ASA International Group plc -
2024 Interim Results
Sustained improvement in
business and financial performance
ASA International Group plc (LSE:
ASAI), one of the world's largest international microfinance
institutions, is pleased to announce its unaudited interim results
for the six month period ended 30 June 2024.
Key
performance indicators
|
(UNAUDITED)
(USDm unless otherwise stated)
|
H1
24
|
FY
23
|
H1
23
|
FY
22
|
YTD
Change
|
YTD
Change
(CC)
|
YoY
Change
|
|
|
|
|
|
|
|
|
|
|
Number of clients (m)
|
2.4
|
2.3
|
2.2
|
2.3
|
2%
|
|
7%
|
|
Number of branches
|
2,091
|
2,016
|
2,073
|
2,028
|
4%
|
|
1%
|
|
Profit before
tax(1)
|
28.3
|
32.2
|
13.8
|
46.3
|
76%
|
94%
|
105%
|
|
Net profit(1)
|
13.5
|
8.8
|
3.7
|
17.9
|
208%
|
252%
|
267%
|
|
OLP(2)
|
384.6
|
369.2
|
334.4
|
351.2
|
4%
|
10%
|
15%
|
|
Gross OLP(2)
|
394.9
|
377.2
|
346.8
|
367.5
|
5%
|
11%
|
14%
|
|
PAR>30
days(3)
|
2.3%
|
2.1%
|
3.8%
|
5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights
· 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.
Outlook
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."
CHIEF EXECUTIVE OFFICER'S H1 2024 REVIEW
Introduction
An improved operating environment
was evident in most markets, where loan demand increased as clients
experienced an upturn in business activity. While the macroeconomic
backdrop remains challenging, given the global impact of increased
food, commodities, and energy prices, conditions appear to have
eased somewhat. Pakistan, the Philippines, Ghana, Tanzania and Kenya
all made significant contributions to both loan portfolio growth
and crucially profitability during the course of the first
half.
From an operational footprint
standpoint and in line with our strategy, the number of branches
increased to 2,091 as at 30 June 2024 from 2,073 as at 30 June
2023, which reflects the opening of 18 net new branches across the
various operating countries. Client numbers grew by 7% compared to
H1 2023 as demand for loans increased in most markets.
As a result of improved business
trading conditions for clients as well as an expanded operational
footprint, Gross OLP grew to USD 394.9m at the end of June 2024
from USD 346.8m at the end of June 2023. The growth in Gross OLP
was not made at the expense of portfolio quality with this
improving in most markets. PAR>30 stood at 2.3% as of June 2024
compared to 3.8% in June 2023.
ASA International continues to
operates across four main regions comprising 13 countries. South
Asia comprises operations in three countries: Pakistan, India and
Sri Lanka. South East Asia comprises operations in two countries:
The Philippines and Myanmar. West Africa comprises operations in
three countries: Ghana, Nigeria, and Sierra Leone. East Africa
comprises operations in five countries: Tanzania, Kenya, Uganda,
Rwanda and Zambia.
South Asia
South Asia's financial and
operational results improved in H1 2024 compared to H1 2023, with
net profit increasing to USD 1.4m from USD 0.5m. OLP also increased
vs H1 2023 to USD 127.4m from USD 112.1m while at the same time
PAR>30 improved to 3.3% from 7.3%. The improvement was primarily
due to the increased loan demand and high portfolio quality in
Pakistan. There was a decrease in the number of branches, which
reduced by 76 to 585 and the number of clients also decreased by 7k
to 854k. The decreases were primarily due to the intentional
shrinking of the loan portfolio in India over the past 6 months and
focus on recovery of overdue loans while growing the off-book
portfolio.
South East
Asia
South East Asia's net profit
increased to USD 2.3m in H1 2024 from USD 1.7m in H1 2023. The
region's OLP increased in H1 2024 compared to H1 2023 by 10% from
USD 68.1m to USD 74.8m, with the number of branches increasing by
6% from 463 to 489. However, PAR>30 increased from 1.7% to 3.5%.
The improvements in profitability and OLP were driven by continued
growth in loan demand in the Philippines and, notwithstanding the
ongoing internal conflict, an improving operating environment in
Myanmar.
West Africa
West Africa's financial and
operational results improved in H1 2024, compared to H1 2023, with
net profit increasing to USD 6.2m in H1 2024 from USD 4.2m in H1
2023, OLP slightly increasing from USD 60.3m to USD 60.4m, and
PAR>30 significantly improving from 5.2% to 1.9%. Ghana made
significant positive contributions to West Africa's financial and
operational results, despite the application of hyperinflation
accounting which reduced its net profit. In Nigeria and Sierra
Leone, the operating environment improved in H1 2024 with portfolio
quality and profitability improving. However, in particular,
Nigeria was still behind in terms of performance and
growth.
