Currenc Group Inc.

on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. Now, I would like to turn the call over to Liz, Companies IR Council. Liz, please go ahead.

Thank you, operator. Hello, everyone, and welcome to Currency's Fall Year 2024 Earnings Conference Call. The company's results were issued earlier today and are posted online. Joining me on the call today is Mr. Ronnie Hoy, Currency's Chief Executive Officer. Mr. Hoy will provide an overview of the company's business and financial highlights, followed by a discussion of its business transformation and AI initiatives. Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call as we will make forward-looking statements. Also, please note that this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most comparable GAAP measures. Finally, please note that, unless otherwise stated, all figures mentioned during this call are in U.S. dollars. I will now turn the call over to Currency CEO, Mr. Ronnie Hoy. Ronnie, please go ahead.

Thank you, Liz. Hello, everyone. Thank you for joining us on our first earnings call as a publicly listed company. It's truly an important milestone for currency and a privilege to address our new and long-standing shareholders as we embark on this new chapter. We greatly appreciate your support and look forward to maintaining transparent, consistent communication with the investment community. Now, for those who are not well familiar with currencies, we are a fintech pioneer empowering financial institution which provides AI solutions worldwide. We've got our start in cross border digital remittance and airtime transfer. And now we are trying to build a global platform providing both individuals and financial institutions with safe cost effective ways to move money across the border for over 150 countries. Now we are undergoing a very important business transformation to extend our AI-powered offerings. While we still remain grounded in our broader mission of serving the financial institutions and advancing the financial inclusivity, going forward, we will be focusing on creating more AI-driven solutions that can reduce costs and boost the operating efficiency and enhance the customer experiences. Now let's review our existing core business line first. Today, I mean in the year 2024, our main bulk of businesses is the digital remittance business. It's conducted through our subsidiary Triangle, which we provide B2B and B2C cross-border transfers through a powerful unified API that can integrate over 5,000 banks and 35 new orders, which cover 150 countries. Now, in 2024, Triangle poses $11.4 million remittance transactions. And the total processing value, the TPV, reached $5.14 billion. Now, we close out 2024 on a high note in terms of remittance and strong growth and solid growth momentum. Both the transition volume and TVV total processing value increased in 2024. Which reflected strong, strong demands in key corridors such as UK, Hong Kong, Singapore, Korea and as well as some new markets throughout the Southeast Asia. Now. We have harnessed. the most attractive growth opportunities in cross-border payments, and we have built new partnerships, growing our active user base, despite the intense competition in the market. We also have improved our technological infrastructure during the year, which positioned us to deliver sustainable growth and more share the value. in the years ahead. We also have a global airtime transfer business for the moment, which also is provided by Triangle. And through another subsidiary, Watercool, we provide local airtime in Indonesia. Watercool serves around 128,000 customers as of the end of 2024. and distributed airtime with a total value of 14.5 million for the full year of 2024. Despite that the airtime segment has historically served as a key means of revenue diversification, going forward we strategically believe that we should emphasize this business so as to focus more on our resources on the digital remittance business as well as the new AI solutions business. Which we believe will deliver more stronger long-term growth opportunities and profitability. Now, some highlights for the full year of 2024. Firstly, the digital remittance business meaning those processed through Triangle, the total processing value was $5.14 billion, which compared to 2023, $4.54 billion was a 13.2% year-on-year growth. Total number of transactions increased to 11.4 million transactions for year 2024. Now, There may be a lot of confusion if you read the financial statement because the 2024 financial statement includes other subsidiaries like TNG Asia and GEA, which were already carved out before the completion of this grant. So I would like to draw your attention to those really meaningful figures for us, i.e., the total revenues excluding TNG Asia and GEA. Now for the total revenues excluding TNG Asia and GEA for the year 2024, it was 42 million, which represent to 2023 was a mild decline of 3.4%. And actually the decline was mostly due to a quite big decline of 23.8% in global airtime revenue. And I would also like to I remind everyone that as TNTAsia and