Friday 29 Mar 2024
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SINGAPORE (July 29): iFAST Corp’s earnings continued its dive in 2Q, falling 65.2% to S$1.14 million from S$3.28 million a year ago, on the back of “adverse equity market conditions”.

Excluding its recently-launched China operations which is at the initial investment phase, iFAST’s 2Q16 earnings was S$1.87 million, 46.8% lower than the corresponding quarter last year.

Net revenue in 2Q fell 14.9% to S$9.68 million, compared to S$11.38 million last year.

For the first half of the year, iFAST’s earnings have fallen 62% to S$2.39 million while net revenue has slipped 10.4% to S$19.04 million.

iFAST says the decline is mainly due to “the combined effects of negative market sentiment in the period following the stark sell-off in global financial markets at the beginning of 2016 and a negative market reaction to the Brexit in June 2016”.

In Singapore, net profit fell 35.5% to S$1.86 million in 2Q16, from S$2.89 million in 2Q15, on the back of lower net revenue.

Besides the negative global financial markets sentiment, iFAST’s Singapore business also saw higher operating expenses from efforts to enhance platform FinTech capabilities and improve the range of investment products and services provided to customers in the period.

“Breaking down by geographical segment, Singapore operation is still the major contributor of the Group’s revenue,” iFAST says in its SGX filing on Friday.

iFAST notes that while Singapore revenue fell 15.3% in 2Q16, the bonds sale subscription amounts including transfer-in amounts doubled to S$28.46 million in 2Q from S$13.55 million in the previous quarter. iFAST’s online bonds distribution business was launched on Singapore platforms in 2Q15.

Profit generated from iFAST’s Hong Kong operation plunged 94.0% to S$0.04 million in 2Q16, from S$0.61 million in the corresponding quarter last year.

The significant decline was attributed to initial operating losses incurred to build an online stockbroking platform in the period, after iFAST’s acquisition of a stockbroking firm in Hong Kong, iFAST Securities (HK) Limited. The stockbroking platform has been under a test run in June 2016.

In Malaysia, net profit was halved to S$0.01 million in 2Q16, from S$0.02 million in 2Q15, mainly attributed to a “volatile market sentiment” in the quarter.

iFAST’s China operation, which is still in the start-up phase and soft-launched in March, saw losses tripled to S$0.72 million in 2Q16 from a loss of S$0.23 million reported in 2Q15.

Looking forward, iFASTS says it has been making progress towards its long-term vision of being an integrated investment products distribution platform, which it believes is key to robust growth rates in the medium to long term in Asia’s wealth management industry.

“While 1H16 has been poor, our Directors believe that any improvement in market conditions will have a favourable impact on the profitability of the Group (excluding China) in the next few quarters,” iFAST says.

iFAST has declared a dividend of 0.68 cents per share for the quarter.

As at 11.26am, iFAST is trading flat at 93 cents.

 

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