East Africa
East Africa's operational result
improved in H1 2024 compared to H1 2023 with OLP increasing 30%
from USD 93.9m to USD 121.9m, and the number of branches increasing
by 59 to 556. The region's financial result in H1 2024 was higher
than in H1 2023 with net profit increasing by 78% to USD 6.6m from
USD 3.7m. All operating countries in East Africa contributed
positively to the region's operational and financial results, in
particular, Tanzania and Kenya.
Digital strategy and transformation
The digital strategy is focused on
the implementation of a Core Banking System and a digital financial
services platform that meet the requirements for running a modern
micro banking institution. Alongside the digitalisation of the
client journey, the intention is to also further enhance business
administration processes. As announced alongside the FY23 results,
a major milestone was reached in Q1 24 with the migration of more
than 600,000 clients in Pakistan to a new Temenos Transact Core
Banking System. This migration positions ASA Pakistan to be able to
soon commence taking deposits and grow its client base beyond its
core group of customers. In addition, it sets the stage for the
rollout of the new Core Banking System to our other markets and
provides a foundation for a broader, more sophisticated product
offering in the near future.
The rollout of the Core Banking
System combined with the implementation of the digital financial
services app in Ghana and Tanzania (over 500,000 clients combined)
is planned for 2025. The Supplier Market Place app is currently
operating in Ghana, with more than 7,000 customers onboarded and
placing their online orders. The service is expected to be expanded
following the rollout of the digital loan and banking
app.
Competitive environment
The competitive landscape remains
broadly unchanged with the strongest competition being faced in
India, the Philippines, Nigeria, Tanzania, and Uganda. In most
other markets, competition from traditional microfinance
institutions is less intense, in particular, in Myanmar.
Competition from pure digital lenders has not had a direct impact
thus far.
Sustainability
Building on the commitment to social
welfare and recognizing health and education as key drivers of
socioeconomic progress, the Company implements a variety of
programs within local communities. In partnership with reputable
health organizations, nearly 9,000 individuals have been reached
through health camps and medical screenings. The 'ASA Pathsala'
tutoring program in India has supported over 2,000 students, and
approximately USD 60,000 has been invested in educational materials
and necessities for schools. Emergency response efforts, supporting
over 6,000 people, have also been provided. These are just a few
examples of the projects undertaken during the first half of the
year.
As part of a commitment to
environmental protection, annual targets have been set across six
climate-related areas and ASA International is on track to meet
them at the halfway point of the year. Over 150 office solar panels
have been installed, nearly 200,000 clients, colleagues, and
community members have received environmental awareness training,
and close to 20,000 trees have been planted together with
colleagues, clients, and local communities.
Webcast
Management will be hosting a webcast
and conference call, with Q&A, today at 14:00 (UK).
To access the webcast and download
the results presentation, please go to the Investor section of the
website:
Investors | Asa (asa-international.com)
or use the following
link:
ASA International - 2024 Interim Results | SparkLive |
LSEG
The presentation will be available
for downloaded prior to the start of the webcast. In order to ask
questions, analysts and investors are invited to submit questions
via the webcast. The audio webcast will be available for playback
on the Investors section of the website after the event.
2024 Interim Financial Report
Today, ASA International published
its Interim Financial Report for the 6 month period ended 30 June
2024 on
Investors | Asa (asa-international.com).
Preliminary financial calendar
22 October 2024
Q3 2024 business update
21 January 2025
Q4 2024 business update
24 April 2025
FY 2024 results and Q1 2025 business
update
Notes
(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, as hyperinflation accounting was only
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) Outstanding loan portfolio
('OLP') includes off-book Business Correspondence ('BC') loans and
Direct Assignment loans, and loans valued at fair value through
profit and loss ('FVTPL'), excludes interest receivable,
unamortised loan processing fees, and deducts ECL reserves from
Gross OLP.
(3) PAR refers to 'Portfolio at
Risk'. 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.
(4) 'ASA International', the
'Company', the 'Group' all refer to ASA International Group plc and
its subsidiaries.
(5) 'Holdings' or 'Holding
companies' both refer to ASA International Holding and ASA
International NV.
Enquiries
ASA
International Group plc
Investor Relations
Jonathan Berger
ir@asa-international.com
GROUP FINANCIAL
PERFORMANCE
|
(UNAUDITED)
(USD thousands unless otherwise stated)
|
H1
24
|
FY
23
|
H1
23
|
FY
22
|
YTD
Change
|
YTD
Change
(CC)
|
YoY
Change
|
|
|
|
|
|
|
|
|
|
|
Profit before
tax(1)
|
28,348
|
32,195
|
13,815
|
46,281
|
76%
|
94%
|
105%
|
|
Net profit(1)
|
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.