GEA were already divested in the year of 2024, so in the fourth Q and going forward, their revenues will not be counted. And we should look at the revenue contributed by Triangle, Remittance Business, by Triangle and Watercooled Airtime Business, as well as the new AI solutions-driven revenue. Now, as the main part of our business was still the digital remittance, so let's focus on the digital remittance revenues and take a look at how it fair in the year of 2024. Now, the total remittance revenues excluding TNG Asia and GEA uh that means the revenues contribute mostly by uh digital remittance of triangle was 18.2 million for the full year of 2014 which compared to 2023 was an increase of 6.4 percent um despite that the tpv process the total processing value processed by a triangle was an increase of 13.2 percent During the period, the overall tick rate of Triangle declined from 0.43% of 2023 down to 0.37% in 2024. And the decline was mainly due to intense competition in the market that we want to be more and more price competitive. We want to launch more price concessions so as to capture more and more markets. And in other words, we are kind of sacrificing the tick rate in order to get a higher and higher business volume. And also, for the full year of 2024, the on-demand liquidity of RippleNet represents only 4.5% of total TV. So RippleNet um transaction is not a very significant segment of the company traditionally riposte pro carries a lower rate so with lower and lower uh repose odl flows uh we expect that the the overall rate should uh should be bottom out and uh we're expecting a bottom out uh or the declining trend of the tick rate will come to a halt. Now, let's go to another business, the global airtime business. This is actually, this was the segment that sustained a significant decline in the year 2024, and that contributed to a decrease in the total revenue. as well as the profitability. For the global airtime transfer revenue for the year of 2024, it was 9.3 million, which represents a 23.8% decline as compared to the year 2023. Now, the reason was that the market has changed quite a lot in the past three to four years, especially before and after the COVID. There was an increasing growing availability of free Wi-Fi in Southeast Asian countries, especially the Malaysian and Indonesia. And therefore, this led to a declining demand for the Malaysian-Indonesian airtime transfers. And therefore, that led to a decline in Franco's global airtime business in 2024. Now, we expect that decline will be kind of continuing, given the market has changed. And we expect that as more new markets like Africa or other countries, we might possibly explore or expand new markets there on the global airtime transfer business. However, we don't want to place too much emphasis on the airtime transfer business because of two reasons. One is that they carry a lower gross margin ratio. And the second is that they have an account receivable issue, meaning that we have to provide working capital for that. So we believe that it would be more... useful for the company to make use of the capital and allocate in expanding its digital remittance business as well as in expanding its new AI businesses. Now, on the other hand, if you look at the total direct cost for revenue, which exclude the TNGA and GA was $28.9 million for the year of 2024, which represents a decline of 8% as compared to 2023. This was in line with the decline in the global airtime business, but also it reflects that we have successfully controlled the direct payout ratio for our digital remittance business. So if you look at the direct payout rates for Triangle's remittance business. In the year 2023, we paid 0.15% to our payout agents for the digital remittance business. And 2024, the payout ratio declined to 0.12%, meaning that we can get a higher margin, despite that our overall degree was also declining. So if you look at the gross profit margin for the remittance business, which excluding TNG Asia and GEA, for the year of 2024, it was 62%, which compared to 58% of 2023. So we can see that our gross profit margin for the digital business actually improved because we have successfully controlled the payout ratio. As for the overall gross profit margin for the full year of 2014, it was 31%, which compared to 28% of 2013, it was also showing an increase. Now, another key figure that I'd like to draw your attention is the total operating expenses. Because if you look at the total operating expenses, it was a massive 42 million for the year 2024, which compared to 24 million for year 2023. Now the substantial increase was mainly due to a non-cash item, which is a 20.9 million in recognition of the incentive shares granted to employees because the scheme was granted only when there was a completion on the D-SPAC. So that's why we have the book, the Incent Share Scheme, the non-cash item in the year of 2004. And also there was a 1 million shares expenses, again, non-cash, funded to Roth because we have engaged them as our capital market advisor. Now, as I mentioned, stated before uh since currency diverse change