14th Oct 2020 15:14
ASA International Group PLC - Weybridge, Surrey-based microfinance lender - Reports swing to net loss for six months ended June 30 of USD1.5 million from a USD16.1 million net profit the year before. Swing results from USD13.3 million modification loss on interest income due to effective extension of the term of its loans to clients in the lockdown as well as a moratorium on payments granted to selective clients immediately after the end of the lockdowns. This means that part of the recognition and payment of interest income scheduled for the first half of the year moves to the second. Additionally, ASA International incurs a USD8.3 million provision for expected credit losses, much more than the USD1.2 million provision the year before.
Collection efficiency keeps increasing in nearly all operating countries in September, liquidity strong with unrestricted cash and cash equivalents at September 30 USD105 million from USD90 million March 30. Plans to reinstate standard dividend policy of 30% group earnings for 2020 after deciding not to declare a dividend in 2019 earnings in light of Covid-19.
"The company is positive about the expected operational and financial performance of the group for the second half of the year. We have seen ongoing improvement of the business environment for our clients, which resulted in increased demand for loans, increased collection rates, reduced demand for moratoriums, and lower loan loss provisions. Unless the disruption to our clients' businesses caused by Covid-19 increases, it is expected that the company's operational and financial performance will gradually normalise to more customary levels in terms of profitability and return on assets/equity during the second half of the year. Subject to Covid-19 related developments and any associated business disruptions, net profits are expected to be approximately USD10 million for the full year 2020," said ASA International.
Current stock price: 223.00; down 9.7% on Wednesday
Year-to-date change: down 16%
By Anna Farley; [email protected]
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