2018. Interest income for the second quarter amounted to $6.91 million relative to $6.97 million for the second quarter ended September 30, 2018.
Interest expense for the first six months amounted to $5.22 million, 43% higher when compared to the $3.64 million booked for the prior year. As such, net interest income for the period witnessed a decline of 18% to total $8.60 million relative to the $10.53 million reported for previous year. Net interest income for the quarter fell 17% to $4.34 million (2018: $5.26 million).
Dividend income amounted to $39,718, a 92% decrease from the $525,010 recorded in 2018, while fees & commission income notably increased to $6.90 million relative to $2.48 million for the corresponding period of 2018.
Other income moved from $1.95 million to total $2.46 million for the period, a growth of 26%. Proven booked an 18% increase in pension management income to total $1.65 million, up from $1.40 million booked for the prior year’s corresponding period. Gains on securities trading closed at $2.44 million compared to a loss of $132,559. Consequently, net revenue increased by 26% to total $23.27 million compared to $18.41 million recorded for 2018.
Operating expenses climbed by 44% for the six months to total $16.43 million relative to $11.45 million in 2018. Of this, administrative and general expenses recorded a 54% increase to close at $15.81 million relative to $10.26 million documented for the first six months ended September 30, 2019. ‘Depreciation and Amortization’ increased 4% to $916,210 (2018: $884,391), The Company booked a IFRS 9 provisioning of $296,072 compared to a gain off $306,339.
Consequently, Operating Profit for the period declined 2% to $2.6.84 million (2018: $6.97 million). Operating profit for the quarter improved 20% to $4.06 million compared to $3.38 million recorded for the corresponding quarter of 2018. The company indicated, “the strong core operating performance for the period under review reflects the Group’s commitment to strategic initiatives aimed at optimizing value created and extracted from all portfolio companies. This materialized in the form of organic growth in key revenue lines which was further supported by cost synergies and efficiencies gains across the businesses.”
Notably, share of profit of associate amounted to $3.13 million for the period relative to nil in 2018. ‘Preference Share Dividend’ increased to $7.20 million (2018: $646,443). Gain on partial disposal of subsidiary closed at $23.97 million (2018: nil).
Profit before tax amounted to $26.75 million versus the $6.32 million booked in 2018. Taxation increased year over year by approximately 139% from $452,039 in 2018 to $1.08 million. As such, Net Profit amounted to $25.67 million, a 337% increase when compared to the $5.87 million in 2018. Net profit for the quarter amounted to $22.23 million relative to $3.04 million booked for the second quarter of 2018. PROVEN noted, “This emanated from strong double-digit growth in core business operations, as well as the extraordinary gain from the partial sale of its holdings in Access Financial Services Limited (AFSL).”
Net profit attributable to shareholders for the period amounted to $23.79 million relative to $3.89 million documented in 2018. Total comprehensive income for the six months amounted to $27.27 million compared to $1.46 million reported for the prior financial year’s corresponding period.
Earnings per share (EPS) for the quarter amounted to $0.038 (2018: $0.0062), while the twelve months trailing EPS amounted to $0.043. The number of shares used in our calculations is 625,307,963. Notably, the stock price for PROVEN and PROVENJA closed the trading period on November 13, 2019 at US$0.27 and $45.07 respectively.
Balance Sheet at a glance:
Total Assets as at September 30, 2019 amounted to $648.20 million (2018: $533.25 million), an increase of 22%. The growth resulted from the Company booking $103 million in ‘Investment in Associates’ relative to nil in 2018. The Company also reported cash and cash equivalents of $123.58 million (2018: $83.51 million). Proven stated, “The year over year Balance Sheet growth reflects incremental acquisitions and organic growth. Noteworthy is the 47.98% increase in the cash and cash equivalent position, a significant percentage of which is attributed to the holding of near-cash interest-bearing assets in BOSLIL. This cash supports the business model and prudent asset-liability management of that portfolio.”
Shareholders’ Equity totaled $115.23 million relative to $82.37 million in 2018; as such book value per share now amounts to $0.18 (2017: $0.13).
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