Company Delivers $451 Million in Revenue and
Continues its Business Expansion
Freedom Holding Corp. (the “Company”) (NASDAQ: FRHC), a
multinational diversified financial services holding company with a
presence through its subsidiaries in 22 countries, today announced
the results for their first quarter ended June 30, 2024 of fiscal
2025. Highlights include:
- $451 million in revenue
- Net income of $34 million or $0.57 per share, diluted
- Total expense of $409 million
- $8.5 billion in total assets as of end of quarter
- S&P outlook for Company’s core subsidiaries revised from
negative to positive and the Company’s outlook from negative to
stable
- Approximately 6,800 employees and 132 offices as of end of
quarter
- Launch of the Freedom Bank KZ mobile application SuperApp
- Board of directors adds three new members
Income Statement Highlights:
The Company recognized revenue of approximately $451 million for
the first quarter of fiscal 2025, compared to $316 million in the
first quarter of fiscal 2024, a 43% increase. The Company's total
expenses were approximately $409 million in the first quarter of
fiscal 2025 compared to $232 million for the same period last year,
an increase of approximately 77%.
Net income was approximately $34 million for the first quarter
of fiscal 2025 as compared to $68 million for the same period in
fiscal 2024, a 50% decrease, providing for basic and diluted
earnings per share of $0.58 and $0.57, respectively. This compares
to $1.16 and $1.15 for the same period last year. Weighted average
common shares outstanding used to compute diluted earnings per
share for the three-month periods ended June 30, 2024, and 2023
were 60.3 million and 59.3 million, respectively. The decrease in
net income was driven largely by an unrealized net loss of $64.9
million attributable to Kazakhstan sovereign bonds held in
proprietary trading portfolio, primarily as a consequence of market
price declines, as well as increased expenses, corresponding with
the growth and development of the Company’s business.
Balance Sheet Highlights:
Total assets were $8.5 billion at June 30, 2024, as compared to
$8.3 billion at March 31, 2024 and cash and cash equivalents
totaled $719 million at June 30, 2024, compared to $545 million at
March 31, 2024. Shareholder’s equity remained relatively constant
at approximately $1.2 billion as of each of June 30, 2024 and March
31, 2024.
“Our investments in people, systems, and the expansion of our
fintech ecosystem continues to bear fruit…”
Timur Turlov, the Company's founder and chief executive officer,
provided commentary on the quarter by stating, "As has been our
process for the past number of years, we continue to direct our
profits into the further expansion of our business and the first
quarter of fiscal 2025 was no exception. With a $177 million
increase in total expenses as compared to the same period last
year, we managed to contribute over $34 million to the bottom line
during the quarter. Our investments in people, systems, and the
expansion of our fintech ecosystem continues to bear fruit, which
is evidenced by a 188% increase in insurance underwriting income, a
51% increase in interest income, and a 17% increase in fee and
commission income, with these three being our largest sources of
revenue for the quarter.”
Turlov continued, “Consistent with our general growth, I’m
pleased to report that we have brought our global headcount to over
6,800 highly professional team members who support our business
expansion. This compares to 5,100 for the first quarter of last
year.”
“Our strongest contributor to our top line was interest income
of just over $226 million, followed by insurance underwriting
income of $129 million, and fee and commission income of $115
million. We were also pleased to note that we experienced an
increase in brokerage accounts to 532,000 from 399,000 in the same
period last year, of which there was an 81% increase in active
accounts.”
“…now our digital fintech platform includes our retail bank,
insurance companies, and a growing list of popular ancillary
services that are contributing to the growth of our customer
base.”
Turlov continued, “Historically brokerage accounts set the
foundation for the overall growth of our digital fintech platform,
but now our platform includes our retail bank, insurance companies,
and a growing list of popular ancillary services that are
contributing to the growth of our customer base. These include
on-line grocery, travel and entertainment services, additional
regional retail offerings, and planned telecommunications and media
service offerings. In support of this, in April of this year our
retail bank, Freedom Bank KZ, launched its SuperApp, a one-stop
shop of financial services that our customers can use to check
their account balances, review transaction histories, make
transfers and payments, open and manage deposits as well as have
real-time portfolio monitoring and access to a whole array of
investing support services at their fingertips. This is a win-win
scenario as our customers will gain the convenience of access to
needed products and services and we will gain significant amounts
of consumer data that will allow us to continue to build value-add
products that our customers will enjoy. We expect innovation like
this to be a significant driver of future growth.”
“…the quarter sets the stage for another exemplary
year...”
“Overall, we are pleased with the results of the quarter which
sets the stage for another exemplary year for Freedom Holding Corp.
We continue to position our company for success by making strategic
investments to accelerate our organic growth and by winning the
battle for expertise, both operationally and from a corporate
governance perspective, in a highly competitive talent marketplace.
