iFast's Q1 profit slides 35% on lower revenue, higher expenses
Sign up now: Get ST's newsletters delivered to your inbox
Fintech platform iFast posted a near 35 per cent year-on-year drop in net profit to $5.74 million for the first three months ended March 31, 2022, as global stock market conditions turned sour.
The bottom line was lower, in line with decreased revenue and higher operating expenses.
Net revenue for the quarter was 1.2 per cent lower at $28.15 million, as an 18.7 per cent decline in non-recurring net revenue offset an 8.8 per cent increase in recurring net revenue. Earnings per share for the quarter fell to 1.97 cents, down from 3.22 cents a year ago.
Operating expenses rose 10.4 per cent year on year to $21.12 million in the first quarter of the year as the group continued to invest in its next phase of growth.
"The wealth management platform business that the group is building has very strong long-term growth drivers, (but) in the short term, financial market conditions can cause interruptions in its growth path, and 2022 looks likely to be one of those years," iFast said.
The group's assets under administration (AUA) declined 2 per cent quarter on quarter to $18.63 billion as at March 31 on the back of declines in stock and bond prices globally. When comparing year on year, however, the group's AUA was up 15.6 per cent.
iFast's acquisition of British-based BFC Bank was completed on March 28, and the bank has been renamed iFast Global Bank. iFast Global Bank is expected to contribute $4 million in losses to the group this year, although the group expects it to achieve profitability from 2024. Beyond 2024, iFast Global Bank is expected to become an "important growth driver" for the group.
iFast said: "Overall, the group expects to see a moderate growth in net revenue in 2022 as a whole, but also expects to see some declines in profitability. The group, however, expects to see a robust ramp-up in its profitability between 2023 and 2025 as its new ePension division in Hong Kong becomes a strong contributor."
iFast declared an interim dividend of one cent per share, similar to that in the first quarter of 2021.
The counter closed at $5.31 yesterday, down 35 cents or 6.18 per cent.
THE BUSINESS TIMES