|
Regional
performance
South Asia
|
(UNAUDITED)
(USD thousands unless otherwise stated)
|
H1
24
|
FY
23
|
H1
23
|
FY
22
|
YTD
Change
|
YTD
Change
(CC)
|
YoY
Change
|
|
|
|
|
|
|
|
|
|
|
Profit before tax
|
5,015
|
10,021
|
3,766
|
12,395
|
0.1%
|
0.5%
|
33%
|
|
Net profit
|
1,352
|
3,298
|
487
|
3,103
|
-18%
|
-16%
|
178%
|
|
|
|
|
|
|
|
|
|
|
Cost/income ratio
|
70%
|
68%
|
72%
|
64%
|
|
|
|
|
Return on average assets
(TTM)
|
2.4%
|
2.8%
|
0.7%
|
1.9%
|
|
|
|
|
Return on average equity
(TTM)
|
13.6%
|
11.3%
|
3.4%
|
8.8%
|
|
|
|
|
Earnings growth (TTM)
|
178%
|
6%
|
-90%
|
125%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OLP
|
127,432
|
117,460
|
112,089
|
118,590
|
8%
|
8%
|
14%
|
|
Gross OLP
|
131,701
|
119,730
|
119,869
|
128,460
|
10%
|
10%
|
10%
|
|
Total assets
|
121,086
|
102,803
|
106,979
|
133,894
|
18%
|
|
13%
|
|
Client deposits
|
1,915
|
1,663
|
1,718
|
1,345
|
15%
|
|
11%
|
|
Interest-bearing debt
|
67,601
|
53,569
|
65,357
|
85,878
|
26%
|
|
3%
|
|
Share capital and reserves
|
19,160
|
24,995
|
20,526
|
33,393
|
-23%
|
|
-7%
|
|
|
|
|
|
|
|
|
|
|
Number of clients
|
853,622
|
842,001
|
860,407
|
935,091
|
1%
|
|
-1%
|
|
Number of branches
|
585
|
589
|
661
|
670
|
-1%
|
|
-11%
|
|
Average Gross OLP per client
(USD)
|
154
|
142
|
139
|
137
|
9%
|
8%
|
11%
|
|
|
|
|
|
|
|
|
|
|
PAR > 30 days
|
3.3%
|
1.8%
|
7.3%
|
11.1%
|
|
|
|
|
Client deposits as % of loan
portfolio
|
2%
|
1%
|
2%
|
1%
|
|
|
|
|
Debt-to-equity ratio
|
3.5
|
2.1
|
3.2
|
2.6
|
|
|
|
South Asia's financial and
operational results improved in H1 2024 compared to H1 2023, with
net profit increasing to USD 1.4m by H1 2024 from USD 0.5m in H1
2023, OLP increasing to USD 127.4m from USD 112.1m, and PAR>30
improving to 3.3% from 7.3%, despite the number of branches
decreasing by 76 to 585 and the number of clients decreasing by 7k
to 854k.
Pakistan
ASA Pakistan grew its operations
over the past 6 months:
·
Number of clients increased from 616k to 618k (up
0.5% YTD).
·
Number of branches remained at 345.
·
OLP increased from PKR 19.4bn (USD 69.5m) to PKR
21.0bn (USD 75.5m) (up 8% YTD in PKR).
·
Gross OLP/Client increased from PKR 31.6k (USD
113) to PKR 34.2k (USD 123) (up
8% YTD in PKR).
·
PAR>30 increased from 0.3% to 0.6%.
India
ASA India intentionally shrank its
operations over the past 6 months, as it focused on recovery of
overdue loans while growing the off-book portfolio:
·
Number of clients increased from 183k to 193k (up
5% YTD).
·
Number of branches reduced from 180 to 176 (down
2% YTD).
·
On-book portfolio decreased from INR 0.43bn (USD
5.2m) to INR 0.24bn (USD 2.9m) (down 45% YTD in INR).
·
Off-book portfolio increased from INR 3.2bn (USD
38.3m) to INR 3.7bn (USD 44.8m) (up 17% YTD in INR).
·
Gross OLP/Client increased from INR 20.8k (USD
251) to INR 22.0k (USD 264) (up 6% YTD in INR).
·
PAR>30 increased from 16.4% to 53.0%, and
PAR>30 amount increased from INR 83.4m (USD 1.0m) to INR 173.3m
(USD 2.1m).
·
ASA India's collection efficiency remained stable
at 97% in June 2024. As of 30 June 2024, ASA India had collected
USD 8.4 million from a total of USD 30.5 million in loans
written-off since 2021.
*See
note 13.2 to the
consolidated financial statements 2023 for
details on the off-book portfolio.
Sri Lanka
Lak Jaya saw a deterioration in its
operations over the past 6 months:
·
Number of clients decreased from 43k to 42k (down
3% YTD).
·
Number of branches remained at 64.
·
OLP decreased from LKR 1.43bn (USD 4.4m) to LKR
1.30bn (USD 4.3m) (down 9%
YTD in LKR).
·
Gross OLP/Client increased from LKR 31.5k (USD 97)
to LKR 34.1k (USD 112) (up 8% YTD
in LKR).
·
PAR>30 increased from 5.0% to 5.6%.
