TRG Pakistan Declares Massive Rs 11.47 Billion Loss in 1HFY24

TRG Pakistan Declares Massive Rs 11.47 Billion Loss in 1HFY24

Karachi, March 1, 2024 – TRG Pakistan Limited, a leading player in the technology and business process outsourcing industry, has reported a staggering loss of Rs 11.47 billion for the first half (July – December) of the fiscal year 2023-24.

The announcement came through a financial statement submitted to the Pakistan Stock Exchange (PSX), showcasing a sharp contrast from the significant profit of Rs 14.5 billion reported in the corresponding period of the previous fiscal year.

The primary contributor to the substantial loss is attributed to the value of the Company’s share in its associate, The Resource Group International Limited (TRGIL), which serves as its sole operating asset. As of December 31, 2023, the value of TRG Pakistan’s share in TRGIL stands at Rs 64.7 billion, marking a decline from Rs 78.1 billion on June 30, 2023, and Rs 68.1 billion on September 30, 2023. This represents a decrease of Rs 13.4 billion and Rs 3.4 billion, respectively.

The decrease is mainly a result of the loss incurred from TRGIL during the six-month period. This loss is primarily associated with the diminishing accounting value of the AI Software Business due to a decline in global industry multiples within the sector. Additionally, the decrease in the public share price of Ibex, another subsidiary of TRG Pakistan, over the period also contributed to this decline.

Apart from its stake in TRGIL, TRG Pakistan possesses other assets totaling Rs 0.03 billion and liabilities of Rs 10.7 billion, primarily related to deferred taxes. This results in net assets amounting to Rs 54 billion.

The income statement of TRG Pakistan is predominantly influenced by the fluctuations in the value of its share in TRGIL. The Company’s share of the net loss in its equity accounted investee, TRGIL, amounted to Rs 12.3 billion. While the company recognized interest income of Rs 1.3 million, it incurred expenses of Rs 135.1 million. A deferred tax reversal of Rs 1.8 billion during the period resulted in an overall net loss of Rs 10.6 billion for the six-month period ended December 31, 2023.

On a quarterly basis, the net loss for the quarter ended December 31, 2023, narrowed significantly to Rs 1.5 billion, attributed to an increase in the share price of the publicly listed subsidiary, Ibex.

The loss per share of TRG Pakistan was reported as Rs 19.43 per share for the six-month period ended December 31, 2023, and Rs 2.76 per share for the quarter ended December 31, 2023.

Looking ahead, TRG Pakistan is committed to enhancing the value of its remaining portfolio assets and aims to monetize them in due course to maximize value and liquidity for its shareholders. The company continues to focus on strategic measures to navigate the challenges in the industry and regain financial stability.