Group financial performance
|
(UNAUDITED) |
H1 2024 |
FY 2023 |
H1 2023 |
FY 2022 |
% Change |
% Change |
% Change |
| Profit before tax(1) | 28,348 | 32,195 | 13,815 | 46,281 | 76% | 94% | 105% |
| Net profit | 13,481 | 8,757 | 3,676 | 17,887 | 208% | 252% | 267% |
| Cost/income ratio | 62% | 72% | 77% | 68% | |||
| Return on average assets (TTM)(2) | 5.5% | 1.8% | 1.5% | 3.4% | |||
| Return on average equity (TTM)(2) | 35.9% | 10.5% | 8.7% | 18.5% | |||
| Earnings growth (TTM)(2) | 267% | -51% | -72% | 181% | |||
| OLP | 384,568 | 369,215 | 334,400 | 351,151 | 4% | 10% | 15% |
| Gross OLP | 394,939 | 377,219 | 346,804 | 367,535 | 5% | 11% | 14% |
| Total assets | 520,060 | 490,027 | 452,332 | 489,752 | 6% | 15% | |
| Client deposits(3) | 75,707 | 79,073 | 72,718 | 84,111 | -4% | 4% | |
| Interest-bearing debt(3) | 286,542 | 268,464 | 245,314 | 257,466 | 7% | 17% | |
| Share capital and reserves | 81,104 | 76,611 | 69,249 | 89,661 | 6% | 17% | |
| Number of clients | 2,375,114 | 2,330,498 | 2,224,542 | 2,299,558 | 2% | 7% | |
| Number of branches | 2,091 | 2,016 | 2,073 | 2,028 | 4% | 1% | |
| Average Gross OLP per client (USD) | 166 | 162 | 156 | 160 | 3% | 9% | 7% |
| PAR>30 days | 2.3% | 2.1% | 3.8% | 5.9% | |||
| Client deposits as % of loan portfolio |
20% | 21% | 22% | 24% | |||
| Debt-to-equity ratio | 3.5 | 3.5% | 3.5% | 2.9% |
(1) Profit before tax and net profit for H1 2024 include an IAS 29 hyperinflation adjustments loss of USD 3.5 million, and profit before tax and net profit for H1 2023 excludes hyperinflation adjustments, as hyperinflation accounting was applied for the first time in the FY 2023 consolidated financial statements. YTD percentage change is based on annualising H1 2024 profit before tax and net profit.
(2) TTM refers to the previous 12 months.
(3) Excludes interest payable.
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“H1 2024 saw both operational growth as well as importantly increased profitability. The overall operating environment across most of our markets improved during the first half of the year. Encouragingly, demand remains high for our products from clients as economic conditions, while still challenging, have eased when compared to the same period in 2023.” Karin Kersten – CEO, ASA International Group Plc
Karin Kersten – CEO, ASA International Group Plc
- ASA International delivered strong operational performance in H1 2024 as the loan book grew following increased demand from clients. OLP increased year-on-year by 15% to USD 384.6m from USD 334.4m. This OLP growth was predominantly driven by improved performance in Pakistan, the Philippines, Ghana, Tanzania, and Kenya. Assets also surpassed the USD 500m mark in H1 for the first time since 2022.
- This operational performance translated into significantly improved profitability in H1 2024 with net profit increasing by 267% to USD 13.5m from USD 3.7m in H1 2023. This was achieved despite the negative impact of USD 3.5m from hyperinflation accounting for Ghana and Sierra Leone. Pakistan, the Philippines, Ghana, Tanzania, and Kenya made a key contribution to the Group’s financial performance due to increased loan demand and high loan portfolio quality in all these markets.
- High portfolio quality was maintained alongside OLP growth. PAR>30 materially improved from 3.8% as at 30 June 2023 to 2.3% as at 30 June 2024, primarily due to write-offs of long overdue loans in India and Myanmar, combined with growth in OLP in US Dollar terms in other major countries. Ghana and Kenya recorded outstanding portfolio quality, with PAR>30 less than 0.5% as at 30 June 2024.