South East
Asia
|
(UNAUDITED)
(USD thousands unless otherwise stated)
|
H1
24
|
FY
23
|
H1
23
|
FY
22
|
YTD
Change
|
YTD
Change
(CC)
|
YoY
Change
|
|
|
|
|
|
|
|
|
|
|
Profit before tax
|
3,211
|
4,627
|
2,342
|
4,217
|
39%
|
42%
|
37%
|
|
Net profit
|
2,327
|
3,376
|
1,694
|
1,910
|
38%
|
40%
|
37%
|
|
|
|
|
|
|
|
|
|
|
Cost/income ratio
|
77%
|
84%
|
83%
|
82%
|
|
|
|
|
Return on average assets
(TTM)
|
4.0%
|
3.0%
|
3.1%
|
1.8%
|
|
|
|
|
Return on average equity
(TTM)
|
31.4%
|
23.0%
|
22.5%
|
12.0%
|
|
|
|
|
Earnings growth (TTM)
|
37%
|
77%
|
891%
|
663%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OLP
|
74,758
|
73,979
|
68,073
|
63,316
|
1%
|
10%
|
10%
|
|
Gross OLP
|
77,924
|
76,988
|
70,067
|
66,955
|
1%
|
10%
|
11%
|
|
Total assets
|
122,713
|
119,510
|
111,703
|
102,917
|
3%
|
|
10%
|
|
Client deposits
|
26,616
|
26,146
|
23,871
|
22,069
|
2%
|
|
11%
|
|
Interest-bearing debt
|
69,913
|
69,804
|
66,178
|
58,416
|
0%
|
|
6%
|
|
Share capital and reserves
|
14,960
|
14,341
|
14,666
|
14,980
|
4%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
Number of clients
|
471,074
|
444,210
|
429,533
|
424,076
|
6%
|
|
10%
|
|
Number of branches
|
489
|
458
|
463
|
441
|
7%
|
|
6%
|
|
Average Gross OLP per client
(USD)
|
165
|
173
|
163
|
158
|
-5%
|
4%
|
1%
|
|
|
|
|
|
|
|
|
|
|
PAR > 30 days
|
3.5%
|
2.8%
|
1.7%
|
6.5%
|
|
|
|
|
Client deposits as % of loan
portfolio
|
36%
|
35%
|
35%
|
35%
|
|
|
|
|
Debt-to-equity ratio
|
4.7
|
4.9
|
4.5
|
3.9
|
|
|
|
South East Asia's net profit
increased to USD 2.3m in H1 2024 from USD 1.7m in H1 2023. The
region's OLP increased in H1 2024 compared to H1 2023 by 10% from
USD 68.1m to USD 74.8m, with the number of branches increasing by
6% from 463 to 489 and PAR>30 increasing from 1.7% to
3.5%.
The
Philippines
Pagasa Philippines' operations grew
over the last 6 months:
·
Number of clients increased from 333k to 352k (up
6% YTD).
·
Number of branches increased from
370 to 400 (up 8%
YTD).
·
OLP increased from PHP 3.0bn (USD 54.2m) to PHP
3.3bn (USD 56.0m) (up 9% YTD in PHP).
·
Gross OLP/Client increased from PHP 9.2k (USD 166)
to PHP 9.6k (USD 164) (up 4% YTD in PHP).
·
PAR>30 increased from 3.8% to 4.6%.
Myanmar
ASA Myanmar's operations improved
over the last 6 months:
·
Number of clients increased from 111k to 119k (up
7% YTD).
·
Number of branches increased from 88 to 89 (up 1%
YTD).
·
OLP increased from MMK 41.6bn (USD 19.8m) to MMK
46.7bn (USD 18.8m) (up 12% YTD in
MMK).
·
Gross OLP/Client increased from MMK 409.5k (USD
195) to MMK 422.7k (USD 170) (up 3% YTD in MMK).
·
PAR>30 increased slightly from 0.2% to
0.3%.
West Africa
|
(UNAUDITED)
(USD thousands unless otherwise stated)
|
H1
24
|
FY
23
|
H1
23
|
FY
22
|
YTD
Change
|
YTD
Change
(CC)
|
YoY
Change
|
|
|
|
|
|
|
|
|
|
|
Profit before
tax(1)
|
10,200
|
14,632
|
6,952
|
27,799
|
39%
|
81%
|
47%
|
|
Net profit(1)
|
6,211
|
7,514
|
4,220
|
19,215
|
65%
|
120%
|
47%
|
|
|
|
|
|
|
|
|
|
|
Cost/income ratio
|
35%
|
48%
|
57%
|
43%
|
|
|
|
|
Return on average assets
(TTM)
|
15.1%
|
7.6%
|
8.2%
|
15.8%
|
|
|
|
|
Return on average equity
(TTM)
|
32.3%
|
15.6%
|
16.0%
|
33.2%
|
|
|
|
|
Earnings growth (TTM)
|
47%
|
-61%
|
-60%
|
-23%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OLP
|
60,432
|
72,260
|
60,349
|
82,380
|
-16%
|
9%
|
0.1%
|
|
Gross OLP
|
61,992
|
74,501
|
62,914
|
84,853
|
-17%
|
9%
|
-1%
|
|
Total assets
|
78,354
|
89,494
|
85,774
|
108,395
|
-12%
|
|
-9%
|
|
Client deposits
|
30,119
|
35,642
|
30,798
|
39,544
|
-15%
|
|
-2%
|
|
Interest-bearing debt
|
3,502
|
3,752
|
4,028
|
4,326
|
-7%
|
|
-13%
|
|
Share capital and reserves
|
34,428
|
41,912
|
42,551
|
54,591
|
-18%
|
|
-19%
|
|
|
|
|
|
|
|
|
|
|
Number of clients
|
375,918
|
425,058
|
379,467
|
433,897
|
-12%
|
|
-1%
|
|
Number of branches
|
461
|
452
|
452
|
446
|
2%
|
|
2%
|
|
Average Gross OLP per client
(USD)
|
165
|
175
|
166
|
196
|
-6%
|
24%
|
-1%
|
|
|
|
|
|
|
|
|
|
|
PAR > 30 days
|
1.9%
|
3.3%
|
5.2%
|
4.2%
|
|
|
|
|
Client deposits as % of loan
portfolio
|
50%
|
49%
|
51%
|
48%
|
|
|
|
|
Debt-to-equity ratio
|
0.1
|
0.1
|
0.1
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
West Africa's financial and
operational results improved in H1 2024, compared to H1 2023, with
net profit improving to USD 6.2m in H1 2024 from USD 4.2m in H1
2023, OLP slightly improving from USD 60.3m to USD 60.4m, and
PAR>30 improving from 5.2% to 1.9%.
