iCar Asia Ltd (ASX:ICQ) shares are languishing in mid-afternoon trade following the release of the company's full-year results. In earlier trade, the iCar Asia share price was trading nearly 5% higher at 34 cents. However, at the time of writing, the company's shares have retreated back to 32 cents, flat for the day with around an hour of trade remaining.
Let's take a look at how the car listings company performed over the period.
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Why is the iCar Asia share price stuck in neutral?
The iCar Asia share price is going nowhere today as investors seem ambivalent about the company's latest results.
According to its release, iCar Asia finished the year strongly after rebuilding momentum throughout 2020.
But for the six months ending 31 December 2020, iCar Asia reported revenue of $14 million, a decline of 5% year on year. The reduced earnings reflected a slowdown during most of the year due to government-mandated lockdown measures caused by COVID-19.
iCar Asia stated that all operating countries were faced with some kind of challenges. In light of this, iCar Asia launched new product innovations and focused on customer relationship management to minimise the negative impact.
As a result of the implemented initiatives, along with the gradual recovery, iCar Asia achieved its highest ever monthly revenue for December. Unaudited revenue for the month reached $1.8 million which represented a 27% increase on the prior corresponding period (pcp). Furthermore, the fourth quarter as a whole grew to monthly average revenue of $1.405 million. This is compared to $1.195 million in Q3, $899 million in Q2, and $1.186 million in Q1.
The group also undertook cost-containment measures to limit the damage from the pandemic. This included a drop in headcount, voluntary pay reductions, hiring freezes, and a cutback in marketing spend. From the stringent actions taken, iCar Asia recorded operating expenses at $19.2 million, a 9% reduction on the pcp.
However, while savings were made across the business, earnings before interest, tax, depreciation and amortisation (EBITDA) came to a loss of $6.4 million. This was a 5% improvement on FY19's result which saw EBITDA at $6.7 million in the red.
iCar Asia closed the year with a balance of $2.2 million in cash and equivalents. Around $13 million worth of undrawn facilities are available should the company wish to tap into its line of credit.
Management commentary
iCar Asia managing director and CEO Hamish Stone commented on the latest results. He said:
2020 was a year full of unprecedented challenges due to COVID-19. iCar Asia is pleased that we have managed these challenges well, as shown in the results for 2020.
With the recovery from COVID-19 gathering momentum and with access to more than adequate funding to grow the business, iCar Asia remains optimistic of ongoing growth in 2021 ahead and to continue to be the leading partner to the recovery of the ASEAN automotive markets.
Foolish takeaway
Management further noted that negotiations surrounding the non-binding proposal from Autohome Inc. to acquire iCar Asia are still ongoing. Autohome had put forward a proposal to purchase iCar Asia's entire issued share capital at 50 cents apiece.
The offer is subject to a number of conditions as well as court approval. iCar Asia stated it will update the market accordingly when further details arise.
The iCar Asia share price has risen nearly 7% over the last six months but has shed more than 11% over the past year.
