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.