- Total equity increased to USD 81.1m as at 30 June 2024 from USD 69.2m as at 30 June 2023, despite the operating currency devaluation which contributed USD 8.7m in H1 2024 (H1 2023: USD 24.8m) to the foreign currency translation reserve (losses).
- Total funding increased to USD 443.4m as at 30 June 2024 from USD 424.2m at the end of 2023 with a stable sourcing profile. USD 101m of new debt at broadly similar rates was raised in H1 2024 in line with the overall funding strategy.
- The Board continues to monitor the timing of the resumption of the dividend policy. This assessment is being made in line with the existing capital allocation framework and is dependent upon delivery of the expected improved financial performance for the full year.
Building on the sustained momentum seen in H1, the outlook for the remainder of 2024 remains positive with improved business performance expected given continued high demand for loans from clients. Accordingly, the expectation, including the assessed impact of hyperinflation accounting currently applicable for Ghana and Sierra Leone, is that reported net profit for 2024 is to exceed the current company compiled consensus for FY 2024. Company compiled consensus net profit on a reported basis as at the date of this announcement is USD 16.0m.
However, inflation and related foreign exchange movements are expected to continue to affect financial performance in 2024. Hyperinflation accounting, and in particular which countries will be classified as hyperinflationary at year end, will also affect reported net profit this current financial year. Based on the latest preliminary inflation projections as of the date of this announcement, it is expected that the hyperinflation accounting will continue to be applicable for Ghana (current three year cumulative inflation of 114%) and Sierra Leone (126%) in 2024. Pakistan (forecasted three year cumulative inflation at the year end of 81%) and Nigeria (96%) remain on the watchlist.
Karin Kersten, CHIEF EXECUTIVE OFFICER OF ASA INTERNATIONAL, COMMENTED:
“H1 2024 saw both operational growth as well as importantly increased profitability. The overall operating environment across most of our markets improved during the first half of the year. Encouragingly, demand remains high for our products from clients as economic conditions, while still challenging, have eased when compared to the same period in 2023. Clients and staff continue to demonstrate their resilience in these economic circumstances. In particular, we have demonstrated improved performance in our major operating countries - Pakistan, the Philippines, Ghana, Tanzania and Kenya - almost all of which recorded excellent portfolio quality, client and OLP growth, and profitability. The improved performance in our major operating markets was slightly offset by FX movements in certain markets. Currencies in most of our markets have been relatively stable against the USD in H1 2024.
“The team continues to focus on right-sizing average loan sizes to clients in view of the inflationary environment evident in many operating countries, while improving branch productivity as clients continue to demand loans, and staff remain committed and focused on supporting clients in what are still difficult operating circumstances.
“Following the successful migration of more than 600,000 clients in Pakistan to a new Temenos Transact Core Banking System, the team is now diligently working on the next crucial stage of the digital transformation journey. This involves rolling out the Core Banking System in both Ghana and Tanzania.
“We also continue to invest in highly qualified and skilled professionals who can boost growth and support the transition to digital financial services. We were delighted to welcome onboard new local CEOs for Uganda and Rwanda. We will also welcome a new local CEO of Nigeria, who will join in mid-October of this year. Their fresh perspectives alongside their significant professional, banking and leadership experience will be key in delivering growth in these markets and preparing ASA International for the future.
“Away from the clear operational impacts, the effects of inflation, including hyperinflation accounting, other currency movements, are expected to continue to dampen financial performance in USD terms in 2024. However, given the improved operating developments we have already seen in 2024, we are confident of being able to continue our strong performance for the remainder of 2024.
“While focusing on business growth and driving financial performance, we are strongly committed to investing in the social welfare needs of the communities where our clients work and live. In the past six months, we have contributed over USD 150,000, benefiting approximately 50,000 people through nearly 250 initiatives focused on education, healthcare, environmental protection, and disaster relief.
“We also have a deep environmental responsibility, particularly in relation to climate change. Accordingly, we have been delivering against our targets in areas such as increasing renewable energy through solar panel installation, reducing fuel consumption through vehicle electrification, and absorbing CO2 and protecting the environment through tree planting.”