Release Date: September 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Currency Exchange International Corp (CURN, Financial) reported a 19% increase in revenue for the third quarter of 2024 compared to the second quarter, consistent with typical growth patterns.
- The company's net income in the United States grew by 13% to $5.14 million, showcasing strong performance in the U.S. market.
- The payments product line in the United States experienced a significant growth of 27% in the last three months, driven by new customer acquisitions and increased activity from existing financial institutions.
- The company successfully added Maryland and Iowa to its network, expanding its online services to almost 93% of the United States population.
- Currency Exchange International Corp (CURN) is focusing on international expansion, with new clients in London and potential partnerships with sizable banks in the pipeline.
Negative Points
- Net income for the third quarter was slightly lower at $3.9 million compared to $4 million for the same period last year.
- The company's return on equity (ROE) decreased to 9% from 17% in the same period last year.
- Revenue in Canada declined by 6% in the third quarter compared to the same period last year, primarily due to reduced transactional volumes and economic pressures.
- Operating expenses increased by 1% for the three-month period ended July 31, 2024, slightly impacting profitability.
- The Mexican peso contributed to net foreign exchange losses for the three-month period ended July 31, 2024, contrasting with gains in the same period last year.
Q & A Highlights
Q: Could you expand on the Canadian revenue decline, particularly in payments, and discuss the impact of inflation and trust agreements?
A: Randolph Pinna, CEO, explained that the decline in payments revenue is due to reduced margins as fintechs push for lower spreads. Despite increased transaction volumes, profits are down. Inflation has led to cautious purchasing behavior among clients. The trust agreement with a multibillion-dollar trust company is in place but hasn't gained traction due to credit concerns from large banks.
Q: EBC has reported significant losses in the first and second quarters. Can you discuss the third quarter and future outlook?
A: Randolph Pinna, CEO, stated that EBC continues to face losses, but the focus is on returning to profitability by growing international revenues and securing new bank clients. The Canadian market remains stable, and efforts are underway to expand banknote and payment services.
Q: Have you considered upgrading your US listing from the pink tier to OTCQB?
A: Randolph Pinna, CEO, acknowledged the suggestion and mentioned that while they have considered SEC registration, the focus remains on profitability. They are open to exploring OTCQB for a broader audience without SEC registration.
Q: Why didn't you buy back any stock in the most recent quarter despite having authorization?
A: Gerhard Barnard, CFO, clarified that they did buy back shares in Q3, with a daily purchase limit of 1,325 shares. They continue to buy shares regularly, and the buyback program is ongoing.
Q: Would it make sense to highlight the buyback program in quarterly press releases?
A: Gerhard Barnard, CFO, agreed that it could be highlighted more in disclosures, noting that it is already mentioned in the MD&A. They will consider giving it more attention in future communications.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
