Ginsms Reports 1Q Financial Results
Sep 04, 2013 (Close-Up Media via COMTEX) --
Ginsms has announced its financial results for the first quarter ended June 30.
In a release on Aug. 29, the Company said that the acquisition of Inphosoft Group Pte was completed on Sept. 28, 2012. Ginsms's income statement for the quarter ended June 30, includes the operating results of Inphosoft Group Pte and its subsidiaries resulting in total revenue of $445,584, compared to $157,089 for the corresponding quarter the previous year.
Activities for the three-month period ended June 30, resulted in a net loss of $481,991, including a non-realized exchange gain of $19,762 and a non-cash charge to earnings of $290,549 representing accretion on obligations related to the convertible debentures and promissory notes issued in connection with the acquisition of Inphosoft. For the quarter ended June 30, 2012, the Company recorded a net loss of $48,035.
EBITDA of negative $79,852 for the quarter ended June 30. This is a deterioration of $57,308 compared to EBITDA of negative $22,544 during the corresponding quarter the previous year. The lower EBITDA principally reflect much higher losses due to lower revenue generated by the IOSMS platform and, principally but not exclusively, substantially higher professional fees incurred by the Group.
Volume of inter-SMS traffic for the three-month period ended June 30, was down by 76.7 percent to 5,543,603 from the same period the previous year. When compared to the previous quarter ended March 31, traffic is down 58.7 percent. This downward trend in SMS traffic is largely caused by cellphone users migrating to mobile instant messaging applications and the removal of bundle fees in the new agreements signed with the mobile network operators that came into effect on March 1, 2013.
Liquidity improved considerably with cash on hand of $670,500, down 30.6 percent from March 31. Net current assets as at June 30, were $687,209, compared to $797,995 as at March 31.
Revenue for the first quarter ending June 30, was $445,584, representing an increase of 183.7 percent, compared to $157,089 during the corresponding quarter the previous year. 260.3 percent of the increase is due to the inclusion for the first time of the revenue from Inphosoft in the consolidated statement of income as revenue from the Company's IOSMS activities, taken separately, declined by 76.6 percent. The decline in the revenue generated from the IOSMS platform is due to the less favourable terms of the contracts signed with mobile network operators that came into effect on 1st March 2013 as well as a 76.7 percent drop in SMS traffic during the quarter ended June 30, compared to the corresponding quarter the previous year.
Revenue from Inphosoft during that period aggregated $408,846 and is broken down as follow: Professional Services - $287,531 (70.3 percent), License fees - $6,681 (1.6 percent), and Support and Maintenance -$114,634 (28.1 percent). Professional Services essentially represent contract work provided customers for an array of software services and solutions including software installation services, software customization services, or the design and development of bespoke software solutions for customers.
The net loss for the quarter ended June 30, amounted to $481,991, compared to a loss of $48,035 during the same quarter the previous year. The loss for the first quarter this fiscal year includes a non-cash charge to earnings of $290,549 representing accretion on obligations related to the convertible debentures and promissory notes issued in connection with the acquisition of Inphosoft.
EBITDA for the first quarter ended June 30, amounted to negative $79,852 while EBITDA for the corresponding period the previous year which showed a deficit of $22,544. These results underline a much improved gross profit picture with gross income increasing by 183.7 percent to $445,584, the result of substantially higher gross profit margins at Inphosoft which, on a fully consolidated basis, translate into a gross margin of 67.6 percent, compared to 55.0 percent during the corresponding quarter the previous year.
Other than lower revenue generated by the IOSMS platform, the loss of $481,991 reported during the period reflects higher operating expenses albeit more than offset, as mentioned above, by a much higher gross income. With Inphosoft, salaries and wages jumped by 376.7 percent to $187,450, professional fees are increased by 104.3 percent to $52,614, and general and administrative expenses are up 688.6 percent to $129,460. Consultancy fees incurred a slight increase of 14.5 percent to $31,395. The consolidation of Inphosoft also resulted in higher amortization charges which amounted to $107,425, compared to $26,381 for the corresponding quarter the previous year.
Ginsms is a mobile technology and services company
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