SINGAPORE (April 28): iFAST Corporation has reported $1.5 million in earnings for the 1Q ended March, down 42.5% from $2.7 million in 1Q18 due to lower revenue.
This comes after an extended period of poor financial market conditions over 2H18, which resulted in a weak January and February 2019 in terms of both revenue and profitability, says the group in a press statement on Saturday
Revenue for the quarter fell 12.2% y-o-y to $27.2 million from $31 million previously as contributions from the Business-to-Business (B2B) business segment registered a decline, impacted by lower customer investment subscriptions in unit trusts (UTs) due to weak investor sentiment in equity markets.
Contributions from the Business-to-Customer (B2C) business division nonetheless grew 3.3% to $4.8 million as opposed to $4.7 million a year ago. This was mainly due to an increase in transaction fees resulting from increased investment subscriptions from customers in newer products such as bonds, ETFs and stocks – as well as higher interest income from increased client assets under administration (AUA).
Meanwhile, total operating expenses grew 13.4% on-year to $14.5 million over the quarter, attributed to the group’s continued efforts to strengthen its overall range of products and services.
In terms of geographical segments, iFAST’s Singapore operation remains the major contributor to the group’s net revenue, with overall Singapore AUA growing 8% q-o-q as at end-March.
While Hong Kong showed a rebound in total net inflows of investments from customers and Malaysia showed significant growth in the bond business over 1Q19, growth of the China business continued to slow under the period following significant client redemption of investments in 4Q18 due to poor market sentiment.
The group however notes “some initial signs” of China’s economy stabilizing recently, with AUA of its China operations growing 10.2% q-o-q as at end-March.
A dividend of 0.75 cent per share has been declared.
Going forward, iFAST says it expects its revenue and profitability to show improvements in the next quarter.
In particular, it highlights how its group AUA grew 8.7% q-o-q to a record high of $8.75 billion as at end-March with improved market conditions, despite starting out from a relatively low level of $8.05 billion at the beginning of 2019.
“As the group is executing its overall strategy, adverse financial market conditions can affect its levels of profitability in the short term. However, the group believes that it will benefit from the overall improving scale of its platform in the medium to long term,” says iFAST.
Shares in iFAST closed 2.63% higher at $1.17 on Friday.
