Automatic Bank Services Limited (SHVA) Q3 2023 earnings summary

Executive summary

• 9M revenue reached NIS 117.3m vs. NIS 87.3m; net income was NIS 24.1m vs. NIS 16.2m, while higher operating costs and net finance expenses affected results.

• Q3 revenue was NIS 30.0m and net income NIS 5.4m; post-quarter war-related declines in card activity were expected to pressure Q4 and FY2023 results if sustained.

Financial highlights

• Q3 revenue NIS 30.025m vs. NIS 35.937m; operating profit NIS 10.917m vs. NIS 11.609m; net income NIS 5.410m vs. NIS 8.691m; EPS NIS 0.14 vs. NIS 0.22.

• 9M revenue NIS 117.283m vs. NIS 87.257m; operating profit NIS 45.831m vs. NIS 34.787m; net income NIS 24.085m vs. NIS 16.189m; EPS NIS 0.60 vs. NIS 0.40.

• 9M finance expenses, net, were NIS 11.391m vs. NIS 10.532m; the prior-year comparison included a NIS 3.357m net finance gain for FY2022.

• 9M operating expenses rose to NIS 71.452m from NIS 52.470m, driven mainly by staffing for the separation and strategy implementation, technology infrastructure, and depreciation and amortization.

Outlook and guidance

• From May 1, 2023, tariff changes were expected to positively affect revenue and operating profit; the effect was an estimate and remained subject to uncertainty.

• After the October 7 outbreak of war, card activity fell; if the decline continued, a material negative effect on Q4 2023 revenue and profitability, and FY2023 results, was expected.

• Operations continued under a hybrid wartime model, with services running regularly and no material workforce impact reported; financial resilience was supported by cash, deposits and marketable securities, with no near-term need for external credit expected.