Thursday 13 August, 2020

ISP Finance's bottom line hit as clients face difficulties under COVID

ISP Limited, in its newly released annual report, says challenges faced by its clients under coronavirus (COVID-19) conditions have affected its bottom-line.

Company chairman, Clifton Cameron said though ISP had been growing its loan portfolio by diversifying its product offerings and creating new revenue streams – this was all affected - as small businesses encountered difficulties during March.

For ISP, its loan portfolio had grown during the year ended December 31, 2019, by 13.7 per cent from $551 million in 2018 to $627 million. Revenue increased by 19.8 per cent from $307 million in 2018 to $367 million in 2019.

By March 2020, the economy was affected by COVID-19, and small businesses and employers began to report extreme difficulties in meeting their obligation to ISP on a timely basis, according to Cameron.

IFRS accounting rules require adequate provisioning, as such, this led to new charges of $159.3 million in 2019. The result was an increase of over 146 per cent in loan provisions year-over-year.

The chairman also said this led to a decrease of $20 million in the company’s net profit from $43 million in 2018 to $23 million in 2019.

Financials for the March quarter for ISP are not yet available to the public.

Cameron said despite the impact of higher loan provisioning to ISP’s bottom-line, the company is planning to invest in improved technology and human resource development.

“As the country slowly returns to a new normal after the advent of COVID-19, we are convinced that this strategy will serve us well in an increasingly competitive and challenging business environment,” Cameron said.

 

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