TRG Pakistan Ltd posted a loss of PkR12.6bn (LPS: PkR23.1) for 2QFY22

TRG Pakistan Ltd. (TRG) posted a loss of PkR12.6bn (LPS: PkR23.1) for 2QFY22 against a PAT of PkR32mn (EPS: PkR0.1) for 1QFY22 while PAT for 2QFY21 stood at PkR3.6bn (EPS: PkR6.6).

· The significant loss was majorly due to net loss on investment in TRGIL of PkR14.8bn. This was majorly due to mark to market of investment in IBEX after its share price slid down by 34% during 2QFY22, resulting in a loss of PkR6.8bn.

· Additional loss arrived from redemption of certain preference shares which were originally classified as debt owed to their holders. As value of these preference shares was more than the original issue price because of the high value of the underlying monetization, the difference between the redemption amount and the original issue price was reflected as a one-time finance charge.

· To note, on net basis, value of TRG’s investment in TRGIL decreased by PkR9.4bn where a positive exchange translation impact of PkR5.3bn provided some comfort.

· Divulging operational details in the directors’ report, management stated that revenues of Afiniti in 1HFY22 grew slightly while cost structure increased significantly resulting in a decline in adjusted EBITDA. Moving forward, management aims to rationalize cost base while revenue growth is expected to return from FY23.

· Revenue for IBEX stood at USD241mn for 1HFY22, increasing by 6.6% on YoY basis while net income for the period stood at USD11.5mn against a loss of USD0.9mn for the same period last year. The increase in revenue was majorly as a result of IBEX onboarding new clients in a bid to diversity its customer base while moving forward, margins are expected to improve

Courtesy – AKD Research

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