Weighed down by $5.2 mil India exit impairment, iFast books 79% lower net profit in FY2022
$IFAST CORPORATION LTD.(AIY.SI)$
Weighed down by negative market environment and a $5.2 million impairment from its exit from India, iFast Corporation’s AIY 0.37% net profit decreased 79.0% y-o-y to $6.42 million for FY2022 ended December.
The Group’s total revenue dropped 11.3% y-o-y to $48.53 million in 4QFY2022 and decreased 3.7% YoY to $208.87 million in FY2022.
For 4QFY2022, iFast posted a 82% y-o-y drop in net profit to $1.3 million, while revenue fell 13% y-o-y to $47.4 million.
“The Group’s profitability declined substantially in 2022 as a result of the strategic investments that the Group has made, preparations for the Hong Kong ePension division, as well as impairment loss related to the Group’s decision to exit the onshore Indian platform business,” reads a Feb 14 press release.
iFast India Holdings, an associate company, announced on July 23 the exit of its onshore platform service business in India and pivot to providing global fintech solutions.
The Directors have proposed a final dividend of 1.40 cents per ordinary share for FY2022, unchanged from the final dividend of FY2021. The dividend will be paid on May 19 following shareholder approval at the group’s annual general meeting on April 26.
As at Dec 31, 2022, the Group’s assets under administration (AUA) declined 8.3% YoY to $17.42 billion.
iFast maintains that net inflows of client assets have remained “healthy” in 4Q2022 and FY2022, reaching $263 million in 4QFY2022 and $2,125 million in FY2022.
Overall, the Group’s total operating expenses increased by 41.5% from $19.65 million in 4QFY2021 to $27.79 million in 4QFY2022 and 33.7% from $77.68 million in FY2021 to $103.84 million in FY2022.
On a fully diluted basis, earnings per share stands at 2.13 cents, a fifth of the 10.67 cents seen the year prior.
The Group’s cash and cash equivalents and investments in financial assets, net of bank loans and deposits and balances of customers, increased to $84.09 million as at Dec 31, 2022, from $59.29 million the year prior.
As at Dec 31, 2022, current assets increased to $328.13 million from $154.64 million. Over the same period, non-current assets increased to $130.41 million from $70.21 million.
Meanwhile, total liabilities increased to $227.82 million as at Dec 31, 2022 from $97.22 million the year prior. “This was due mainly to increases in payables from uncompleted contracts on securities dealing at the end of the year, drawdown of certain bank loans and additional liabilities assumed from the acquisition of subsidiaries (UK bank) in March 2022.”
“2022 can be described as a year whereby the Group made some important strategic investments to position ourselves for bigger opportunities, but that coincided with a period of very tough financial market conditions globally,” says the company’s management. “During the year, the Group completed the acquisition of a bank with a full banking licence in the UK, which is an important step in the Group’s journey to become a fintech wealth management and digital banking platform with a truly global business model.”
Barring unforeseen circumstances, the Group expects revenues and profitability to grow to new highs in 2023, says iFast, as the ePension division starts to contribute substantially. “Even though there have been some delays in the rollout of the eMPF project, as announced on Jan 14, the Group is currently expecting that significant contributions may begin by 4Q2023.”
Shares in iFast closed 3 cents higher, or 0.56% up, at $5.43 on Feb 14.
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