TIDMASAI
RNS Number : 9112Q
ASA International Group PLC
24 February 2023
Press Release
ASA International Group plc announces 2022 Year-End Trading
Update
Amsterdam, 24 February 2023 - 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 fiscal year ended 31 December 2022 ('the
Period').
Key highlights:
FY 2022 FY 2021 FY 2020 % Change % Change
(UNAUDITED) (AUDITED) (AUDITED) FY 2021 FY 2021 -
- FY FY 2022
2022
(constant
currency)
Number of clients (m) 2.3 2.4 2.4 -3%
Number of branches 2,028 2,044 1,965 -1%
OLP (1) (USD m) 351.2 403.7 415.3 -13% 5%
Gross OLP (USD m) 367.6 430.7 445.3 -15% 3%
Average Gross OLP per
client (USD) 160 181 187 -12% 6%
PAR > 30 days (2) 5.9% 5.2% 13.1%
(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 installments
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 continued to improve compared to
2021 with OLP growth and high portfolio quality in most markets
despite the challenging operating environments, especially in India
and Myanmar.
-- In India, there was an intentional and substantial decrease
in our on-book gross loan portfolio, from USD 76.7m in 2021 to USD
22.4m in 2022, due to a primary focus on collections, whilst in
most of the other markets there was healthy operational growth.
-- The Group's Gross OLP excluding India increased from USD
316.6m in 2021 to USD 322.7m in 2022 despite the impact of
substantial currency depreciation in almost all countries. In
constant currency, the Gross OLP excluding India grew by 24%.
-- High OLP growth in Ghana, Pakistan, and the Philippines was
tempered by significant currency depreciation in these markets (GHS
down 65%, PKR down 28% and PHP down 9% against USD in the Period),
which contributed to the decrease of Group OLP in USD terms.
-- PAR>30 for the Group's operating subsidiaries increased
from 5.2% in 2021 to 5.9% in 2022, partially due to the decrease in
portfolio quality in India, combined with a shrinking OLP in US
dollar terms in some of our other major countries due to
substantial currency devaluation. PAR>30 for the Group excluding
India is 2.9%. Ghana and Tanzania had an outstanding portfolio
quality, with PAR>30 less than 0.5%.
-- ASA India's collection efficiency continued to improve
reaching 87%. As of 31 December 2022, ASA India had collected USD
3.6 million from a total of USD 22.9 million in written-off loans
since 2020.
-- Cash and cash equivalents reduced to approximately USD 56m
following large debt settlements, primarily in India. The Company
maintains a significant funding pipeline of USD 194m of future
wholesale loans with majority supported by term sheets and/or draft
loan documentation. The terms and conditions of the remaining loans
are being negotiated with lenders.
-- For the year ended 31 December 2022 the Company expects to
continue to improve in pre-tax profit and net profit compared to
2021.
Dirk Brouwer, Chief Executive Officer of ASA International Group
plc, commented:
" W e are pleased that all but two of our major operating
subsidiaries reached or exceeded pre-covid operating performance on
a constant currency basis in 2022. The performance of most of our
operating countries, Ghana, Pakistan, the Philippines, Kenya and
Tanzania, was excellent in terms of portfolio quality, growth, and
profitability. Though as expected, and against the backdrop of
global market volatility, FX movements have significantly impacted
the Group OLP performance in USD terms. Most of our clients and
their businesses in these countries have shown again to be
resilient despite operating in an environment with high
inflation.
"As a result of the improved operating performance in 2022, we
expect pre-tax income and net income of the Group for 2022 to be
substantially better than what was achieved in 2021. "Whilst the
impact of inflation and the related FX movements will continue to
dampen the Group's financial performance in USD terms this year, we
remain confident that the improved operating developments will lead
to improved performance in 2023. Despite the continuing challenging
operating environment in India and Myanmar, overall, we expect
higher demand for our loans in 2023."
Impact of foreign exchange rates
As a USD reporting company with operations in thirteen different
currencies, currency movements can have a major effect on the
Group's USD financial performance and reporting.
During FY 2022, currency movements of operating currencies in
Asia and Africa mostly depreciated against the US dollar. The US
dollar particularly strengthened against currencies in Pakistan,
Sri Lanka, the Philippines and Myanmar in Asia, and Ghana, Nigeria
and Sierra Leone in Africa. This had an impact on 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 33.7m.
Funding
Unrestricted cash and cash equivalents reduced to approximately
USD 55m as of 31 December 2022. The Group managed to raise
approximately USD 157m in new debt funding in 2022. In line with
market developments, funding costs have increased by approximately
100 bps, which will have limited impact on our 2023 results. At end
of 2022, the Company had a funding pipeline of USD 194m future
wholesale loans, majority of which are supported by term sheets
and/or draft loan documentation The terms and conditions of the
remaining loans are being negotiated with lenders.
