Axis Auto Finance's Financial Performance Highlights for 2024
Axis Auto Finance Reports on Q4 2024 and Fiscal Year Results
Axis Auto Finance Inc. (“Axis” or the “Company”) (TSX: AXIS), a leading financial technology firm revolutionizing vehicle financing options for Canadians, has shared its financial achievements for the fourth quarter and the complete fiscal year of 2024.
Key Financial Highlights of Q4 2024
In the fourth quarter of 2024, Axis recorded total originations of $16.2 million, breaking down to $4.3 million in automotive originations paired with $11.9 million in equipment originations. This performance reflects the stringent credit conditions currently dominating the market.
While total revenues reached $8.1 million during this quarter, this figure represents a 19% decline when compared to the previous year. Notably, the Company faced a deferred tax asset write-off, leading to an income tax charge of $10.8 million within the quarter.
Axis's adjusted loss swelled to ($16.9) million, a substantial jump from the adjusted loss of ($1.4) million noted in the fourth quarter of the previous year. Consequently, the Company reported a net loss of ($17.7) million, contrasting with a net loss of ($20.1) million recorded during the same period in 2023.
Automotive and Equipment Financing Trends
The tightening credit atmosphere has impacted automotive loan originations, which fell to $4.3 million from a much higher figure of $30.3 million in the prior year's fourth quarter. It's essential to note that all auto loan originations for this quarter were maintained on balance sheet.
In terms of equipment financing, the Company reported a remarkable 63% decrease in originations for Q4 2024, totaling $11.9 million compared to $32.2 million the year prior. These equipment finance originations were primarily managed through third-party brokers or originated for syndication purposes.
Fiscal Year 2024 Financial Performance
For the fiscal year concluding June 30, 2024, total originations reached $109.5 million. The breakdown included $28.1 million for automotive and an impressive $81.4 million in equipment financing. However, the overall figure represented a significant downturn from previous fiscal performances.
Axis's total owned and managed finance receivables stood at $192.1 million, categorized into $104.0 million in auto and $88.1 million in equipment asset management.
The annual revenue was noted at $38.8 million for fiscal 2024, reflecting a 4.3% decline year over year. The write-off of deferred tax balances resulted in a charge of $9.0 million over the entire fiscal year, impacting the bottom line.
Yearly Performance Metrics
During this fiscal year, Axis recorded an adjusted loss of ($20.2) million, markedly greater than the adjusted loss of ($5.2) million noted for fiscal 2023. The net loss for the year was reported at ($23.1) million, down from ($26.2) million in the previous year.
The challenges in the automotive financing market are evident, with the annualized credit loss rates showing an unfortunate increase—from 11.13% in fiscal 2023 to 15.18% in the current fiscal year's measuring period. On the flip side, equipment financing annualized credit loss rates rose to 2.35% from negligible amounts the year prior.
Company Resilience and Future Outlook
Despite the difficulties faced, Axis Auto Finance continues to adapt its business strategies. The company remains committed to providing alternative and reliable vehicle financing solutions to non-prime borrowers across Canada. With more than 30% of Canadians classified as non-prime, Axis plays a crucial role in improving financial accessibility for this demographic.
The overall managed assets have shown a significant reduction of around 42% year over year, with overall owned and managed assets totaling $192.1 million as of June 30, 2024. The strategic decisions made throughout the year will guide the company forward into a more stable financial future.
Frequently Asked Questions
What is Axis Auto Finance?
Axis Auto Finance is a financial technology company focused on providing vehicle financing alternatives specifically for non-prime borrowers in Canada.
What were Axis's total originations in Q4 2024?
Axis reported total originations of $16.2 million in the fourth quarter of 2024, which included both automotive and equipment financings.
How much revenue did Axis report for fiscal year 2024?
The company reported revenues totaling $38.8 million for the fiscal year 2024, indicating a decline from the prior year.
What challenges did Axis face in Q4 of 2024?
Axis faced increased credit loss rates and a notable decline in auto loan originations as tightening credit conditions affected their performance.
How does Axis help improve credit scores?
All auto loans from Axis report to credit bureaus, and over 70% of their clients see improvements in their credit scores as a result.
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