16th Apr 2019 10:35
LONDON (Alliance News) - Microfinance lender ASA International Group PLC on Tuesday reported a rise in annual profit as the company's loan book increased on rising number of clients.
In 2018, ASA International's pretax profit increased 3.0% to USD44.7 million from USD43.4 million in 2017. The company's net interest income jumped 27% to USD109.5 million from USD86.1 million the year before.
ASA's outstanding loan portfolio increased 21% to USD378.5 million from USD313.4 million.
ASA's clients increased 16% to 2.2 million from 1.9 million in 2017. The company's outstanding loans per client increased 3% to USD174, despite "substantial" currency depreciation in Pakistan, India, Sri Lanka and Myanmar.
"We made good progress during the year, with strong operating and underlying financial performance. In particular, we've seen continued strong branch, client and portfolio growth across almost all our markets in 2018. Encouragingly, west and east Africa performed ahead of expectations, in both local currency and dollars. We also maintained a high portfolio quality with PAR>30 at 0.6%, demonstrating the ongoing strength of our responsible ASA business model," said Chief Executive Dirk Brouwer.
The PAR>30 figure is the percentage of loans that have one or more instalments of repayment past due for more than 30 days divided by the total loan portfolio.
The company did book USD8.0 million in expenses from its initial public offering last July, adding to a 48% increase in total operating expenses to USD73.2 million from USD49.5 million. ASA's personnel expenses increased 31% to USD37.1 million.
ASA's dividend per share in 2018 decreased 16% to 7.3 US cents from 8.7 US cents, in line with the company's policy.
Brouwer added: "While many of the Asian currencies impacted in 2018 appear more or less to have stabilised, the effect of the unprecedented level of currency depreciation in 2018 will be felt throughout 2019 as well, particularly because the bulk of the currency depreciation occurred during the second half of 2018."
As a result, ASA expects its 2019 earnings growth will be "materially" below the company's medium term target of 20% to 25% per annum. However, ASA said it is maintaining the medium term target due to its "strong" underlying growth.
Shares in ASA International were down 0.9% Tuesday at 400.00 pence each.
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