tTech reports 10% decrease in year end net profit

March 02, 2020

tTech Limited (tTech) for the twelve months ended December 31, 2019; booked a 20% increase in revenues to $340.37 million compared to $283.92 million for the prior financial year. Revenue for the quarter closed at $78.28 million relative to $69.08 million in 2018.

Cost of sales rose by 51% to $95.17 million from the $63.09 million reported for December 2018. Despite this, gross profit increased 11% for the year to $245.19 million (2018: $220.84 million).  Gross profit for the quarter fell 2% to close at $57.99 million compared to $59.19 million booked for the corresponding quarter of 2018.

Other Income and gains totalled $6.29 million for the year relative to a gain of $2.73 million in 2018, while administrative expenses rose 11% year over year to $184.88 million (2018: $165.86 million). Other operating expenses for the year reflected a 27% growth year over year to $40.93 million compared to $32.19 million recorded in 2018.

As such, operating profit for the year totalled $25.68 million, 1% above than the $25.52 million booked in 2018. Operating loss for the quarter amounted to $1.21 million relative to a loss of $1.47 million documented for the comparable quarter of 2018.

Finance income fell 23% year over year from $2.01 million in 2018 to $1.55 million for the year ended December 31, 2019. Moreover, tTech booked a finance cost of $2.47 million relative to nil the previous year.

Consequently, Profit before Taxation decreased by 10% from $27.54 million in 2018 to $24.76 million. No Taxes were recorded for the period, thus Net Profit for the year amounted to $24.76 million versus $27.54 million booked in 2018. Net loss for the quarter totalled $3.23 million relative to a loss of $1.14 million in 2018.

Notably, TTECH stated, “The company adopted IFRS 16, Leases as at 1 January 2019. The lease involved is the lease of the office building on Harbour Street. The accounting treatment is described in notes 2(b) and 10 in the audited financial statements. Under the new standard, the company is required to treat the lease as a ‘right of use’ asset which is depreciated over the life of the lease, and also treat the matching outstanding future lease commitments as a liability on which interest is charged.” The Company further added, “the lease liability is amortised the annual interest expense on the liability will fall and by 2025 the charges for interest expense and depreciation of right of use asset will fall below the cash rental charges forecasted to be paid.”

The earnings per share (EPS) for the year amounted to $0.23 compared to $0.26 reported in 2018, while loss per share for the quarter totaled $0.03 relative to a LPS of $0.01 for 2018. The number of shares used in our calculations is 106,000,000 units. The company’s stock price closed the trading period on February 28, 2020 at $4.27.

Balance Sheet Highlights:

As at December 31, 2019, the Company reported total assets of $292.74 million, a 17% increase when compared to $250.26 million in 2018. This was as a result of a 171% increase in Other Receivables  to amount to $38.55 million (2018: $14.23 million). Notably, the company booked ‘rights of assets’ of $28.37 million ( 2018: nil). These increases in total assets were, however, mainly tempered by a 20% decrease in ‘Government securities purchased under resale agreements’.

Shareholders’ Equity as at December 31, 2019 was $216.74 million compared to $198.88 million for the comparable period of 2018. This resulted in a book value per share of $2.04 compared to $1.88  the prior year.

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.