ISP Finance has seen a big 33 per cent dip in its first quarter profit indicative of the challenging and competitive business environment. 

During the January to March 2023 period, net profit declined to J$6.03 million, down from the J$8.95 million made during the comparative period last year. Pre-tax went down 33 per cent to J$6.89 million compared to J$10.23 million for 2022.

Net interest income marginally increased to J$97.14 million (2022: J$97.43 million) after interest expenses went up 93 per cent to J$13.77 million (2022: J$7.12 million). Total interest income increased 6 per cent to J$110.91 million (2022: J$104.55 million). 

Management reports that the increase in interest expenses was due to the successful additional debt raise secured in October 2022 to facilitate future expansion plans. Gross profit declined 2 per cent to J$92 million (2022: J$93.73 million) following an increase of 39 per cent in commission expense on loans, which closed at J$5.14 million (2022: J$3.70 million).

Slight increase in expenses

Total operating expenses went up marginally by 2 per cent to J$85.19 million (2022: J$83.50 million) despite the 29 per cent decline in allowance for credit loss to J$28.11 million (2022: J$24 million). Other operating expenses increased 24 per cent to J$34.41 million (2022: J$27.83 million).

Earnings per share (EPS) amounted to J$0.06 (2022: J$0.09). ISP’s stock closed the trading period yesterday at a price of $26.29 on June 5, 2023, with a corresponding P/E ratio of 50.45x.

Total assets as at March 31, 2023, increased 39% to J$1.07 billion (2022: J$773.81 million). The major contributors to this movement were ‘Cash & cash equivalents’, which increased 278% to J$206.69 million (2022: J$54.65 million) and ‘Loans, net of provisions for credit losses’, which increased 16% to J$789.51 million (2022: J$679.48 million).

Shareholders’ equity as at March 31, 2023, increased 12% to J$526.80 million (2022: J$472.09 million), resulting in a book value per share of J$5.02 (2022: J$4.50).