iFAST More Than Quadrupled its 3Q 2023 Net Profit: 7 Things Investors Should Know About its Latest Results


Financial technology (fintech) company iFAST Corporation Limited (SGX: AIY) posted an impressive set of results for its latest quarter with net profit jumping more than four-fold compared to a year ago.

Here are seven highlights from iFAST’s earnings report that you need to know.

1. A sparkling set of earnings

For iFAST’s fiscal 2023 third quarter (3Q 2023) total revenue rose 23.8% year on year to S$66.2 million.

Part of the rise was contributed by a year-on-year tripling of interest revenue to almost S$4 million.

Total expenses rose just 11% year on year, resulting in operating profit soaring 263.2% year on year to S$11.2 million.

Net profit followed suit, more than quadrupling year on year to S$8.5 million.

For the first nine months of 2023 (9M 2023), net profit nearly tripled year on year to S$15.1 million.

Investors should note that 9M 2022 included an impairment loss of S$5.2 million on iFAST’s India associate.

Excluding this, net profit would have climbed 46.1% year on year.

To top it off, the fintech also saw its operating cash flow hit S$148.2 million in 9M 2023, significantly higher than the S$4.9 million generated in the same period last year.

Free cash flow for 9M 2023 came in at S$132.3 million, a sharp reversal from the free cash outflow of S$7.4 million in 9M 2022.

2. Assets under administration hit a record high

iFAST’s assets under administration (AUA) hit a record high, ending the quarter at S$19.12 billion.

This level of AUA was 12.6% higher than a year ago and is 1.7% above the previous quarter.

Net inflows were positive for 3Q 2023 despite the volatile market conditions and came in at S$751 million, up 34.4% from the previous quarter’s S$559 million.

For 9M 2023, net inflows totalled S$1.6 billion and were slightly lower than 9M 2022’s S$1.9 billion.

3. Maiden contribution from Hong Kong ePension contract

3Q 2023 saw a maiden, one-month contribution from the Hong Kong ePension contract.

As a recap, iFAST had snagged a contract from Hong Kong’s Mandatory Provident Fund (MPF) to digitalise the platform and migrate users over.

iFAST’s Hong Kong division saw its net revenue more than double year on year to S$12.7 million.

HK’s net profit for 3Q 2023 more than tripled year on year to S$6.8 million.

With the commencement of this contract, iFAST expects 2023’s profitability to be “substantially better” than 2022.

In addition, revenue and profitability for 2024 will show robust growth compared with this year.

4. A sharp increase in fixed-income turnover 

Bonds received strong attention during 3Q 2023 amid a rising interest rate environment.

This interest translated into a record quarter of net inflows for bonds, and fixed income turnover exceeded S$700 million during the quarter.

For 3Q 2023, bonds comprised nearly 10% of the group’s AUA, up sharply from just 5.6% a year ago.

5. Business developments in Singapore and Malaysia

There were also several interesting business developments across Singapore and Malaysia during the quarter.

For Singapore, the iG Markets (iGM) division launched a suite of new services including product financing, access to stocks and ETFs on the London Stock Exchange, and a new US-dollar auto-sweep facility to provide higher yields on idle cash.

Over in Malaysia, the B2B division saw its AUA hit a new record high and is also pursuing an expansion strategy by establishing new partnerships with institutional clients.

iFAST’s Malaysia division is slated to launch a new mobile app for corporate customers to streamline online transactions and the approval process for corporate accounts.

6. Encouraging progress at iFAST Global Bank

iFAST Global Bank posted an admirable performance even though it remained loss-making.

Net revenue from this division grew 49.4% year on year to S$3.3 million for 3Q 2023, driven by the new digital transaction and personal banking launches.

Customer deposits also jumped 140.4% quarter on quarter to S$232.1 million as of 30 September 2023.

The group expects iFAST Global Bank to be unprofitable in the next three quarters but management believes that this division will play a major role in the fintech’s growth in the medium term, particularly beyond 2025.

7. Interim dividend kept constant

For 3Q 2023, the group declared an interim dividend of S$0.013, unchanged from a year ago.

iFAST’s trailing 12-month dividend stood at S$0.048, giving the fintech company a trailing dividend yield of 0.87%.

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Disclosure: Royston Yang owns shares of iFAST Corporation Limited.

The post iFAST More Than Quadrupled its 3Q 2023 Net Profit: 7 Things Investors Should Know About its Latest Results appeared first on The Smart Investor.