Triterras Inc. (OTC Expert Market: TRIRF)
(“Triterras” or the “Company”), a leading fintech company focused
on trade and trade finance, today reported its unaudited interim
financial results for the six-months ended August 31, 2021.
“Our six-month results demonstrate the
resiliency of our business as we generated positive net income,
adjusted EBITDA and operating cash flow before changes in working
capital, despite the unprecedented challenges in our industry that
we noted in our earnings release from March 2022,” said Triterras’
Chairman and CEO Srinivas Koneru. “We are proactively optimizing
the technological suite of our Kratos™ platform by improving
offerings and adding capabilities to attract new lenders and
borrowers, and further expanding our network and revenue
potential.”
Mr. Srinivas continued, “We are also continuing
to progress several financial and corporate governance initiatives.
We are evaluating alternatives for trading of our securities in the
U.S., including pursuing relisting on Nasdaq and applying for
trading of our securities on the OTCQX exchange. We are hosting our
Annual General Meeting virtually on May 5, 2022, and we also
recently established a Risk Committee within our Board of Directors
to monitor and approve risk management framework and practices for
Triterras.”
Alvin Tan, Chief Financial Officer, commented,
“We are pleased with the progress we have made in improving the
management of our audit process. We were able to complete the
six-month financial review with our auditors in a reasonable time
frame following the March 7, 2022 filing of our annual report on
Form 20-F, and we are already hard at work on completing the audit
of our financials for the fiscal year ended February 28, 2022.”
Financial Highlights for the Six-Months
Ended August 31, 2021
- Revenues of
$22.9 million, a 3% decrease from the prior year comparable
period.
- Net income of
$27.3 million, or $0.35 per share of the Company’s Ordinary Shares.
Net income included a $25.3 million non-cash gain related to the
change in fair value of our warrant liabilities and $3.9 million in
non-cash impairment charges. General and administrative expenses
included elevated legal expenses of $5.2 million and consultancy
fees of $1.6 million, primarily as a result of the costs of an
internal investigation by the Company’s Audit Committee of the
Board of Directors and the costs of litigation and compliance
support.
- Generated $8.0
million in net cash from operating activities before changes in
working capital.
- Adjusted EBITDA
of $4.1 million, a 77% decrease from the prior year comparable
period (Adjusted EBITDA is a measure not recognized by
International Financial Reporting Standards (IFRS); see “Use and
Reconciliation of non-IFRS Financial Measures” below).
- Key Performance
Indicators (KPI):
- Total
transaction volume for the period was $4.03 billion compared to
$5.0 billion in the prior year comparable period. The trade finance
ratio was 36.4% of the total transaction volume compared to 21.4%
in the previous year comparable period. Trade finance volume for
the period was $1.08 billion vs. $0.88 billion in the previous year
comparable period as more customers entering into trades on Kratos™
sought financing through the platform.
- Average transaction fee for the
period of 0.57% compared to 0.48% in the comparable period in the
previous year.
Operational Highlights During Six-Months
Ended August 31, 2021
- During the
period, the Company completed the acquisition of Invoice Bazaar,
which the Company expects will facilitate a more rapid scaling of
the Company’s supply chain finance business and strengthened the
executive leadership team with experienced trade finance
executives.
-
The Company began building out a robust business development
organization with a vision to expand the scope of its business
beyond commodity traders and lenders. This significant investment
is expected to benefit the Company as it executes on the overall
business vision of building a diversified trade and supply chain
finance platform.
-
During the period, the Company instituted major steps to improve
the security of the Kratos™ platform, achieved ISO 27001:2013
certification, modernized the Amazon Web Services (“AWS”) hosting
of our Kratos™ platform and completed the transition from the
public Ethereum blockchain to the AWS-managed Hyperledger private
blockchain structure.
-
The Company believes that Triterras’ business model of bringing new
trade finance lending to underserved or underbanked market segments
is becoming increasingly recognized for its “world positive” social
impact. Additional trade finance lending is a critical economic
accelerator in emerging market economies.
- The
Kratos™ platform has generated close to $18 billion in Total
Transaction Volume since inception through August 2021.
Financial Results for Six-Months Ended
August 31, 2021
Revenues for the six-months ended August 31,
2021 were $22.9 million, compared to $23.7 million in the prior
year comparable period. Revenue was largely unchanged compared to
the prior year due to severe global supply chain constraints and
finance limitations in the broader trade finance industry primarily
driven by the impact that COVID-19 has had on the industry.
Operating expenses for the six-months ended
August 31, 2021 were $20.2 million, compared to $6.4 million in the
prior year comparable period. The increase was attributable to
elevated legal and consultancy expenses of $6.8 million and an
increase in staff expenses due to expansion of our business
development teams and increase personnel costs associated with
operating as a public company.
Net income for the six-months ended August 31,
2021 totaled $27.3 million, or $0.35 per share of the Company’s
Ordinary Shares, compared to net income of $14.2 million, or $2.84
per share of the Company’s Ordinary Shares, in the prior year
comparable period. Net income for the six-months ended August 31,
2021 included a $25.3 million non-cash gain related to the change
in fair value of warrant liabilities and $3.9 million in impairment
charge on trade receivables.
Net cash used by operating activities for the
six-months ended August 31, 2021 was $10.6 million, compared to
$13.2 million of net cash generated by operating activities in the
same prior year comparable period. The six-months ended August 31,
2021 included $18.6 million of cash used for working capital as
compared to $4.7 million in the prior year comparable period.
