People's Leasing revenues rise 27%
People's Leasing Company (PLC), saw its revenues rise nearly 27% in
the June quarter, led by growth in its core leasing business, the group
said. In results released to the Colombo Stock Exchange, the country's
biggest leasing company said group revenue rose to Rs. 4,367 million
during the first quarter of June 2012, from Rs.3,443 million reported in
the same quarter a year earlier.
"Revenue growth came, despite the company operating in a challenging
period," said D P Kumarage, Chief Executive Officer, People's Leasing
Company PLC. "We saw a sharp rise in cost of raising funds, because of
rising interest rates."
Recurrent Net profits increased by 7.3% from Rs. 671 million to Rs.
720 million. June quarter 2011 net profits includes a non-recurrent
general provision reversal of Rs 1,063 million which took the total net
profit for the first quarter 2011 to Rs 1,734 million. Net interest
income for the group rose three per cent to Rs.1,564 million rupees
during the first quarter of the 2012/13 financial year. Interest and
similar income rose 30% to Rs, 3,823 million in the June quarter.
Interest and similar income accounts for about 88% of the June quarter
group revenue.
The group Revenues from sales of imported vehicles fell to Rs. 59
million in June 2012, from Rs. 255 million a year earlier. Fee-based
activities were up Rs. 81 million rupees in June 2012, as against Rs. 61
million reported in the same quarter a year earlier. Income from other
activities was up to Rs. 404 million from Rs. 177 million, according to
provisional results filed with the Colombo Stock Exchange. The group
reported earnings per share of 43cents in the June quarter over Rs. 1.44
in the same quarter of 2011.
Rentals receivables on leases, higher purchase and Islamic finance
portfolio gained 28% to Rs. 78,792 million rupees year-on-year in the
first quarter. There was a slowdown in vehicle demand during the June
quarter, as motor vehicle prices rose sharply due to duty hikes and
depreciation of the Sri Lankan rupee. Cumulative motor vehicle
registrations are estimated to have fallen by 26% year-on-year to 94,169
in June 2012, according to the Department of Motor Traffic.
The money market average weighted prime lending rate has risen from
12.80% to 13.39% in the June quarter, which is up 4.61% year-on-year.
Interest and similar expenses, gained 58.20% to Rs. 2,259 million in
June 2012. This was mainly due to a 16% year-on-year increase in group
borrowings, excluding deposits from customers to Rs. 57,884 million.
There was also a 55% increase in deposits to Rs. 9,526 million.
"With the anticipated economic recovery towards the third and fourth
quarter of this year, we expect our disbursements to improve from the
present low levels," Kumarage said. "We currently remain well
capitalised with Tier I and Tier II Capital Adequacy Ratios at 25.42%
each, well above the minimum regulation of five and ten per cent each,"
Kumarage said. In June 2012, the company has also applied to the Central
Bank of Sri Lanka to register as a licensed finance company. If granted
it would convert the company's status from a specialised leasing company
and diversify its funding sources to include retail sources which would
be an added strength.
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