Ghana
ASA Savings & Loans operations
continued to improve with excellent portfolio quality:
·
Number of clients decreased from 201k to 192k
(down 5% YTD).
·
Number of branches increased from 143 to 150 (up
5% YTD).
·
OLP increased from GHS 620.9m (USD 51.9m) to GHS
725.6m (USD 47.5m) (up 17%
YTD in GHS).
·
Gross OLP/Client increased from GHS 3.1k (USD 259)
to GHS 3.8k (USD 248) (up 22% YTD in GHS).
·
PAR>30 slightly increased from 0.1% to
0.2%.
Nigeria
ASA Nigeria saw a mixed operational
performance:
·
Number of clients reduced from 184k to 146k (down
21% YTD).
·
Number of branches maintained at 263.
·
OLP reduced from NGN 14.2bn (USD 15.8m) to NGN
11.8bn (USD 7.7m) (down 16% YTD in NGN).
·
Gross OLP/Client increased from NGN 85.7k (USD 96)
to NGN 93.4k (USD 61) (up 9% YTD in NGN).
·
PAR>30 improved from 12.1% to 9.0%.
Sierra
Leone
ASA Sierra Leone saw a mixed
operational performance:
·
Number of clients decreased from 39k to 37k (down
5% YTD).
·
Number of branches increased from 46 to 48 (up 4%
YTD).
·
OLP increased from SLE 104.3m (USD 4.6m) to SLE
116.2m (USD 5.2m) (up 11% YTD in
SLE).
·
Gross OLP/Client increased from SLE 2.8m (USD 122)
to SLE 3.2m (USD 144) (up 15% YTD in SLE).
·
PAR>30 increased from 4.6% to 5.7%.
East Africa
|
(UNAUDITED)
(USD thousands unless otherwise stated)
|
H1
24
|
FY
23
|
H1
23
|
FY
22
|
YTD
Change
|
YTD
Change
(CC)
|
YoY Change
|
|
|
|
|
|
|
|
|
|
|
Profit before tax
|
10,849
|
11,859
|
5,993
|
11,241
|
83%
|
79%
|
81%
|
|
Net profit
|
6,620
|
6,781
|
3,717
|
6,913
|
95%
|
90%
|
78%
|
|
|
|
|
|
|
|
|
|
|
Cost/income ratio
|
57%
|
69%
|
69%
|
68%
|
|
|
|
|
Return on average assets
(TTM)
|
9.5%
|
5.3%
|
6.8%
|
7.0%
|
|
|
|
|
Return on average equity
(TTM)
|
44.3%
|
24.7%
|
30.4%
|
29.8%
|
|
|
|
|
Earnings growth (TTM)
|
78%
|
-2%
|
14%
|
49%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OLP
|
121,946
|
105,516
|
93,889
|
86,865
|
16%
|
13%
|
30%
|
|
Gross OLP
|
123,322
|
106,000
|
93,955
|
87,267
|
16%
|
14%
|
31%
|
|
Total assets
|
162,860
|
139,762
|
116,542
|
113,791
|
17%
|
|
40%
|
|
Client deposits
|
17,058
|
15,622
|
16,332
|
21,153
|
9%
|
|
4%
|
|
Interest-bearing debt
|
97,315
|
86,014
|
62,115
|
59,871
|
13%
|
|
57%
|
|
Share capital and reserves
|
32,863
|
28,360
|
26,878
|
26,445
|
16%
|
|
22%
|
|
|
|
|
|
|
|
|
|
|
Number of clients
|
674,500
|
619,229
|
555,135
|
506,494
|
9%
|
|
22%
|
|
Number of branches
|
556
|
517
|
497
|
471
|
8%
|
|
12%
|
|
Average Gross OLP per client
(USD)
|
183
|
171
|
169
|
172
|
7%
|
4%
|
8%
|
|
|
|
|
|
|
|
|
|
|
PAR > 30 days
|
1.2%
|
1.1%
|
1.1%
|
0.9%
|
|
|
|
|
Client deposits as % of loan
portfolio
|
14%
|
15%
|
17%
|
24%
|
|
|
|
|
Debt-to-equity ratio
|
3.0
|
3.0
|
2.3
|
2.3
|
|
|
|
East Africa's operational result
improved in H1 2024 compared to H1 2023 with OLP increasing 30%
from USD 93.9m to USD 121.9m, and the number of branches increasing
by 59 to 556. The region's financial result in H1 2024 was higher
than in H1 2023 with net profit increasing by 78%.
