Karachi October 28 2022: TRG Pakistan income statement is primarily driven by the changes in value of shares in TRGIL, according to company filing to the exchange.
TRG Pakistan share of the net profit in equity accounted investee (i.e. TRGIL) was Rupees 6.9 billion, before taxation, which was mainly on account of mark-to-market gain booked on IBEX shares. The Company recognized interest income of Rupees 0.4 million in its income statement, whereas it incurred expenses of Rupees 19.8 million.
Deferred tax amounting to Rupees 1.0 billion was booked during the period. Overall, the Company posted net profit of Rupees 5.9 billion for the three-month period ended September 30, 2022.
The most significant item on Company balance sheet is the value of the Company’s share in its associate The Resource Group International Limited (TRGIL), company sole operating asset. As of September 30, 2022, the value of company share in TRGIL is Rupees 70.3 billion, representing an increase of Rupees 13.6 billion compared to Rupees 56.7 billion on June 30, 2022. This increase is driven both by profit from company associate as well as exchange gain on company investment due to a weaker rupee. In addition to the Company’s stake in TRGIL, it also has other assets of Rupees 0.02 billion and liabilities of Rupees 11.2 billion (primarily relating to deferred taxes) resulting in net assets of Rupees 59.1 billion.
Portfolio Company Ibex Limited (IBEX) continued to show strong performance and healthy growth. IBEX has been investing in additional capacity in response to increasing demand for its services. IBEX has been successful in transforming its business over the last 5 years, with a shift towards high-growth, emerging technology and new economy sectors as well as more traditional sectors that are embracing a digital-first transformation.
This has resulted in increased client diversification and higher growth from new brands that has more than offset the decline from mature, legacy clients. Company expect IBEX’s stock price on NASDAQ to reflect this growth, as the company delivers on performance in 2H FY23 and beyond.
Portfolio Company that provides Artificial Intelligence Enterprise Software (AI Software Business) has had historical revenue growth averaging over 50% annually during the last 8 years. In recent years, this growth has been lumpy with flat revenues during FY20 followed by revenue growth of nearly 300% during FY21 and flat growth again during FY22. In light of recent events, the plan for FY23 is to consolidate the FY22 growth and target additional enterprise deployments which would result in further growth in FY23. In addition, this business adopted strict cost control strategies starting early 2022, which has led to a strong pivot in profitability.
