Meitav Investment House (MTAV) Q1 2022 earnings summary

Executive summary

• Assets under management reached a record ₪223.5bn at March 31, 2022, despite market declines; quarterly provident and education-fund inflows exceeded ₪4bn.

• Q1 revenue was ₪286m on the reported comparison, while revenue including nostro activity and excluding legal-claim reimbursements was ₪284m; adjusted EBITDA was ₪81m.

• Net income was ₪31m and net income attributable to shareholders was ₪26m; higher costs and softer credit and brokerage revenue weighed on results.

Financial highlights

• Revenue was ₪286m vs. ₪281m YoY; operating profit was ₪69m vs. ₪91m on a comparable basis excluding legal-claim refunds, and operating expenses rose to ₪217m from ₪190m.

• On the basis including nostro activity and excluding legal-claim reimbursements, revenue was ₪284m vs. ₪294m in Q1 2021 and ₪290m in Q4 2021; adjusted EBITDA was ₪81m.

• Net income was ₪31m vs. ₪30m; attributable income was ₪26m, and basic and diluted EPS were ₪0.40 vs. ₪0.20.

• Q1 included an ~₪8m gain on sale of a consolidated investment and an ~₪4m gain from reduced ownership in an equity-accounted investee; adjusted EBITDA excluded these gains and other specified items.

• Consolidated operating cash flow was negative ₪108m vs. positive ₪91m a year earlier; financing cash flow was positive ₪118m, including Peninsula bond issuance.

Outlook and guidance

• Quarterly provident and education-fund inflows were expected to continue above ₪4bn during 2022; revenue was described as running at an annual pace above ₪1bn.

• Peninsula planned a Series D bond issue of up to ₪150m; timing, completion and amount remained uncertain. The board said Peninsula’s negative operating cash flow reflected its lending cycle and shift from bank credit to bonds, not a liquidity problem.

• Despite standalone negative working capital of ₪372m, no difficulty meeting obligations was expected; consolidated working capital was positive ₪147m.