- Venture capital firm Fatfish (FFG) posted weaker revenues but stronger profits in its annual report for the 2020 calendar year, released today
- The company flagged a 76 per cent fall in full-year revenue, from over $2.7 million in 2019 to less than $700,000 in 2020
- However, the company said this is mostly to do with how its accounting is done since it merged its Fatfish Global Ventures (FGV) subsidiary with Swedish company Abelco Investment Group
- Fatfish owns 50.1 per cent of Abelco, which in turn owns 100 per cent of FGV, so Fatfish no longer consolidates FGV and its subsidiaries
- This could explain why despite the lower revenue, profit increased some 14,000 per cent from an annual loss of $14.1 million in 2019 to a $44,500 profit in 2020
- Fatfish said it expects the way the COVID-19 pandemic has impacted shopping habits to bode well for its fintech and eCommerce investment portfolio
- Shares in Fatfish closed grey today at 10 cents
Venture capital firm Fatfish (FFG) posted weaker revenues but stronger profits in its annual report for the 2020 calendar year, released today.
The company flagged a major 76 per cent fall in full-year revenue from over $2.7 million in 2019 to less than $700,000 in 2020. However, at the same time, annual profits grew some 14,000 per cent.
In 2019, Fatfish posted a full-year loss of $14.1 million. In 2020, the company made a profit of just under $44,500.
On the same hand, annual earnings before interest, tax, depreciation and amortisation (EBITDA) improved to $377,000 in 2020 compared to a $13.4 million EBITDA loss the year before.
As such, it seems the weaker revenue is not so much a reflection of a struggling business but more the result of a change in how the company’s accounting is done — that is, at least according to Fatfish.
The company said since merging its Fatfish Global Ventures (FGV) subsidiary with Swedish company Abelco Investment Group, the group accounting treatment is different.
As it stands, Fatfish owns 50.1 per cent of Abelco, which in turn owns 100 per cent of FGC. This means Fatfish no longer consolidates FGV and its subsidiaries — hence the lower annual revenue figure.
Fatfish management said the COVID-19 pandemic has changed the way consumers purchase around the world, with a stronger trend in online purchases.
Given the FFG investment portfolio consists of online marketplaces, fintech businesses, eCommerce platforms and other digital ventures, the company said it believes this trend will bode well for its investee companies.
Fatfish recently launched a buy now, pay later (BNPL) service for corporates in South East Asia through its investee company, Smartfunding.
Shares in Fatfish Group dabbled in green territory several times throughout the day but ultimately closed grey at 10 cents. The company has a $94 million market cap.