CTOS Digital posts 90% rise in Q2 earnings, declares 59 sen dividend

KUALA LUMPUR: CTOS Digital Bhd recorded a 89.86% jump in its net profit for the second quarter ended June 30, 2022 to RM22.48 million compared with RM11.84 million in the same quarter last year due to strong performance from its core business.

The group’s revenue grew by 22.89% to RM46.51 million from RM37.85 million in the corresponding quarter in 2021 due to a strong performance from its core business across all three customer segments being key accounts, commercial and direct-to-consumer.

For the six months period, it recorded a net profit of RM34.96 million, an increase of 79.03% compared to its net profit of RM19.53 million year-on year, while its revenue of RM89.19 million was 17.66% higher compared to the revenue of RM75.80 million in the corresponding period of the previous year.

CTOS Digital declared a second interim single-tier dividend of 59 sen per share in respect of the three months financial period ending June 30, 2022, which will be paid on Sept 13, 2022. The total payout amounts to RM13.6 million, representing a payout ratio of 61%. The entitlement date for the dividend payment is on Aug 16, 2022.

Its group CEO Eric Hamburger commented that it delivered another strong set of financial performance in its Q2’22 as momentum ramps up across all three business segments driven by increased services penetration and expansion of customer base. Its analytics and digital products also continue to help drive its results.

“With the traction shown in the first half of 2022 and accelerating momentum moving into the second half of the year, we are on-track to deliver a solid performance in 2022 supported by business-as-usual growth, expansion into new verticals and reaping the harvest from our value accretive acquisitions. The emergence of digital banking, buy-now-pay-later services and other fintech activities will provide growth and business opportunities for our group. We are making good progress in our discussions with the successful digital bank licensees,” he said in a statement.

Additionally, the group is seeking shareholders’ approval in its upcoming EGM on the recently announced proposed acquisition of an additional 19.9% from Oscar Matrix Sdn Bhd and potentially up to another 30.9% from other shareholders of RAM Holdings Bhd. It currently holds 19.225% in RAM.

“We believe the proposed acquisitions will allow both CTOS Digital and RAM to leverage on each other’s expertise in credit assessment, data, analytics and digital solutions to provide a more comprehensive suite of products and services, thus enhancing the value proposition to each company’s customer bases. Upon shareholders’ approval, we target to complete the transactions by the third quarter. After this, we plan to use the next one to two years to digest our acquisitions and realise each company’s growth potential and maximise synergies,” said Hamburger.