Tanzania
ASA Tanzania expanded its operations
over the last 6 months:
·
Number of clients increased from 248k to 258k (up
4% YTD).
·
Number of branches increased from 202 to 211 (up
4% YTD).
·
OLP increased from TZS 162.5bn (USD 64.7m) to TZS
178.5bn (USD 67.8m) (up 10% YTD in TZS).
·
Gross OLP/Client increased from TZS 660.4k (USD
263) to TZS 698.5k (USD 265) (up 6% YTD in TZS).
·
PAR>30 increased from 0.9% to 1.3%.
Kenya
ASA Kenya expanded its operations
over the 6-month period:
·
Number of clients increased from 205k to 238k (up
16% YTD).
·
Number of branches increased from 132 to 145 (up
10% YTD).
·
OLP increased from KES 3.3bn (USD 20.9m) to KES
4.2bn (USD 32.2m) (up 27% YTD in KES).
·
Gross OLP/Client increased from KES 15.9k (USD
101) to KES 17.7k (USD 137) (up 11% YTD in KES).
·
PAR>30 improved from 0.3% to 0.2%.
Uganda
ASA Uganda saw an improvement in
operations over the last 6 months:
·
Number of clients increased from 121k to 131k (up
9% YTD).
·
Number of branches increased from 120 to 125 (up
4% YTD).
·
OLP increased from UGX 49.3bn (USD 13.0m) to UGX
53.5bn (USD 14.4m) (up 9% YTD in UGX).
·
Gross OLP/Client increased from UGX 405.5k (USD
107) to UGX 414.5k (USD 112) (up 2% YTD in UGX).
·
PAR>30 improved from 0.8% to 0.5%.
Rwanda
ASA Rwanda saw a modest improvement
in operations over the last 6 months:
·
Number of clients increased from 20.8k to 21.0k
(up 1% YTD).
·
Number of branches increased from 32 to 37 (up 16%
YTD).
·
OLP increased from RWF 5.1bn (USD 4.0m) to RWF
5.5bn (USD 4.2m) (up 8% YTD in RWF).
·
Gross OLP/Client increased from RWF 253.0k (USD
201) to RWF 274.4k (USD 209) (up 8% YTD in RWF).
·
PAR>30 remained stable at 6.9%.
Zambia
ASA Zambia expanded its
operations:
·
Number of clients increased from 25k to 27k (up 8%
YTD).
·
Number of branches increased from 31 to 38 (up 23%
YTD).
·
OLP increased from ZMW 73.8m (USD 2.9m) to ZMW
79.1m (USD 3.3m) (up 7% YTD in ZMW).
·
Gross OLP/Client decreased from ZMW 3.1k (USD 119)
to ZMW 3.0k (USD 127) (down 1% YTD in ZMW).
·
PAR>30 increased from 2.6% to 3.2%.
Regulatory update
Pakistan
·
Since 2022, a total dividend of c. PKR 4bn (c. USD
14m) has been declared out of which c. PKR 500m (c. USD 2m) has
been paid and the balance will be paid upon regulatory
clearance.
India
·
Reserve Bank of India indicated by
letter in June 2024 that certain interest rates
being charged to clients by ASAI India are deemed usurious.
Accordingly, it was agreed to decrease the
interest rate range.
·
Reserve Bank of India (RBI) issued a letter dated
17 September 2024 concerning non-maintenance of certain regulatory
thresholds. The Company is currently in discussions with the RBI to
address these issues. These discussions are in an early stage and
it is too early to make an assessment of the economic
outflows.
Ghana
·
The Bank of Ghana has approved the implementation
of the new core banking software - 'Temenos T24'. This approval is
conditional and ASA Ghana is currently working to meet these
requirements.
·
The interim dividend declared on 2023 results was
approved by the Bank of Ghana in H1 2024 and was fully
paid.
Kenya
·
Application for Digital Credit Providers ('DCP')
licence from Central Bank of Kenya
submitted in October 2023 still pending due to
high number of applications (500+).
Tanzania
·
The Company is still working on acquiring a
microfinance bank license in Tanzania.
Regulatory capital
12 operating subsidiaries are
regulated and subject to minimum regulatory capital requirements.
