Group financial performance

 

(UNAUDITED)
(IN USD THOUSANDS)

 

H1 2021

 

FY2020

 

H1 2020

 

FY 2019

 

YoY %
Change

 

YTD %
Change

 

YTD % Change
(constant currency)

Profit before tax 7,522 2,578 -2,509 54,336 400% 192% 167%
Net profit(1) 1,442 -1,395 -1,487 34,497 197% 203% 170%
Cost/income ratio 85% 98% 108% 60%      
Return on average assets (TTM)(2) 0.5% -0.2% -0.5% 6.7%       
Return on average equity (TTM)(2) 2.8% -1.3% -2.8% 34.5%      
Earnings growth (TTM)(2) 197% -104% -109% 6%      
OLP(3) 415,009 415,304 388,649 467,429  7% -0.1% 2%
Gross OLP 456,925 445,257 411,697 471,420 11% 3% 5%
Total assets 585,300 579,260 530,984 559,958 10% 1%  
Client deposits(4) 86,922 80,174 74,488  78,080 17%  8%  
Interest-bearing debt(4) 334,565 337,632 301,094 317,810  11% -1%  
Share capital and reserves 105,020 107,073 104,131 111,169 1%  -2%  
Number of clients 2,506,110 2,380,685 2,331,563 2,534,015 7%  5%  
Number of branches 2,036 1,965 1,956 1,895 4%  4%  
Average Gross OLP per client (USD) 182 187 177 186 3% -3% -0.2% 
PAR>30 days(5) 12.3% 13.1% 3.0% 1.5%      
Client deposits as % of loan portfolio 21% 19% 19% 17%      

(1) Net profit was substantially reduced by the provision of deferred taxes for future dividend payments by some of the Company’s operating subsidiaries and the non-deductibility of part of the Group expenses.
(2) TTM refers to trailing twelve months.
(3) Outstanding loan portfolio (‘OLP’) includes off-book Business Correspondence (‘BC’) loans and Direct Assignment loans, excludes interest receivable, unamortized loan processing fees, and deducts modification losses and ECL provisions from Gross OLP.
(4) Excludes interest payable.
(5) PAR>30 is the percentage of on-book OLP that has one or more instalment of repayment of principal past due for more than 30 days and less than 365 days, divided by the Gross OLP.

"While the operational environment remains challenging, we are pleased that in the first half of 2021 we have seen positive developments in terms of portfolio quality, growth and profitability in some of our major operating countries. While the course of the pandemic remains unpredictable as we recently witnessed caused by the Delta variant of Covid-19 in India, Sri Lanka, Myanmar and to a lesser extent the Philippines, we are hopeful that with increased vaccination the operating environment for our clients continues to improve in all our operating markets.”

Dirk Brouwer - CEO, ASA International Group plc

  • The Company’s operational and financial performance substantially improved with pre-tax profit increasing to USD 7.5m in H1 2021 from USD 2.6m in FY 2020.
  • The recovery of our operations was led by strong operational and financial performance in Ghana, Pakistan and Tanzania, which delivered substantial OLP growth, PAR>30 of less than 2%, and substantially increased profitability.
  • Our operations in the Philippines, Nigeria and Kenya also made significant positive contributions to the Group’s net profitability.
  • The challenging circumstances in India caused the Company to make an additional ECL expense of USD 15.3m of (H1 2020: USD 3.8m) and a USD 6.8m ECL expense in all other countries than India (H1 2020: USD 4.5m), which reduced pre-tax profitability accordingly.   
  • Following the end of the recent lockdowns in our operating countries (Sri Lanka, India, the Philippines, Myanmar and Uganda), the Group granted certain clients a temporary moratorium of the payment of one or more loan instalments (which, in effect, extended the related loans for the moratorium period), which peaked at USD 48.3m in June 2021 with 237K clients, mainly in India, benefiting from the moratorium.
  • PAR>30 decreased from 13.1% to 12.3% (after the restructuring of loans outstanding of approx. 30% of clients in India) by the end of June 2021.
  • As of 30 June 2021, the Group had approximately USD 108m of unrestricted cash and cash equivalents, with a funding pipeline reaching approximately USD 163m.
  • The Group successfully raised USD 117m in fresh debt to fund its operations.

The Company expects the operating environment to remain challenging in many countries for the second half of 2021 as vaccination rates have remained relatively low and only recently began to improve in various countries, especially India. Assuming that the disruption caused by Covid-19 reduces during the second-half of the year, the Group’s operating and financial performance is expected to further improve in the second half of 2021 compared with 2020, but with performance largely dependent on developments in India. We expect that in 2022 the Group’s operational and financial performance should further improve, subject to the unpredictable course of the pandemic.

Due to the impact of Covid-19 on the Group’s financial performance H1 2021, and the continued uncertainty, the Company will keep its dividend policy under review until next year.

DIRK BROUWER, CHIEF EXECUTIVE OFFICER OF ASA INTERNATIONAL, COMMENTED:

“While the operational environment remains challenging, we are pleased that in the first half of 2021 we have seen positive developments in terms of portfolio quality, growth and profitability in some of our major operating countries. While the course of the pandemic remains unpredictable as we recently witnessed caused by the Delta variant of Covid-19 in India, Sri Lanka, Myanmar and to a lesser extent the Philippines, we are hopeful that with increased vaccination the operating environment for our clients continues to improve in all our operating markets.

In some of our major markets, such as Ghana, Pakistan and Tanzania we already witnessed strong growth, relatively high profitability combined with a solid portfolio quality. Some of our other established subsidiaries, such as Nigeria and the Philippines, also substantially increased their operational performance and profitability in the first half of 2021. The major challenge we currently face is how to improve the quality of our loan portfolio in India. Our field staff In India, actively supported by our senior management, continue to work very hard to gradually recover these overdue loans. We are grateful for the continued and consistent financial support we received from almost all our lenders in India and are pleased with the resilience shown by our clients who make such efforts to rebuild their businesses and service their loans, and, of course, our staff who leave no stone unturned to encourage our clients to continue servicing their loans.”