TIDMASAI
RNS Number : 6309C
ASA International Group PLC
24 February 2022
ASA International Group plc announces 2021 Year End Trading
Update
Amsterdam, 24 February 2022 - ASA International Group plc, ('ASA
International', the 'Company' or the 'Group'), one of the world's
largest international microfinance institutions, today releases a
trading update for the year ended 31 December 2021.
Key highlights:
% Change
FY 2020
FY 2021 FY 2020 FY 2019 % Change - FY 2021
FY
2020
- FY (constant
(UNAUDITED) (AUDITED) (AUDITED) 2021 currency)
Number of clients (m) 2.4 2.4 2.5 0%
Number of branches 2,044 1,965 1,895 4%
OLP (1) (USD m) 401.8 415.3 467.4 -3% 3%
Gross OLP (USD m) 429.2 445.3 471.4 -4% 2%
Average Gross OLP per
client (USD) 180 187 186 -4% 2%
PAR > 30 days (2) 5.2% 13.1% 1.5%
(1) 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.
(2) 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.
-- Group operating results have significantly improved compared
with 2020 despite the challenging operating environment, especially
in India and Myanmar.
-- The Group's operating subsidiaries, excluding India,
collectively have been able to reduce PAR>30 to 1.7% during the
year. Ghana, Pakistan and Tanzania led the recovery with
substantial OLP growth and high portfolio quality, with PAR>30
less than 0.5%.
-- Given the challenging environment in India, disbursements of
new loans declined with the focus on recovery of loans. Reduced
loan disbursements and significant write-offs led to OLP decreasing
by 36%. With moratoriums being offered to clients and significant
write-offs, PAR>30 improved to 19.5%.
-- Due to the combination of significant write-offs and reduced
loan disbursements with the focus more on recovery of overdue than
loan disbursement, OLP for the Group decreased by 3% to USD 402m
and Gross OLP reduced by 4% to USD 429m.
-- Modification losses on interest income and receivables
amounted to approximately USD 1.2m, slightly less than the USD 1.5m
as at 30 June 2021. As no new moratoriums were granted to clients
in 2022, except for India, where 38% of loans are restructured
until June 2022, modification losses are expected to reverse,
assuming no further long lockdowns or moratoriums are imposed or
granted.
-- Unrestricted cash and cash equivalents remained high at
approximately USD 91m with the majority of the Company's USD 187m
pipeline of future wholesale loans supported by (agreed) term
sheets and/or draft loan documentation.
-- The Company expects a substantial improvement compared to
2020 in pre-tax profit and net profit. Net profit will be impacted
by the introduction of a provision of deferred taxes for future
dividend payments by the Company's operating subsidiaries.
Dirk Brouwer, Chief Executive Officer of ASA International Group
plc, commented:
" W e are pleased that all but two of our major operating
subsidiaries recovered to near pre-covid operating performance in
2021. Despite the ongoing challenges we face in India and Myanmar,
the performance of most of our other operating countries,
including, particularly, Ghana, Pakistan and Tanzania, was
excellent in terms of portfolio quality, growth and profitability.
Most of our clients in these countries faced significantly less
disruption to their businesses compared to 2020. ASA Nigeria and
Pagasa Philippines also substantially improved their operating
performance in 2021.
As a result of the improved operating performance in 2021 and
despite estimated additional ECL expenses of USD 38m primarily due
to the ongoing challenges we face in India, we now expect pre-tax
income and net income of the Group for 2021 to be substantially
better than what was achieved in 2020.
While the impact of the pandemic remains unpredictable on our
operating subsidiaries, we expect that the operating environment
for our clients continues to improve in most of our operating
markets. The operating environment in Myanmar remains challenging
not only due to Covid, but also because of the military takeover,
which has had a major negative effect on Myanmar's economy. Our
strategy in India continues to be to shrink the OLP and focus
rigorously on the recovery of overdue loans, while strictly
controlling costs.
As most of the Group's operating subsidiaries have returned to
growth and increased profitability, and subject to the performance
in India, we are confident that operational and financial
performance will continue to strengthen in 2022."
Regional performance:
South Asia
% Change
FY 2020
FY 2021 FY 2020 FY 2019 % Change - FY 2021
FY
2020
- FY (constant
(UNAUDITED) (AUDITED) (AUDITED) 2021 currency)
Number of clients (m) 1.1 1.2 1.2 -7%
Number of branches 778 758 751 3%
OLP (USD m) 180.2 217.8 254.4 -17% -12%
Gross OLP (USD m) 200.1 238.7 256.6 -16% -11%
Average Gross OLP per
client (USD) 181 201 208 -10% -5%
PAR > 30 days 9.6% 21.3% 2.0%
-- ASA Pakistan continued to grow its business with the number
of clients up 23% from 416k to 512k, and number of branches up by
33 to 325. OLP increased from USD 62.5m to USD 77.7m. Gross
OLP/Client decreased from USD 155 to USD 154, down by 1% (up 10% on
a constant currency basis). PAR>30 improved from 4.0% as at
year-end 2020 to 0.2% year-end 2021.