As of 30 June 2024, there was full compliance with all relevant
minimum regulatory capital requirements.
Funding
Total funding increased to USD
443.4m as at 30 June 2024 from USD 424.2m at the end of 2023.
Notwithstanding this movement, the funding profile has not
materially changed during H1 2024.
|
(UNAUDITED)
(USDm)
|
30 Jun 24
|
31 Dec 23
|
30 Jun 23
|
31 Dec 22
|
|
Local Deposits
|
75.7
|
79.1
|
72.7
|
84.1
|
|
Loans from Financial
Institutions
|
236.0
|
214.7
|
204.9
|
216.6
|
|
Microfinance Loan Funds
|
21.8
|
28.2
|
22.9
|
21.5
|
|
Loans from Dev. Banks and
Foundations
|
28.8
|
25.6
|
17.5
|
19.4
|
|
Equity
|
81.1
|
76.6
|
69.2
|
89.7
|
|
Total Funding
|
443.4
|
424.2
|
387.2
|
431.3
|
A favourable maturity profile has
been maintained with the average tenor of all funding from third
parties being substantially longer than the average tenor at
issuance of customer loans which ranges from six to twelve months
for the majority of the loans. Local deposits appeared to have
declined YTD in USD terms. This reduction was primarily due to
significant currency depreciation in Ghana and Nigeria, which have
the bulk of deposits across the Group.
The cost of funding remained broadly
stable at 11.3% on average across H1 2024. Funding costs across the
Group stabilised in H1 2024 compared to 2023 as benchmark rate
increases in some markets were tempered by improved pricing on
funding from local sources.
The Group closed a loan facility to
the Holdings of USD 15m with the OeEB (Austrian development bank)
on 18 July 2024 as well USD 10m with Oikocredit on 3 September
2024. There is also a strong funding pipeline of USD 174m in place
for fresh loans, with over 93% having agreed terms and can be
accessed in the short to medium term. There are existing credit
relationships with more than 60 lenders across the world, which has
provided reliable access to competitively priced funding for the
growth of the loan portfolio.
The Group has USD 95.3m (31 December
2023: USD 76.4m) of cash at bank and in hand as at 30 June 2024 of
which USD 28.9m (31 December 2023: USD 27.9m) is restricted and
cannot be readily available. The remaining USD 66.4m (31 December
2023: USD 48.5m) is unrestricted and utilised for operational needs
in line with the capital allocation framework.
Net debt at the holding companies
level reduced to USD 60m as at 30 June 2024 from USD 61m as at 31
December 2023 (30 June 2023: USD 69m). The strategy of reducing the
proportion of debt funding sourced at the holding companies over
time is maintained.
Since 2021, a number of loan
covenants were breached across the Group, particularly related to
the portfolio quality in India. As of 30 June 2024, the balance for
credit lines with breached covenants amounts to USD 37.4 million
and the group has received waivers for USD 12.2 million. The group
is still under discussion to receive waivers for USD 25.2
million.
The Group has also received
temporary waivers, no-action and/or comfort letters from some of
its major lenders for expected covenant breaches. However, these
waivers are not for the full going concern assessment period up to
October 2025. The impact of these potential covenant breaches,
particularly in India, was further assessed in the evaluation of
the Group's going concern as disclosed in note 2.1.2 of the Interim
Financial Report. However, the current economic and market
conditions make it difficult to assess the likelihood of further
debt covenant breaches and whether the waivers necessary to avoid
the immediate repayment of debt or further extension of loan terms
will be forthcoming. As a result, senior management and the
Directors have concluded that this represents a material
uncertainty that may cast significant doubt over the Group's
ability to continue as a going concern. Nevertheless, given the
historical and continuing support received from lenders evidenced
by the last four years where the Group has been continuously able
to raise new funds and receive waivers for such covenant breaches,
and based on continued improved operating performance in most
markets, the Group has a reasonable expectation that it will have
adequate resources to continue in operational existence throughout
the going concern assessment period.
Expected credit losses
The Company increased its reserves
in the balance sheet for expected credit losses (ECL) from USD 8.3m
as at end of 2023 to USD 10.1m as at end of June 2024, for its OLP,
including the off-book BC portfolio (in India) and interest
receivables. The increase was preliminary due to the growth of
OLP.
USD 10.1m ECL reserves as at 30 June
2024 mainly relate to overdue loans in India (34%), the Philippines
(16%) and Myanmar (14%), with the remainder spread across the other
countries. Further details on the ECL calculation, including the
selected assumptions, are provided in note 2.3.1 to the Interim
Financial Report.
Impact of foreign exchange rates
As a US Dollar reporting company
with operations in thirteen different currencies, currency
movements can have a major effect on the USD financial performance
and reporting.
