International Equities Corporation lifted September-quarter revenue 46.8% to A$753,000, but remained loss-making as apartment disposals and new borrowings supported liquidity. The company ended the quarter with A$1.207 million in cash and reported 5.7 quarters of funding based on cash and unused facilities.
- Revenue rose 46.8% to A$753,000
- After-tax loss widened to A$378,000
- A$464,000 came from apartment disposals
- Operating cash outflow reached A$837,000
- Bank bill facility expires in October 2026
Apartment sales lift revenue, not profitability
International Equities Corporation Ltd (ASX:IEQ) sold more apartments in the September quarter, but the higher revenue did little to repair the bottom line. Revenue rose 46.8% year on year to A$753,000, while the after-tax loss widened to A$378,000 from A$224,000 in the corresponding quarter.
The property segment generated A$490,000 of revenue, including A$464,000 from apartment sales, but recorded an after-tax loss of A$537,000. Management said a slowing economy, higher payroll costs, interest rates and inflation continued to weigh on profitability, while apartment values had weakened after the Federal Budget.
The company said it would continue selling apartment stock to retire loans. That strategy produced a near-term cash inflow, but the quarter’s figures also show the cost of converting property inventory into liquidity: development costs for apartments were reported at A$464,000, matching the apartment-sale revenue in the segment analysis.
Leasing remains the profitable division
Leasing and related sales activities provided the clearer bright spot. The division produced A$262,000 of revenue and an after-tax profit of A$135,000, largely from commissions on long-term leases. IEQ said it would continue listing properties for sale or lease and described the outlook for that activity as stable.
The result arrives shortly after the company’s annual profit and going-concern warning, which reported that continuing operations remained loss-making and operating cash flow was negative. The September quarter offers no sign that the underlying cash-generation problem has yet been resolved.
Borrowings carry the liquidity burden
IEQ reported A$837,000 of net cash used in operating activities, offset by A$464,000 from property disposals and A$1.059 million of net financing inflows. Borrowings raised during the quarter totalled A$1.068 million, while A$9,000 was repaid. The company reported A$1.207 million in cash at quarter end.
It also reported A$3.568 million of unused financing facilities, producing total available funding of A$4.775 million and an estimated 5.70 quarters of funding at the reported operating cash-burn rate. That calculation depends on continued access to the facilities and the company’s own cash-flow estimate; the filing does not provide a refinancing outcome for a secured Bank of Queensland bank bill facility of A$1.663 million that expires in October 2026.
Asset backing edges lower as losses continue
Net tangible asset backing fell to A$0.0370 per security from A$0.0378 a year earlier. The company also disclosed A$3.50 million of zero-rate, unsecured funding from related party Renaissance Assets, with no fixed repayment terms, alongside A$58,000 in trade receivables due from that entity. Payments to related parties and their associates included in operating activities totalled A$100,000.
The immediate question is whether apartment sales can reduce debt faster than losses and interest costs consume cash. The October facility expiry, the pace of inventory disposals and the next quarter’s operating cash flow will give shareholders a sharper test of that balance.
Bottom Line?
IEQ has reported funding runway, but its reliance on apartment disposals and borrowings remains the central issue as a secured facility approaches expiry.
Questions in the middle?
- Will the Bank of Queensland facility be refinanced, renewed or repaid when its October 2026 term ends?
- Can apartment sales reduce borrowings without further weakening net tangible asset backing?
- Will leasing profits be large enough to offset continuing property-segment losses and negative operating cash flow?