In June of this year, we welcomed three new members to our board of
directors: Dr. Kairat Kelimbetov, Andrew Gamble, and Philippe
Vogeleer, all with deep experience and with diverse backgrounds
which we expect will be instrumental in helping guide the continued
expansion strategy of our company. Going forward, we will continue
to pursue organic growth objectives and review potential
acquisition targets and opportunities for additional international
expansion. We are encouraged about the future prospects of the
enterprise,” Turlov concluded.
Additional Select First Quarter Fiscal 2025
Highlights:
The Company’s Banking segment, comprising Freedom Bank KZ,
experienced a 3% decrease in assets, a 5% decrease in its loan
portfolio and an 11% increase in its deposit portfolio during the
quarter, in comparison with the year-end of fiscal 2024. The Bank’s
trading portfolio also decreased by 8%, driven primarily by the
volatility on the debt instruments in its proprietary trading
portfolio.
As of June 30, 2024 and March 31, 2024, the Company’s Insurance
segment comprising Freedom Life and Freedom Insurance reported
assets of $546 million and $411 million in liabilities and $530
million in assets and $403 million in liabilities, respectively.
Active contracts in the life insurance business grew to 888,787
from 616,000 from in the previous year and general insurance grew
to 276,234 at June 30, 2024 from 191,000 at March 31, 2024, with
the increase driven primarily by innovative and competitive
products as well as significant investments in our sales force and
related advertising initiatives in the Kazakhstan market.
About Freedom Holding Corp.
Freedom Holding Corp., a Nevada corporation, is a diversified
financial services holding company conducting retail securities
brokerage, securities trading, investment research, investment
counseling, investment banking and underwriting services,
mortgages, insurance, and commercial banking as well as several
ancillary businesses which complement its core financial services
businesses, all through its subsidiaries, operating under the name
Freedom24 in Europe, Freedom Broker in, Central Asia and Freedom
Capital Markets in the United States. Through its subsidiaries,
Freedom Holding Corp. employs more than 6,800 people and is a
professional participant in the Kazakhstan Stock Exchange, the
Astana International Exchange, the Republican Stock Exchange of
Tashkent, the Uzbek Republican Currency Exchange, and is a member
of the New York Stock Exchange and the Nasdaq Stock Exchange.
Freedom Holding Corp. is incorporated in Nevada, and has
operations and subsidiaries in 22 countries, including Kazakhstan,
the United States, Cyprus, Poland, Spain, Uzbekistan, and
Azerbaijan, among others.
Freedom Holding Corp.'s common shares are registered with the
United States Securities and Exchange Commission and are traded
under the symbol FRHC on the Nasdaq Capital Market, operated by
Nasdaq, Inc.
To learn more about Freedom Holding Corp., visit
www.freedomholdingcorp.com.
Cautionary Note Regarding Forward-Looking Statements
This release contains "forward-looking" statements, including
with respect to Freedom Holding Corp.'s potential for future growth
and success. All forward-looking statements are subject to
uncertainty and changes in circumstances. In some cases,
forward-looking statements can be identified by terminology such as
"expect," "new," "plan," "seek," and "will," or the negative of
such terms or other comparable terminology used in connection with
any discussion of future plans, actions, and events.
Forward-looking statements are not guarantees of future results or
performance and involve risks, assumptions, and uncertainties that
could cause actual events or results to differ materially from the
events or results described in, or anticipated by, the
forward-looking statements. Factors that could materially affect
such forward-looking statements include certain economic, business,
and regulatory risks and factors identified in the Company's
periodic and current reports filed with the U.S. Securities and
Exchange Commission. All forward-looking statements are made only
as of the date of this release and the Company assumes no
obligation to update forward-looking statements to reflect
subsequent events or circumstances. Readers should not place undue
reliance on these forward-looking statements.
Website Disclosure
Freedom Holding Corp. intends to use its website,
https://ir.freedomholdingcorp.com, as a means for disclosing
material non-public information and for complying with U.S.
Securities and Exchange Commission Regulation FD and other
disclosure obligations.
