iFast Corporation Ltd’s Latest Earnings Report: Profit Plunges 65%

iFast Corporation Ltd  (SGX: AIY) reported its second-quarter earnings this morning. The reporting period was for 1 April 2016 to 30 June 2016.

iFast is an internet-based investment products distribution platform which got listed in late 2014. Folks in Singapore may be familiar with its consumer facing product:, a platform for the purchase of investment funds. The business of iFast Corporation can be divided into two buckets: the B2C (business-to-consumer) division and the B2B (business-to-business) division.

You can learn more about its IPO (initial public offering) here.

Financial highlights

The following’s a rundown on some of the latest financial figures for iFast:

  1. For 2016’s second-quarter, iFast’s revenue fell by 16.4% year-on-year to $19.4 million.
  2. Net revenue (revenue net of commissions and fees)came in at $9.68 million, a 14.9% decrease from a year ago.
  3.  The lower revenue affected the bottom-line badly; iFast’s profit in the second-quarter of 2016 plunged by 65.4% to $1.1 million.
  4. Consequently, diluted earnings per share (EPS) for the reporting quarter declined almost 65%, falling from 1.22 cents in the second-quarter of 2015 to 0.43 cents.
  5. iFast recorded cash flow from operations of $3.3 million for the reporting quarter. Capital expenditure was $310,000 for the same period. This gave iFast positive free cash flow of around $3 million, up from the $2.8 million seen a year ago ($3.12 million in cash flow from operations and $0.31 million in capex).
  6. As of 30 June 2016, assets under administration (AUA) was S$5.63 billion. This was down from S$5.71 billion recorded at end-June 2015.
  7. The company ended the reporting quarter with $28.1 million in cash and equivalents and $25,000 in debt. This is a slight improvement from the $24.6 million in cash and equivalents and no debt recorded at the end of June 2015.

In sum, iFast wrapped up the second-quarter of 2016 with a revenue decline and sharply lower profit. But, the investment products platform provider still maintains a strong balance sheet and recorded free cash flow as well. This financial strength could provide the company with options for its future.

The board of directors proposed an interim dividend of 0.68 cents per share, unchanged from the year before. Along with this, the group also gave an update to its dividend guidance:

“For FY2016, our Directors intend to recommend and distribute dividends of 60% or more of our Group’s net profit (excluding our China operation, and exceptional items)”

Prior to this, iFast Corporation said that it will recommend dividends of 60% of the Group’s net profit (excluding its China operation and exceptional items).

Operational highlights

At the end of the second-quarter of 2016, the B2C business segment recorded an AUA of S$1.45 billion. Meanwhile, the B2B side clocked in AUA of S$4.18 billion.

At the country level, Singapore’s net revenue fell by 13.3% year on year to $7.1 million for the second-quarter of 2016. Elsewhere, Hong Kong and Malaysia recorded net revenue of $2.03 million and $0.5 million respectively. These represent a decline of 25% and an increase of 3.7%, respectively.

The Singapore business received formal registration as a CDP depository agent in July 2016. iFast has a target to introduce stocks on its platform on end 2016 or early 2017.

At its opening share price of $0.93 today, iFast traded at around 30 times trailing earnings.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.