-- ASA Pakistan continues to await final approval from the State
Bank of Pakistan for a microfinance banking license having met all
outstanding requirements.
-- ASA India continued to shrink its OLP as it focused on
recovery of overdue loans as clients are trying to recover from the
disruptions caused by the impact of the disruption caused by
Covid-19 in 2020 and 2021. With moratoriums being offered to
clients, PAR>30 improved from 31.9% at year-end 2020 to 19.5% by
year-end 2021 in India.
-- ASA India's number of clients was down 24% from 714k in 2020
to 541k and number of branches down by 13 to 387 by year-end 2021,
with its portfolio (own and BC) decreasing from USD 146.9m year-end
2020 to USD 94.8m by year-end 2021. BC portfolio in India decreased
from USD 46.4m to USD 33.8m, down 27% (down 26% on constant
currency basis).
-- Lak Jaya, the Group's operating subsidiary in Sri Lanka, has
seen its number of clients go down by 5% from 56k to 53k with its
number of branches remained at 66. OLP decreased from USD 8.4m to
USD 7.7m. Gross OLP/Client decreased from USD 163 to USD 158.
PAR>30 improved to 6.0% at the end of 2021 from 7.6% in
2020.
South East Asia
% Change
FY 2020
FY 2021 FY 2020 FY 2019 % Change - FY 2021
FY
2020
- FY (constant
(UNAUDITED) (AUDITED) (AUDITED) 2021 currency)
Number of clients
(m) 0.4 0.4 0.5 -7%
Number of branches 420 415 405 1%
OLP (USD m) 62.7 74.2 84.2 -16% -4%
Gross OLP (USD m) 66.8 80.8 84.9 -17% -5%
Average Gross OLP
per client (USD) 167 189 173 -11% 1%
PAR > 30 days 2.1% 4.1% 1.0%
-- Pagasa Philippines' number of clients was down 4% from 299k
in 2020 to 289k by year-end 2021 and number of branches up by 2 to
324 with its loan portfolio decreasing from USD 45.3m year-end 2020
to USD 44.6m year-end 2021. PAR>30 improved from 6.4% to
2.5%.
-- ASA Myanmar struggled to increase collection efficiency to
satisfactory levels following the military's takeover of the
Government leading to nation-wide protests and lockdowns imposed by
the government due to Covid-19. The number of clients in Myanmar
was down 14% from 129k to 111k and number of branches up by 3 to 96
by year-end 2021 with its loan portfolio decreasing from USD 28.9m
to USD 18.1m and PAR>30 increased from 0.5% to 1.1%.
West Africa
% Change
FY 2020
FY 2021 FY 2020 FY 2019 % Change - FY 2021
FY
2020
- FY (constant
(UNAUDITED) (AUDITED) (AUDITED) 2021 currency)
Number of clients
(m) 0.5 0.4 0.5 2%
Number of branches 440 433 423 2%
OLP (USD m) 94.2 77.8 77.2 21% 29%
Gross OLP (USD m) 95.9 79.5 78.1 21% 28%
Average Gross OLP
per client (USD) 210 178 170 18% 25%
PAR > 30 days 2.6% 2.7% 1.5%
-- ASA Savings & Loans, the Groups operating subsidiary in
Ghana, had an excellent year with operating performance exceeding
pre-Covid levels.
-- Client numbers were up from 158.0k to 158.4k serviced from
133 branches, up 4. OLP increased from USD 42.3m to USD 48.9m, and
Gross OLP/Client increasing from USD 269 to USD 310, up 15%.
PAR>30 improved from 0.4% to 0.3%.
-- ASA Nigeria performed well with client numbers up from 252.7k
to 253.6k serviced from 263 branches, and OLP up from USD 31.2m to
USD 38.5m. Gross OLP/Client was up from USD 129 to USD 157.
PAR>30 improved from 5.5% to 4.6%.