h and ga in august and july last year so going forward the operating cost should reflect the the operating cost of triangle water cool and also the headquarters only also there might be new ai initiatives which would incur also the operating costs Now, therefore, I would like to draw your attention to the Triangle operating costs for the full year 2024, which was $12.9 million, representing an increase of 4.9% as compared to 2023. So the operating expenses of Triangle was actually increased in line with its total processing value. There's not much surprise on that. Now, for Watercool, their total operating cost was even lower, $1.2 million for 2024, which compared to $1.5 million for 2023. Again, it's because of our stringent cost control. Now, as for the headquarter, there are many expenses which I would come to later on, but One key expenses is the legal and professional fee. For year 2024 is 1.7 million. For 2023 is 4.7 million. Almost most of these legal and professional fees were incurred in connection to the SPAC. And much of the expenses were used in the extension of the SPAC before the completion. There's also another item that I need to elaborate a little bit. It's that there is an item called other income or other loss. Right now we have booked other loss, $2.2 million for a full year 2024. But out of this $2.2 million, there are many big items. Number one is do we have a gain on $20.5 million because we divest GA and so we have also divest the it's set to to to ripple and there are a number of impairment laws on the water cool triangle t nga ga and the intercomponent balance which i think more or less will clean up most of the intangible assets or a good view so that we could have a fresh start to look at in 2025 year ahead now um in order to to see how the company how what is the profitability or true profitability of the company we'd like to draw attention to the ebitda analysis now um If you look at the total EBITDA for the full year 2024, including TNGA and GA, there was a loss of $26.5 million. However, if you isolate the triangle and vertical, there was an EBITDA profit for 2024 of $2.05 million. Now, there was a loss on T&G Asia and GA combined EBITDA loss, but this will have no impact on the companies from the fourth quarter onward because they were already divest. Now, one key element to look at is the headquarter expenses and the EBITDA loss of $29.8 million, and that was the reason why the company has sustained such a big EBITDA loss. Out of the $25 million, $9.8 million, $20.9 million being the operating expenses for recognition of the incentive shares, which I've explained, $1 million also for non-cash item for recognition of shares given to Roth, And then there's a loss, income loss of 3.2 million. Now in the above, you see that there was a income loss, other loss of 2.2 million because the headquarter actually incurred 3.2, but there was a gain in the subsidiary level. That's why if you look at the headquarter level, there was a loss of 3.2 million. And there was a legal expenses in terms of asset amortization and other. So the real rental general mean expenses for the year was only 1.8 million. So going forward, we're expecting that 1.8 million will be quite a regular expenses for the headquarters because the headquarters has no real operations in it. So the actual headquarter expenses will be including the D&O insurance, the auditing fee, and also the director fee, the chief officer fee, chief officer salary, something like that. So it should be in the range of $1.8 to $2 million. For the year of 2010, if you look at the net loss, it was $38.8 million. But again, it was contributed mostly by the net loss of $32 million by the headquarter and adjustment, which I have explained before. And also there was a loss of $3.7 million contributed by TNG Asia and GEA. Now, again, as both TNG Asia and GEA fully divest, We are now moving forward. We will focus our strategy, our core competency in Trunco's remittance network and also in accelerating our AI new initiatives. So we believe that, number one, we have streamlined all our portfolio so as to enhance our top-line growth and profitability. And number two, being a listed company, we can have increased brand recognition and we can hopefully can find more strategic partners to work on us, work with us. So we believe that the from a macro perspective, the demand for digital remittance remain robust. But I think our AI initiatives can also create a whole lot of synergy for the company because we would help those financial institutions, especially in countries like Middle East, like Africa, to set up AI call center, AI HR training platform for them. Now, during this AI initiative, we recruit new clientele And these new clienteles could also be enrolled to become the clienteles for our digital remittance business. So we believe that the new AI business will create a whole lot of synergy for the digital remittance. And right now we are getting a fresh start and we hope that we can execute the strategic transformation. and capitalize on rising opportunities in AI era. So any question, Chris?