Multi Finance ups bottom line by 120% in 1Q

Tuesday, 23 September 2014 01:16 - - {{hitsCtrl.values.hits}}

Multi Finance PLC recorded a 120% increase in its bottom line in the first quarter ended 30 June 2014 recording a net profit of Rs. 8.6 million, against Rs. 39.2 million loss in the preceding quarter 2013, as per published accounts. During the quarter under review, net income from operations reached Rs. 56.2 million, 236% growth compared to the quarter ended June 2013 which was recorded as Rs. 16.7 million. The net interest income for the quarter ended 06/14 also increased with 215% reaching Rs. 50.5 million, compared to Rs. 16.0 million QonQ owning to improvements in quality lending and strict credit processes introduced. Operating expenses of the company fell to Rs. 32.3 million as against Rs. 40.3 million QonQ which is a 19.8% improvement owing to strict cost control mechanisms adopted.

During the period company’s net impairment has remained in the same range despite the significant increase in its lending portfolio and increase in impairment of pawning which stands at Rs. 16.5 million. Further NPLs on leasing, HP and loans have come down to 4.42% quarter on quarter due to aggressive recovery techniques and strict monitoring process adopted by the company. Earnings per Share of the company have improved from -6.98% to 1.53% within the quarter while improving the company’s quality of the asset portfolio. Return on equity has improved to 2.6% from -12.34% and Return on Assets is up by 121% from -2.84% to 0.60% QonQ in line with the profits. The company’s total assets grew by 3.5% to stand in excess of Rs. 1.38 billion as of 30 June 2014 and the deposit base grew by 9.8% over the same quarter of the previous year displaying the investor confidence placed on the company. Commenting on company’s improvement, Multi Finance Chief Executive Officer Pushpike Jayasundera said the introduction of prudent credit policies, risk management tools and stringent recovery processes were the key factors contributed for this significant results in the quarter. These results were achieved in the midst of interest rate pressures and slowdown in credit growth which was common to the industry during the period concerned. “I am happy to announce that Multi Finance team gave their utmost to achieve this total turn around in the shortest period of time due to clear focus on quality lending and prudent management decisions taken at the right time,” he said. He further said that this achievement is remarkable as it is achieved subsequent to adjustments of losses as per Sri Lanka Accounting Standards and Financial Reporting Standards. The company’s loan portfolio, deposit base and pawning advances showed a steady growth due to introduction of innovative products and aggressively pursued new channels. Further the company is planning to improve its product base through value addition and improved delivery channels in the coming months. “We have provided resilient to external shocks through introduction of effective risk management processes and implementing strict internal controls in our operating processes said Jayasundera. Looking ahead Jayasundera said all plans are set to expedite its growth plans and increase the market share through product diversification whilst maintaining leasing and hire purchase as its core products.