-- ASA Sierra Leone increased its number of clients from 36.4k
to 45.3k, serviced from 44 branches, up 3. OLP increased from USD
4.3m to USD 6.7m and Gross OLP/Client increased from USD 123 to USD
154. PAR>30 increased from 4.4% to 7.5%.
East Africa
% Change
FY 2020
FY 2021 FY 2020 FY 2019 % Change - FY 2021
FY
2020
- FY (constant
(UNAUDITED) (AUDITED) (AUDITED) 2021 currency)
Number of clients
(m) 0.4 0.3 0.3 31%
Number of branches 406 359 316 13%
OLP (USD m) 64.7 45.4 51.7 43% 42%
Gross OLP (USD m) 66.5 46.2 51.9 44% 44%
Average Gross OLP
per client (USD) 159 145 149 10% 10%
PAR > 30 days 1.3% 13.2% 0.6%
-- ASA Kenya expanded its operations as number of clients
increased from 92k to 119k serviced from 112 branches, up 12. OLP
increased from USD 12.7m to USD 16.1m and Gross OLP/Client
decreased from USD 142 to USD 140. PAR>30 improved materially
from 21.9% to 1.1%.
-- ASA Tanzania's significantly expanded its operation as number
of clients went up from 121k to 174k serviced from 143 branches, up
22. OLP increased from USD 21.4m to USD 34.3m and Gross OLP/Client
increased from USD 178 to USD 200. PAR>30 improved from 2.5% to
0.5%.
-- ASA Uganda's number of clients went up from 81k to 92k
serviced from 103 branches, up 5. OLP increased from USD 8.0m to
USD 9.0m and Gross OLP per client increased from USD 100 to USD
107. PAR>30 significantly improved from 29.1% at year-end 2020
to 3.8% in 2021 .
-- ASA Rwanda's number of clients went down from 19k to 18k
serviced from 30 branches. OLP increased from USD 2.9m to USD 3.3m
and Gross OLP/Client increased from USD 153 to USD 187. PAR>30
improved from 10.1% to 4.5%.
-- ASA Zambia increased its number of clients from 5k to 15k
serviced from 18 branches, up 8. OLP increased from USD 372k to USD
2m and Gross OLP/Client increased from USD 76 to USD 141. PAR>30
improved from 5.8% in 2020 to 0.7% in 2021.
Impact of foreign exchange rates
During FY 2021, currency movements of operating currencies in
Asia and Africa mostly depreciated against the US dollar. The US
dollar strengthened more than expected against currencies in
Pakistan, the Philippines, Sri Lanka and Myanmar in Asia, and
Ghana, Nigeria, and Sierra Leone in Africa, which reduced the
reported OLP and Gross OLP/client figures in USD. Overall, the
currency movements resulted in an increase of the FX translation
reserve losses by approximately USD 10.9m.
Funding
Unrestricted cash and cash equivalents remained high at
approximately USD 91m as at 31 December 2021. The Group managed to
raise approximately USD 191m in new debt funding in 2021. At end of
2021, the Company had a funding pipeline of USD 187m future
wholesale loans, majority of which are supported by (agreed) term
sheets and/or draft loan documentation.
The Group has managed to secure waivers and/or no-action letters
from most Holding level lenders and a majority of the lenders to
our operating entities and we are confident that we will succeed in
obtaining waivers from our remaining lenders over the next few
months for loan covenant breaches during 2021.
Digitisation
In anticipation of a future with increasingly cashless
transactions, the Group made progress with the development of a
digital financial services platform. A pilot scheme planned in
Ghana during 2022. If successful and upon the approval of the Bank
of Ghana, this will be followed by the launch of a range of other
digital financial services in Ghana to support the growth of ASA
Savings & Loans clients' small businesses.
Additionally, as part of its digital strategy to provide future
online deposits to the public, the Group signed an agreement in
December 2021 to purchase the license of the financial inclusion
banking software system developed by Temenos for all its operating
subsidiaries, with implementation started in 2022 in Ghana and
Pakistan.
Outlook
Whilst the impact of the pandemic remains unpredictable on the
Group's operating subsidiaries, based on the positive developments
in 2021, the Company expects the operating environment for its
clients to continue to improve in most of its operating
markets.
As most of the Group's operating subsidiaries have returned to
growth and increased profitability, and subject to performance in
India, the Company is confident that during the course of 2022 it
will be able to substantially improve operational and financial
performance.
Notice of Full Year Results and AGM
The Company expects to announce its results for the year ended
31 December 2021 on 26 April 2022. The Company's Annual General
Meeting will be held on 22 June 2022.
Please note that the financial information provided in this
Trading Update is still subject to audit and, therefore, subject to
change.
Enquiries:
ASA International Group plc
Investor Relations
Véronique Schyns
+31 6 2030 0139
vschyns@asa-international.com
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END
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