The Group has managed to secure waivers and/or no-action letters
from most Holding level lenders and some 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
weeks for loan covenant breaches which occurred during the
Period.
Digitalisation
In anticipation of a rapidly digitizing world, also in the
segment of our low-income clients the Group made progress with the
implementation of the digital strategy to have a more attractive
and competitive client proposition. Our digital strategy entails
the implementation of our core banking system, our digital
financial services platform ("DFS app"), and our route to embedded
finance with the so-called Supplier Market Place ("SMP"). Along
with the digitalization toward the clients, we will make progress
in further digitizing our employee processes as well.
The implementation of the Core Banking System (T24) in Pakistan
continues as planned and is targeted to go live in the second half
of 2023.
The SMP app is currently being rolled out in Ghana. The first
clients are onboarded and placing their online orders. The DFS app
in combination with the new Core Banking Platform in Ghana will go
live after the Pakistan implementation.
Outlook
Whilst the inflation and related FX movements will continue to
impact the Group's operating subsidiaries ' financial performance
in USD terms, based on the positive developments throughout 2022,
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 2023 it
will be able to continue to improve operational and financial
performance.
Regional performance:
South Asia
% Change
FY 2021 -
FY 2022 FY 2021 FY 2020 % Change FY 2022
FY 2021
- FY (constant
(UNAUDITED) (AUDITED) (AUDITED) 2022 currency)
Number of clients (m) 0.9 1.1 1.2 -15%
Number of branches 670 778 758 -14%
OLP (USD m) 118.6 182.3 217.8 -35% -19%
Gross OLP (USD m) 128.5 201.4 238.7 -36% -21%
Average Gross OLP per
client (USD) 137 182 201 -24% -7%
PAR > 30 days 11.2% 9.6% 21.3%
-- ASA Pakistan continued to grow its business with the number
of clients up 18% from 512k to 606k, and the number of branches up
by 20 to 345. OLP increased from USD 77.7m to USD 79.1m (up 30% on
a constant currency basis). Gross OLP/Client decreased from USD 154
to USD 131, down by 15% (up 9% on a constant currency basis).
PAR>30 increased from 0.2% at year-end 2021 to 0.7% at year-end
2022.
-- ASA Pakistan received the Microfinance Banking ('MFB')
licence from the State Bank of Pakistan ('SBP') on 24 May 2022.
-- ASA India continued to intentionally shrink its on-book OLP
as it focused on the recovery of overdue loans. Reduced loan
disbursements and significant write-offs led to on-book OLP
decreasing by 77%. With moratoriums ending in June 2022, PAR>30
increased from 19.7% at year-end 2021 to 49.0% by year-end
2022.
-- ASA India's number of clients was down 47% from 541k in 2021
to 284k in 2022 and the number of branches was down by 33% to 261
by year-end 2022, with its portfolio (on-book and off-book)
decreasing from USD 96.9m year-end 2021 to USD 35.8m by year-end
2022 (down 59% on a constant currency basis). The off-book
portfolio in India decreased from USD 35.7m to USD 21.5m, down 40%
(down 33% on a constant currency basis).
-- Lak Jaya, the Group's operating subsidiary in Sri Lanka, has
seen its number of clients go down by 15% from 53k to 45k with its
number of branches also decreasing from 66 at year-end 2021 to 64
by year-end 2022. OLP decreased from USD 7.7m to USD 3.8m (down 12%
on a constant currency basis). Gross OLP/Client decreased from USD
158 to USD 89 (up 1% on a constant currency basis). PAR>30
increased to 8.5% by the end of 2022 from 6.0% at year-end
2021.
South East Asia
% Change
FY 2021 -
FY 2022 FY 2021 FY 2020 % Change FY 2022
FY 2021
- FY (constant
(UNAUDITED) (AUDITED) (AUDITED) 2022 currency)
Number of clients (m) 0.4 0.4 0.4 6%
Number of branches 441 420 415 5%
OLP (USD m) 63.2 62.3 74.2 1% 13%
Gross OLP (USD m) 67.0 66.8 80.8 0% 12%
Average Gross OLP per
client (USD) 158 167 189 -5% 5%
PAR > 30 days 6.5% 2.1% 4.1%
-- Pagasa Philippines' number of clients increased by 13% from
289k in 2021 to 325k by year-end 2022 and the number of branches
went up by 21 to 345 with its loan portfolio also increasing from
USD 44.6m at year-end 2021 to USD 49.4m year-end 2022 (up 21% on a
constant currency basis). PAR>30 improved from 2.5% to 1.7%.
-- Despite the continued volatile market conditions, ASA Myanmar
has increased its collection efficiency. The number of clients in
Myanmar was down 11% from 111k to 99k and the number of branches
remained stable at 96 by year-end 2022 with its loan portfolio
decreasing from USD 17.7m to USD 13.8m (down 8% on a constant
currency basis) and PAR>30 increased from 1.1% to 20.4%.
