Tenet Fintech Group (CSE: PKK) last night released its first quarter 2022 financial results. While the company managed to post modest revenue growth on a sequential basis, the big story from the results is that the company cut its guidance for 2022 rather significantly.
Revenues for the first quarter came in at $34.7 million, a 5% improvement over the $33.0 million recorded in the fourth quarter, and a significant improvement over the $14.2 million recorded in the year-ago period. The growth is said to be a function of the continued expansion of the firms offerings within China.
While the company does not directly pull out its cost of goods sold to provide a gross margin figure, the firm reported a cost of service of $30.0 million for the three month period. Expenses during the period in aggregate amounted to $37.4 million, lead by cost of service as mentioned above, as well as salaries and fringe benefits of $2.3 million and amortization of intangible assets of $1.5 million.
After income tax expenses, the firm posted a net loss of $3.4 million for the three month period, while posting negative adjusted EBITDA of $0.6 million.
The big story however is the firms revised guidance that was issued last night. Revenue forecasts were slashed dramatically, from $345 million to that of just $210 million, a cut of 39%. EBITDA meanwhile is to now come in at just $6.5 million, a 92% decrease, while the prior guidance of a net income of $51.4 million has now been revised to a net loss of $11.3 million.
“Although the demand for the services offered through our Business Hub™ continues to grow as expected in China, a combination of events that have occurred over the past seven months have dramatically altered our fundraising plans, causing delays in the launch of our operations in Canada and our activities in the insurance vertical in China,” commented CEO Johnson Joseph on the guidance revision.
Tenet Fintech last traded at $2.75 on the CSE.
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