MICT, Inc.
Q4 2020 Earnings Call Transcript

Published: 31 Mar 2021

[Operator:]

Thank you. Good morning. And thank you for calling in to review MICT’s Fourth Quarter 2020 Results. Management will provide an overview of the results. Importantly, there is a slide presentation which management will use during their overview. This presentation can be found on the Investor Relations section of the company’s website, www.mict-inc.com, under Events and Presentations. I will now take a brief moment to read the Safe Harbor statement. During the course of this call, management will express certain implied forward-looking statements within the Private Securities Litigation Reform Act of 1995 and other U.S. federal securities laws. These forward-looking statements include, but are not limited to those statements regarding our growth opportunities, whether organic growth or strategic acquisitions, future business and financial results relating to timing of and revenues and margins achieved in the fintech business, the potential size and demands in the markets in which we operate and Micronet’s future ability to generate its revenues based on currents leads and pilots.

[Darren Mercer:]

Thank you, and good morning, everybody. Slide three. We have made significant progress in 2020. The result of that progress was the acquisition of Global Fintech Holdings Intermediate or GFHI in July of 2020. That acquisition facilitated our ability to transition our business focus from the telematic business to the rapidly growing fintech market throughout Southeast Asia, particularly China. The acquisition provided us with a proprietary technology platform and together with a database of several million users that are actively trading stocks and other financial securities in China opened up a significant marketing opportunity for the company. This has been the key driver for all of our activities since and created the opportunity to markedly strengthen our balance sheets. Within the fintech space, we are currently focused on three key verticals, namely insurance, online stock trading and the commodities trading on futures markets, all with an emphasis in these activities in Asia with a focus on China. During October, we began acquiring a strategically significant Hong Kong based broker dealer that ultimately provided us with a licensed platform in Hong Kong to accelerate our entry into the stock trading markets. Additionally, in late December, and ahead of schedule, we launched our insurance platform in China, which has experienced strong accelerate since. This has been supported in part by a number of key brokerage insurance partnerships also signed in December.

[Moran Amran:]

Thank you, Darren. Revenue in the fourth quarter benefits significantly by the insurance division, which lands in the late December and contributed in excess of $299,000. Gross profit was negative $60,000 derived by an increase in cost of revenue. In the fourth quarter, our investment in R&D was $254,000, an increase from $6,000 in the year ago period. This increase was due to investment made as we enter the China fintech market. General and administrative expense increased to $7.9 million, up from $866,000 in the prior year, as we increase spending and acquired a support our new fintech business. Total net loss in the fourth quarter was $7.6 million, as compared to a loss of $966,000 in the fourth quarter of last year. Back to you, Darren.

[Darren Mercer:]

Thank you, Moran. In conclusion, 2020 was a pivotal year for MICT where we made the transition from telematics to fintech in the Asia market in a focus on China and established a significant cash balance to execute and support our internal and external growth strategy.

[Q -:]

[Operator:]

Thank you. This concludes MICT Incorporated fourth quarter 2020 results conference call. Thank you for your participation. You may go ahead and disconnect.