The effect of this is that generally
(i) existing and future local currency earnings translate into
fewer US Dollar earnings, and (ii) local currency capital of any of
the operating subsidiaries will translate into a lower US Dollar
capital.
|
Countries
|
30
Jun 24
|
31
Dec 23
|
30
Jun 23
|
31
Dec 22
|
|
Δ 30 Jun 2023
- 30 Jun 2024
|
Δ 31 Dec 2023
- 30 Jun 2024
|
|
Pakistan (PKR)
|
278.3
|
279.7
|
287.1
|
226.4
|
|
3%
|
0.5%
|
|
India (INR)
|
83.4
|
83.2
|
82.1
|
82.7
|
|
(2%)
|
(0.2%)
|
|
Sri Lanka (LKR)
|
306.0
|
323.9
|
308.2
|
366.3
|
|
1%
|
6%
|
|
The Philippines (PHP)
|
58.4
|
55.4
|
55.3
|
55.7
|
|
(6%)
|
(5%)
|
|
Myanmar (MMK)
|
2,488.7
|
2,101.2
|
2,102.2
|
2,100.0
|
|
(18%)
|
(18%)
|
|
Ghana (GHS)
|
15.3
|
12.0
|
11.4
|
10.2
|
|
(33%)
|
(28%)
|
|
Nigeria (NGN)
|
1,535.4
|
896.6
|
761.1
|
448.1
|
|
(102%)
|
(71%)
|
|
Sierra Leone (SLE)
|
22.5
|
22.9
|
18.9
|
18.9
|
|
(19%)
|
2%
|
|
Tanzania (TZS)
|
2,631.3
|
2,512.4
|
2,416.1
|
2,332.5
|
|
(9%)
|
(5%)
|
|
Kenya (KES)
|
129.3
|
157.0
|
140.4
|
123.5
|
|
8%
|
18%
|
|
Uganda (UGX)
|
3,710.0
|
3,780.2
|
3,673.8
|
3,717.6
|
|
(1%)
|
2%
|
|
Rwanda (RWF)
|
1,315.7
|
1,259.5
|
1,172.0
|
1,067.0
|
|
(12%)
|
(4%)
|
|
Zambia (ZMW)
|
24.0
|
25.8
|
17.6
|
18.1
|
|
(37%)
|
7%
|
During H1 2024, the local currencies
NGN (-71%), GHS (-28%), and PHP (-5%) particularly depreciated
against the USD. This had an additional negative impact on the USD
earnings contribution of these subsidiaries and also contributed to
an increase in the foreign currency translation reserve. The total
contribution to the foreign currency translation reserve during H1
2024 amounted to USD 8.7m (H1 2023: USD 24.8m) of which USD 5.8m
related to the depreciation of the NGN, USD 3.3m related to the
depreciation of the GHS, and USD 0.7m related to the depreciation
of the PHP.
Accounting for hyperinflation
The IFRS standard IAS 29 "Financial
Reporting in Hyperinflationary Economies" ('IAS 29') requires the
Group to adjust the H1 2024 financial information of operating
entities, which expect to be in hyperinflationary economies with
the main indicator being three-year cumulative inflation exceeding
100% in the period 2022-2024. All items are presented to reflect
the current purchasing power at the reporting date. By the end of
2024, the three-year cumulative inflation in Ghana and Sierra Leone
is still expected to exceed 100%.
Based on this, hyperinflation
accounting is applied in the Interim Financial Report of the Group.
The application of IAS 29 results in non-cash adjustments in the
presentation of the financial information of the Group. Net profit
decreased by USD 3.5m, however, total comprehensive income and
total equity increased by USD 0.3m after the IAS 29 adjustments.
Further details are provided in note 2.3.4 to the Interim Financial
Report.
Based on current preliminary
inflation projections, it is expected that the accounting for
hyperinflation will be applicable for Ghana and Sierra Leone
in 2024. Pakistan
and Nigeria remain on the watchlist.
Effective tax rate
The Group did not recognise deferred
tax assets amounting to USD 2.6m, which related to a) losses for
India and the holding companies in H1 2024 which do not meet the
future profitability threshold under IFRS and b) temporary
differences for loan loss provision and depreciation mainly in
India, Sri Lanka and Myanmar. The Group will be able to recognise
these deferred tax assets provided these entities turn profitable
again. Additionally, the loss from hyperinflation accounting in the
P&L is disallowed for tax purposes thereby increasing the
effective tax rate further. Further details are provided in note
10.4 to the Interim Financial Report.
Forward-looking statement and disclaimers
This announcement does not
constitute or form part of any offer or invitation to purchase,
otherwise acquire, issue, subscribe for, sell or otherwise dispose
of any securities, nor any solicitation of any offer to purchase,
otherwise acquire, issue, subscribe for, sell, or otherwise dispose
of any securities. The release, publication or distribution of this
announcement in certain jurisdictions may be restricted by law and
therefore persons in such jurisdictions into which this
announcement is released, published or distributed should inform
themselves about and observe such restriction.
The information contained within
this announcement is deemed by the Company to constitute inside
information as stipulated by the Market Abuse Regulation (EU)
No.596/2014, as it forms part of UK law by virtue of the European
Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
The person responsible for the
release of this announcement on behalf of the Company for the
purposes of MAR is Tanwir Rahman, Chief Financial
Officer.