May 13, 2019
tTech Limited (tTech), fr the three months ended March 31, 2019, booked a 5% decrease in revenues to $66.47 million compared to $69.82 million recorded for the prior financial year’s first quarter. According to management, “With all things considered, we are buoyed by the fact that our recurring revenues continue to trend in the right direction and our organization is working aggressively on the promise of delivering insanely good IT Services to our valued clients. Our sales team is diligently working through the strong pipeline of opportunities and their efforts are expected to positively impact our growth and performance in 2019.”
Cost of sales slid by 32% to $11.83 million from the $17.42 million reported in March 2018. As such, gross profit increased 4% for the quarter to $54.64 million (2018: $52.39 million).
Other losses totaled $2.37 million for the three months relative to a loss of $32,000 in 2018, while administrative expenses rose 10% year over year to $44.05 million (2018: $39.98 million). Other operating expenses for the period reflected a 24% growth year over year to $7.79 million compared to $6.26 million recorded in 2018.
First quarter operating profit totaled $436,000, 93% less than the $6.12 million booked for the corresponding quarter of 2018. TTECH booked finance income for the first three months of 2019 of $322,000 compared to $605,000 recorded in the prior year’s corresponding quarter.
Consequently, no taxes were recorded for the period, thus net profit for the quarter amounted to $758,000 versus $6.73 million booked for the same quarter of 2018. Management noted, “The appreciation of the Jamaican dollar relative to the United States dollar adversely affected the company’s profits in the quarter. Work-in-progress and the impact of new accounting standards also affected revenue recognition for some of our services.”
The earnings per share (EPS) for the quarter amounted to $0.01 compared to $0.06 reported in 2018. The trailing twelve months eps amounted to $0.20. The number of shares used in our calculations is 106,000,000 units. The company’s stock price closed the trading period on May 10, 2019 at $6.08.
TTECH stated, “tTech has had a challenging start to 2019. Our team was excited with the addition of new outsourcing clients in Kingston and Montego Bay, however, we are still awaiting decisions on several major projects which could have contributed positively to revenues and profit in the quarter.”
Balance Sheet Highlights:
As at March 31, 2019, the Company reported total assets of $253.03 million, a 9% increase when compared to $232.08 million in 2018. This was as a result of a 99% increase in Accounts Receivable to close at $66.67 million (2018: $33.45 million). TTECH noted, “For the quarter there was an increase in accounts receivable to $66.7 million. This was largely due to procedural changes at some of our clients, but our team has been working with them and the balances owing have been reduced.”
Shareholders’ Equity as at March 31, 2019 was $199.95 million compared to $185.10 million for the comparable period of 2018. This resulted in a book value per share of $1.89 compared to $1.75 the prior year.
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