The Islamic State (ISIS/ISIL) is plagued by financial troubles, with annual revenue falling by over 50 percent over the last two years, a study finds.

However, “the decline in revenues may not have an immediate effect on the group’s ability to carry out terrorist attacks outside its territory. While hurting Islamic State finances puts pressure on the organization and its state-building project, wider efforts will continue to be necessary to ultimately defeat it,” points out the London-based International Center for the Study of Radicalization (ICSR) and accounting group Ernst & Young in its study.

Moreover, ISIS and its affiliates have expanded to multiple countries where they may find sources of income other than what is available to them in their so-called caliphate in Iraq and Syria.

In opium-rich Afghanistan alone, ISIS may potentially generate enough profits to replenish and surpass its annual revenue by capitalizing on the lucrative production of opium and its heroin derivative in the province of Nangarhar, where the group has established a stronghold.

Some estimates have placed the potential revenue for ISIS from the sale of Afghan opium and heroin at $50 billion annually.

According to the ICSR report, ISIS’s annual income fell by an estimated 55 percent from $1.9 billion at the peak of its power in 2014 to about $870 million in 2016.

The report points out:

The group’s most significant sources of revenue are closely tied to its territory. They are: (1) taxes and fees; (2) oil; and (3) looting, confiscations, and fines. We have found no hard evidence that foreign donations continue to be significant. Similarly, revenues from the sale of antiquities and kidnap for ransom, while difficult to quantify, are unlikely to have been major sources of income.

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There are no signs yet that the group has created significant new funding streams that would make up for recent losses. With current trends continuing, the Islamic State’s “business model” will soon fail.

The study attributes the financial woes facing the jihadist organization, often described as the richest terrorist group in the world, to the jihadists’ over-reliance on population and territory to generate revenue.

“According to figures provided by the Global Coalition, by November 2016 Islamic State had lost 62 per cent of its mid-2014 ‘peak’ territory in Iraq, and 30 per cent in Syria,” notes the report. “From a revenue perspective, this means fewer people and businesses to tax and less control over natural resources such as oil fields.”

“There are good reasons to believe that Islamic State revenues will further decline. In particular, capturing Mosul, the Caliphate’s ‘commercial capital,’ will have a significant detrimental effect on Islamic State finances,” it adds.

Despite the recent losses, the study concedes that ISIS may reverse its misfortune.

The group has expanded well beyond Iraq and Syria. “Since declaring its caliphate in June 2014, the self-proclaimed Islamic State has conducted or inspired more than 140 terrorist attacks in 29 countries other than Iraq and Syria,” reports CNN.

As the ISIS rival Taliban has proven, the production and cultivation of opium and its heroin derivative can produce billions in profits.

There are conflicting reports on whether ISIS would rely on opium for money since the cultivation of the illicit drug is considered haram (forbidden religiously) by Muslims. Islamic State jihadists have admitted to using illicit drugs on the battlefield, however, to keep them alert.

Zamir Kabulov, Russia President Vladimir Putin’s special envoy to Afghanistan, recently explained that the Taliban has argued that they can “send this haram thing to the crusaders and make money out of that for the sake of the Muslim people.”

The U.S. military believes the Taliban generates about 60 percent of its funds from the illicit opium business.

In November 2015, Russia’s Federal Drug Control Service warned that ISIS is planning to flood Europe with heroin and predicted the group could generate $50 billion annually through the sale of the deadly drug.

Such profits would surpass the estimated $1.9 billion ISIS made when it reached the zenith of its power in 2014.

The Taliban and ISIS have been fighting in Afghanistan over territory, influence, and possibly the lucrative opium crop.

There are other sources of revenue in countries where ISIS has established a presence.

One of the reasons for the substantial decline in the ISIS revenue is that the U.S.-led coalition has been aggressively targeting the group’s oil fields, one of the primary sources of income ISIS uses to fund its terrorist activity.

From a more sinister source of revenue — selling Christian and Yazidi girls as young as one year old into sex slavery — ISIS is also making money.