During the six-months ended August 31, 2021,
Triterras incurred $4.9 million in development capital
expenditures, $3.8 million in the acquisition of the Company’s
subsidiary, Invoice Bazaar, and $15.0 million in our investment in
Trade Credit Partners, a trade finance fund. During the six-months
ended August 31, 2020, Triterras incurred $7.5 million in
development capital expenditures.
As of August 31, 2021, cash and cash equivalents totaled $99.4
million and the Company had no debt.
Listing of Triterras
Securities
As previously disclosed, the Company submitted
an application for trading its shares and warrants on the OTCQX
exchange and is still awaiting the evaluation of such application.
Additionally, Triterras continues to pursue a relisting on Nasdaq
through a full application process. The Company has retained
outside advisors to assist in these relisting applications.
Conference Call
Triterras management will host a conference call
on Monday, April 25, 2022 at 5:30 p.m. Eastern time. Interested
parties may submit questions in advance of the conference call by
emailing IR@triterras.com. The company requests that interested
parties submit questions by Friday, April 22, 2022, 8 AM EST (8 PM
Singapore time)
Conference Call Information:Date: Monday, April
25, 2022Time: 5:30 p.m. Eastern time (2:30 p.m. Pacific time)U.S.
dial-in: (833) 540-1170International dial-in: (346)
265-0410Conference ID: 4488092
A live audio webcast of the conference call will
be available in listen-only mode simultaneously and available for
replay here and via the investor relations page of the company’s
website here.
Please call the conference telephone number five
minutes prior to the start time. An operator will register
your name and organization.
A replay of the call will be available after
8:30 p.m. U.S. Eastern time on the same day through 8:30 p.m. U.S.
Eastern time on May 9, 2022.
Replay of Conference Call:U.S. replay dial-in:
(855) 859-2056International replay dial-in: (404) 537-3406Replay
ID: 4488092
About Triterras
Triterras is a leading fintech company focused on
trade and trade finance. It launched and operates Kratos™—one of
the world’s largest commodity trading and trade finance platforms
that connects and enables traders to trade and source capital from
lenders directly online. For more information, please visit
www.triterras.com or email us at contact@triterras.com.
Forward Looking Statements
This press release includes “forward-looking
statements” within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995. Triterras’
actual results may differ from their expectations, estimates and
projections and consequently, you should not rely on these
forward-looking statements as predictions of future events. Words
such as “expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believes,” “predicts,” “potential,” “continue,” and similar
expressions are intended to identify such forward-looking
statements. These forward-looking statements include Triterras’
expectations with respect to future performance. These
forward-looking statements involve significant risks and
uncertainties that could cause the actual results to differ
materially from the expected results. Most of these factors are
outside Triterras’ control and are difficult to predict. Factors
that may cause such differences include but are not limited to
risks and uncertainties incorporated by reference under “Risk
Factors” in Triterras’ Form 20-F (SEC File No. 001-39693) filed
with the U.S. Securities and Exchange Commission (the “SEC”) on
March 7, 2022 and in Triterras’ other filings with the
SEC. Triterras cautions that the foregoing list of factors is
not exclusive. Triterras cautions readers not to place undue
reliance upon any forward-looking statements, which speak only as
of the date made. Triterras does not undertake or accept any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements to reflect any change
in its expectations or any change in events, conditions, or
circumstances on which any such statement is based.
Use and Reconciliation of Non-IFRS Financial
Measures
In addition to our results determined in
accordance with International Financial Reporting Standards
(“IFRS”), we believe the following non-IFRS financial measure is
useful in evaluating our operating performance. We present
“adjusted earnings before interest, taxes, depreciation and
amortisation” (“Adjusted EBITDA”) because we believe it assists
investors and analysts by facilitating comparison of
period-to-period operational performance on a consistent basis by
excluding items that we do not believe are indicative of our core
operating performance. The items excluded from Adjusted EBITDA may
have a material impact on our financial results. Certain of those
items are non-recurring, while others are non-cash in nature.
Accordingly, the Adjusted EBITDA is presented as supplemental
disclosure and should not be considered in isolation of, as a
substitute for, or superior to, the financial information prepared
in accordance with IFRS, and should be read in conjunction with the
financial statements furnished in our filings with the SEC.
Reconciliation of Adjusted EBITDA |
|
|
Six months ended August 31, 2021 |
|
Six months ended August 31, 2020 |
Profit for the period |
|
$ |
27,276,960 |
|
|
$ |
14,208,051 |
Depreciation |
|
|
262,808 |
|
|
|
13,802 |
Amortisation
of intangible assets |
|
|
539,825 |
|
|
|
15,059 |
Amortisation
of contract costs |
|
|
638,555 |
|
|
|
584,722 |
Net finance
costs |
|
|
52,194 |
|
|
|
70,357 |
Change in
fair value of warrant liabilities |
|
|
(25,317,732 |
) |
|
— |
Income tax
expense |
|
|
643,940 |
|
|
|
3,017,443 |
Adjusted
EBITDA |
|
$ |
4,096,550 |
|
|
$ |
17,909,434 |
|
|
|
|
|
Investor Relations Contacts:Jim Groh, Triterras
Inc.Mobile: +1 (678) 237-7101Email: ir@triterras.com
Gateway Investor RelationsMatt
Glover and Jeff Grampp, CFA(949) 574-3860TRIT@gatewayir.com
Media Contacts:Gregory Papajohn, Office of
Corporate Communications, Triterras, Inc.Mobile: +1 (917)
287-3626Email: press@triterras.com
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