TechFinancials is the next company to report on the outcome of the first half of 2019. The firm is reporting that its turnover in the six months ended on the 30th of June 2019 decreased to $2.07 million. The figure is materially lower when compared to the previous year when the company posted $3.78 million of revenues.
The company’s core software licensing business decreased by 62% to $410,000 from just above $1 million. The firm is explaining the decline with tightened regulation in the industry which was implemented in 2018.
A material drop in the business of its China-focused partner DragonFinancials, where revenues declined 46 percent to $850,000 in H1 2018, leading to a small loss of $150,000. TechFinancials owns 51% of the brand.
Meanwhile, the blockchain trading technology segment of TechFinancials also marked a decline, raking in $890,000. The revenue was lower by 31 percent when compared to the first half of 2018.
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The gross profit metric of TechFinancials was slashed in half in the first six months of this year, coming in at $1.31 million from $2.63 million in H1 2018. The gross margin during the period declined by seven points to 63 percent primarily due to the lower margin contribution from the B2C trading platform activity and lower margin in the blockchain segment.
The operating loss for the period was $1.12 million as revenues declined quicker than expenses. That said some of the costs are fixed overheads, while all operating expenses decreased in line with the decrease in revenues compared to H1 2018.
TechFinancials spent nearly $1 million in R&D, focusing on its product outside of the financial industry – Footies Ltd. Out of the total R&D expenditure, the company capitalized $400,000, all of which are related costs of the new product developed by Footies Ltd. the subsidiary is building a football ticketing solution based on blockchain technology.
“The Company continues to deepen its experience in blockchain-related projects through developing and providing some of the software components to Footies Ltd and through continuing to develop and maintain technology provided for CEDEX (the blockchain based diamond exchange),” CEO Asaf Lahav elaborated.