Triterras Inc. (OTC Expert Market: TRIRF)
(“Triterras” or the “Company”), a leading fintech company focused
on trade and trade finance, today reported its audited financial
results for the fiscal year ended February 28, 2021 (fiscal 2021).
“We are pleased to report our fiscal 2021
results, which represented a solid year for Triterras, highlighted
by revenue growth of 228% and adjusted EBITDA growth of 78%
compared to fiscal 2020, as our Kratos™ platform continued to scale
and expand its network of traders and lenders,” said Triterras’
Chairman and CEO Srinivas Koneru. “We view fiscal 2021 as a very
successful year considering industry headwinds that began to appear
towards the end of our fiscal year related to global supply chain
constraints and liquidity shortfalls in trade finance.”
Mr. Koneru continued, “The Kratos™ platform was
expanded in the fiscal year ended February 28, 2021 through
critical partnerships, such as with Western Union Business
Solutions for cross border payments, and significant investment in
our logistics and supply chain finance capabilities. By design, our
business model continues to bring new digital finance and lending
opportunities to underserved and underbanked markets globally,
which acts as a critical economic accelerator in emerging market
economies, and drives ‘world positive’ social impact.”
“Triterras has remained in a strong financial
position since the end of its fiscal 2021 with a profitable, cash
flow generating business that is debt free and had nearly $170
million in cash at the end of fiscal 2021, of which $36 million was
restricted for a stock buyback program which was concluded April
21, 2021.”
Fiscal Year 2021 Highlights and
Comparisons to Prior Fiscal Year
- Revenues
increased 228% to $55.5 million.
- Net income of
$45.3 million, or $0.74 per share, in fiscal year 2021, as compared
to net income of $13.6 million, or $4.07 per share, in the fiscal
year ended February 29, 2020 (fiscal 2020). Fiscal year 2021 net
income included a $26.1 million non-cash gain related to the change
in fair value of warrant liabilities and $6.9 million in non-cash
impairments. General and administrative expenses included elevated
legal expenses of $5.3 million, reflecting the costs of an internal
investigation by the Audit Committee of the Board of Directors and
the costs of litigation.
- Adjusted EBITDA
increased 78% to $27.0 million. (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 increased 163% to $10.0 billion. Trade
transaction volume increased 106% to $7.5 billion. The trade
finance ratio was 34.1% of the trade transaction volume which
represents $2.56 billion in trade finance volume.
- Average transaction fee of 0.55% in
fiscal year 2021 compared to 0.44% in the prior fiscal year.
Operational Highlights During Fiscal
Year 2021
- During fiscal
year 2021, the Company continually expanded product offerings on
the Kratos™ platform, including the addition of cross-border
payment processing by third parties.
-
The Company began building out a robust Business Development
organization with a vision to expand the scope of our business
beyond commodity traders and lenders.
-
The Company built a pipeline of Corporate Development projects in
M&A, joint ventures, partnerships and strategic alliances.
- 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.
Fiscal 2021 Financial
Results
Revenues for fiscal year 2021 increased 228% to
$55.5 million, compared to $16.9 million in fiscal year 2020. The
increase in revenues was primarily due to a $30.6 million increase
in trade finance module revenue and a $7.9 million increase in
trade discovery module revenue.
Operating expenses for fiscal year 2021 were
$30.0 million, compared to $1.7 million in fiscal year 2020. The
increase was due primarily to a $13.0 million increase in general
and administrative costs, a $4.1 million increase in cost of
revenue, a $4.3 million increase in marketing and sales costs, and
the increase in impairment reserves against trade receivables,
contract costs and intangible assets totaling $6.7 million.
Net income for fiscal year 2021 totaled $45.3
million, or $0.74 per share, compared to net income of $13.6
million, or $4.07 per share, in fiscal year 2020. Fiscal year 2021
net income included a $26.1 million non-cash gain related to the
change in fair value of warrant liabilities and $6.9 million in
impairment loss on trade receivables, intangible assets and
contract costs.