June 30, 2024
March 31, 2024
ASSETS
Cash and cash equivalents (including $257
and $203 from related parties)
$
718,678
$
545,084
Restricted cash (including $1,121 and $—
with related parties)
1,179,510
462,637
Trading securities (including $1,256 and
$1,326 with related parties)
3,393,936
3,688,620
Available-for-sale securities, at fair
value
262,860
216,621
Margin lending, brokerage and other
receivables, net (including $37,836 and $22,039 due from related
parties)
1,217,885
1,660,275
Loans issued (including $136,558 and
$147,440 to related parties)
1,314,552
1,381,715
Fixed assets, net
100,474
83,002
Intangible assets, net
45,535
47,668
Goodwill
50,591
52,648
Right-of-use asset
35,006
36,324
Insurance contract assets
24,949
24,922
Other assets, net (including $23,057 and
$5,257 with related parties)
139,584
102,414
TOTAL ASSETS
$
8,483,560
$
8,301,930
LIABILITIES AND SHAREHOLDERS’
EQUITY
Securities repurchase agreement
obligations
$
2,558,794
$
2,756,596
Customer liabilities (including $84,970
and $44,127 to related parties)
2,699,912
2,273,830
Margin lending and trade payables
(including $255 and $507 to related parties)
836,309
867,880
Liabilities from insurance activity
(including $57 and $470 to related parties)
320,394
297,180
Current income tax liability
40,485
32,996
Debt securities issued
266,398
267,251
Lease liability
35,390
35,794
Liability arising from continuing
involvement
505,659
521,885
Other liabilities (including $8,349 and
$9,854 to related parties)
68,040
81,560
TOTAL LIABILITIES
$
7,331,381
$
7,134,972
Commitments and Contingent Liabilities
(Note 22)
—
—
SHAREHOLDERS’ EQUITY
Preferred stock - $0.001 par value;
20,000,000 shares authorized, no shares issued or outstanding
—
—
Common stock - $0.001 par value;
500,000,000 shares authorized; 60,721,010 shares issued and
outstanding as of June 30, 2024, and 60,321,813 shares issued and
outstanding as of March 31, 2024, respectively
60
60
Additional paid in capital
197,205
183,788
Retained earnings
1,033,140
998,740
Accumulated other comprehensive loss
(81,393
)
(18,938
)
TOTAL FRHC SHAREHOLDERS’ EQUITY
$
1,149,012
$
1,163,650
Non-controlling interest
3,167
3,308
TOTAL SHAREHOLDERS’ EQUITY
$
1,152,179
$
1,166,958
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
8,483,560
$
8,301,930
Three Months Ended June
30,
2024
2023
Revenue:
Fee and commission income (including $866
and $15,896 from related parties)
$
115,489
$
98,703
Net (loss)/gain on trading securities
(52,102
)
31,816
Interest income (including $270 and $5,352
from related parties)
226,004
149,349
Insurance underwriting income
129,408
44,889
Net gain on foreign exchange
operations
8,089
19,301
Net gain/(loss) on derivative
12,494
(30,605
)
Other income
11,333
2,757
TOTAL REVENUE, NET
$
450,715
$
316,210
Expense:
Fee and commission expense (including $157
and $99 from related parties)
$
80,147
$
28,684
Interest expense (including $381 and $168
from related parties)
145,718
95,046
Insurance claims incurred, net of
reinsurance
47,309
21,514
Payroll and bonuses
57,524
31,630
Professional services
7,268
6,625
Stock compensation expense
10,615
1,233
Advertising expense
17,201
8,100
General and administrative expense
(including $2,725 and $478 from related parties)
45,105
24,475
(Recovery of)/provision for allowance for
expected credit losses
(1,770
)
14,326
TOTAL EXPENSE
$
409,117
$
231,633
INCOME BEFORE INCOME TAX
41,598
84,577
Income tax expense
(7,339
)
(16,656
)
NET INCOME
$
34,259
$
67,921
Less: Net loss attributable to
non-controlling interest in subsidiary
(141
)
(181
)
NET INCOME ATTRIBUTABLE TO COMMON
SHAREHOLDERS
$
34,400
$
68,102
OTHER COMPREHENSIVE INCOME
Change in unrealized gain on investments
available-for-sale, net of tax effect
3,374
2,239
Reclassification adjustment for net
realized loss on available-for-sale investments disposed of in the
period, net of tax effect
(18
)
(958
)
Foreign currency translation
adjustments
(65,811
)
(1,760
)
OTHER COMPREHENSIVE LOSS
(62,455
)
(479
)
COMPREHENSIVE (LOSS)/INCOME BEFORE
NON-CONTROLLING INTERESTS
$
(28,196
)
$
67,442
Less: Comprehensive loss attributable to
non-controlling interest in subsidiary
(141
)
(181
)
COMPREHENSIVE (LOSS)/INCOME
ATTRIBUTABLE TO COMMON SHAREHOLDERS
$
(28,055
)
$
67,623
EARNINGS PER COMMON SHARE (In U.S.
dollars):
Earnings per common share - basic
0.58
1.16
Earnings per common share - diluted
0.57
1.15
Weighted average number of shares
(basic)
59,258,085
58,512,215
Weighted average number of shares
(diluted)
60,255,593
59,293,691
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808856504/en/
Ramina Fakhrutdinova (KZ) Public Relations
Freedom Finance JSC +7 777 377 8868
pr@ffin.kz
Natalia Kharlashina Public Relations Freedom
Holding Corp. +7 701 364 1454
prglobal@ffin.kz
Al Palombo (US) Global Communications Chief
Freedom US Markets +1 212-980-4400, Ext. 1013
apalombo@freedomusmkts.com
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