West Africa
% Change
FY 2021 -
FY 2022 FY 2021 FY 2020 % Change FY 2022
FY 2021
- FY (constant
(UNAUDITED) (AUDITED) (AUDITED) 2022 currency)
Number of clients (m) 0.4 0.5 0.4 -5%
Number of branches 446 440 433 1%
OLP (USD m) 82.5 94.2 77.8 -12% 23%
Gross OLP (USD m) 84.8 95.9 79.5 -12% 23%
Average Gross OLP per
client (USD) 196 210 178 -7% 30%
PAR > 30 days 4.0% 2.6% 2.7%
-- ASA Savings & Loans, the Group's operating subsidiary in
Ghana, continued to grow with client numbers up by 12% from 158k to
177k serviced from 137 branches, up by 4 compared to the year-end
of 2021. OLP decreased by 16% from USD 48.9m to USD 41.0m (up 38%
on a constant currency basis), and Gross OLP/Client decreased from
USD 310 to USD 231, down by 25% (up 24% on a constant currency
basis). PAR>30 improved from 0.3% to 0.2%.
-- ASA Nigeria's client numbers were down by 13% from 253.6k to
219.8k serviced from 263 branches, and OLP was slightly down from
USD 38.5m at year-end 2021 to USD 37.3m (up 5% on a constant
currency basis). Gross OLP/Client was up from USD 157 to USD 179
(up 24% on a constant currency basis). PAR>30 increased from
4.6% to 7.1%.
-- ASA Sierra Leone has seen a decrease in its number of clients
from 45.3k to 36.9k, serviced from 46 branches, up by 2. OLP
decreased from USD 6.7m to USD 4.3m (up 6% on a constant currency
basis) and Gross OLP/Client also decreased from USD 154 to USD 123
(up 34% on a constant currency basis). PAR>30 increased from
7.5% to 10.7%.
East Africa
% Change
FY 2021 -
FY 2022 FY 2021 FY 2020 % Change FY 2022
FY 2021
- FY (constant
(UNAUDITED) (AUDITED) (AUDITED) 2022 currency)
Number of clients (m) 0.5 0.4 0.3 21%
Number of branches 471 406 359 16%
OLP (USD m) 86.8 64.9 45.4 34% 39%
Gross OLP (USD m) 87.3 66.6 46.2 31% 36%
Average Gross OLP per
client (USD) 172 160 145 8% 12%
PAR > 30 days 0.9% 1.3% 13.2%
-- ASA Tanzania significantly expanded its operation as the
number of clients went up from 174k to 217k serviced from 180
branches, up by 37. OLP increased from USD 34.3m to USD 51.2m (up
51% on a constant currency basis) and Gross OLP/Client increased
from USD 200 to USD 237 (up 20% on a constant currency basis) .
PAR>30 improved from 0.5% to 0.4%.
-- ASA Kenya's number of clients increased from 119k to 141k
serviced from 124 branches, up by 12. OLP increased from USD 16.1m
to USD 16.9m (up 14% on a constant currency basis) and Gross
OLP/Client decreased from USD 140 to USD 120 (down 6% on a constant
currency basis). PAR>30 improved from 1.1% to 0.8%.
-- ASA Uganda's number of clients went up from 92k to 107k
serviced from 110 branches, up by 7. OLP increased from USD 9.0m to
USD 11.6m (up 35% on a constant currency basis) and Gross OLP per
client increased from USD 107 to USD 109 (up 7% on a constant
currency basis) . PAR>30 significantly improved from 3.8% at
year-end 2021 to 0.9% in 2022 .
-- ASA Rwanda's number of clients went up from 18k to 21k
serviced from 30 branches. OLP increased from USD 3.3m to USD 4.3m
(up 34% on a constant currency basis) and Gross OLP/Client
increased from USD 187 to USD 207 (up 14% on a constant currency
basis). PAR>30 slightly increased from 4.5% to 4.6%,
-- ASA Zambia greatly expanded its operations, with its number
of clients up from 15k to 21k serviced from 27 branches, up by 9.
OLP increased from USD 2.2m to USD 2.9m (up 42% on a constant
currency basis) and Gross OLP/Client decreased from USD 151 to USD
139 (up 0.1% on a constant currency basis). PAR>30 increased
from 0.3% in 2021 to 5.0% in 2022.
Notice of Full Year Results and AGM
The Company expects to announce its results for the year ended
31 December 2022 on 18 April 2023. The Company's Annual General
Meeting will be held on 15 June 2023.
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
Mischa Assink ir @asa-international.com
About ASA International Group plc
ASA International Group plc (ASAI: LN) is one of the world's
largest international microfinance institutions, with a strong
commitment to financial inclusion and socioeconomic progress. The
company provides small, socially responsible loans to low-income,
financially underserved entrepreneurs, predominantly women, across
South Asia, South East Asia, West and East Africa.
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