Net cash provided by operating activities for
fiscal year 2021 was $26.0 million, compared to $0.3 million in the
same year-ago period. Development capital expenditures for fiscal
year 2021 were $9.7 million compared to $0.3 million in fiscal year
2020.
As of February 28, 2021, cash and cash equivalents totaled
$169.7 million, including $36.0 million of restricted cash for the
stock buyback program which was concluded in April 2021, and the
Company had no debt.
Industry Headwinds and
Outlook
Triterras’ industry is experiencing
unprecedented challenges in the form of supply chain disruption and
extended business cycle times which began to demonstrate themselves
in earnest in early calendar year 2021 which was the Company’s
fourth quarter of fiscal 2021. The Company remains encouraged by
the strength of its business model; however, the Kratos™ ecosystem
has not been immune to these industry developments and transaction
volume and revenues were negatively impacted by these events. As a
result, the Company made several adjustments in its reserves,
booking additional impairments to its accounts receivable,
intangible assets and contract balances to reflect the possible
impacts of these industry developments. As Triterras has continued
to build out its technology and business development capabilities,
the Company believes it is well-positioned to capitalize on the
opportunities that will be presented by the expected industry
rebound and recovery.
Listing of Triterras
Securities.
As detailed in the Company’s Form 20-F filing
with the U.S. Securities and Exchange Commission today, the Company
has withdrawn its appeal to the Nasdaq Listing Council and has
opted instead to allow the Nasdaq delisting process to proceed and
to focus on the relisting of the ordinary shares and the warrants
on Nasdaq as soon as practicable through the normal relisting
application process.
The Company is currently reviewing alternatives
for trading of its securities in the United States while it pursues
relisting on Nasdaq, including submitting an application for
trading of its shares and warrants on the OTCQX exchange.
Investigation Outcome
As reported on October 28, 2021, Triterras’
Audit Committee has completed its investigation into allegations
made in a short report released in January 2021. After expending
considerable resources, time and energy conducting its
investigation and analyzing the work carried out by external
advisers, the Audit Committee has concluded that the allegations
contained in the short report lack either factual support or
material basis. Accordingly, the Audit Committee has concluded that
those allegations do not require additional action by the
Company.
Forthcoming Communications
The Company will file its Form 20-F Annual
Report for Fiscal Year 2021 with the U.S. Securities and Exchange
Commission today.
The Company is currently finalizing a review of
its financial results for the six months ended August 31, 2021 and
will be filing a Form 6-K inclusive of those results with the U.S.
Securities and Exchange Commission as soon as practicable. After
submission of that Form 6-K, Triterras management plans to announce
the scheduling of an investor conference call.
About TriterrasTriterras
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
commodity 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 StatementsThis
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 |
|
|
Year Ended |
|
Year Ended |
|
|
February 28, 2021 |
|
February 29, 2020 |
|
|
|
|
|
Profit/(Loss) for the year/period |
|
$ |
45,252,712 |
|
|
$ |
13,580,791 |
Depreciation |
|
|
147,295 |
|
|
|
1,284 |
Amortisation of intangible assets |
|
|
141,644 |
|
|
|
9,172 |
Amortisation of contract costs |
|
|
1,153,831 |
|
|
— |
Net finance costs |
|
|
82,479 |
|
|
|
1,475 |
Change in fair value of warrant liabilities |
|
|
(26,111,685 |
) |
|
— |
Income tax expense |
|
|
6,348,444 |
|
|
|
1,592,549 |
Adjusted EBITDA |
|
|
27,014,720 |
|
|
|
15,185,271 |
|
|
|
|
|
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.comMedia Contacts:Gregory
Papajohn, Office of Corporate Communications, Triterras,
Inc.Mobile: +1 (917) 287-3626Email: press@triterras.com
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