AFS reports 65% decrease in nine months net profit

February 11, 2021

Access Financial Services Limited (AFS) for the nine months ended December 31, 2020, reported total interest income of $1.14 million, a 11% decrease when compared with the $1.28 billion reported for the same time period in 2019. Of this, Interest Income from Loans amounted to $1.13 billion (2019: $1.27 billion) while Interest Income from Securities totalled $5.42 million up from the $899,000 reported in 2019. Total interest income reported for the quarter was $387.84 million, a 13% decrease when compared to the $444.48 million reported in the same quarter for 2019.

Interest Expense charged for the nine month period totalled $195.88 million relative to $167.06 million in 2019. As such, AFS booked a Net Interest Income of $939.38 billion, a 15% decrease relative to the $1.11 billion reported for the same period in 2019. While, for the quarter, net interest income closed at $327.55 million (2019: $380.63 million).

Net Fees and Commission Income for the period under review amounted to $320.85 million, a 39% decrease when compared to the $523.19 million reported for the comparative period in 2019 due to lower levels of disbursements. AFS, for the nine months ended December 31, 2020 reported $1.26 billion (2019: $1.63 billion) for Net Trading Income.

A 54% decrease was reported for income from both Money Services which totaled $689,000 (2019: $1.50 million), while other income rose by 76% to $99.22 million (2019: $56.42 million). The company also reported Foreign Exchange loss of $13.01 million, relative to a gain of $2.62 million in 2019.

Consequently, total other operating income for the period amounted to $86.90 million, a 44% increase relative to the $60.54 reported for the same period in 2019. Additionally, net operating income closed the period under review at $1.35 billion (2019: $1.69 billion). While, for the quarter ended December 31, 2020, net operating income totalled $459.67 million (2019: $580.80 million).

AFS recorded total operating expenses of $1.17 billion, a decrease of 9% compared to $1.28 billion in 2019 due to efforts to improve efficiency AFS noted. Of this, ‘Staff Costs’ decreased 4% to $498.91 million (2019: $522.19 million) and ‘Allowance for Credit Losses’ amounted to $289.57 million, a decrease of 6% compared to $307.59 million booked for the prior year’s corresponding period. ‘Depreciation & Amortization’ and ‘Other Operating Expenses’ booked for the period was $90.27 million (2019: $38.64 million) and $261.90 million (2019: $361.32 million) respectively.

AFS reported a profit before taxation of $176.06 million relative to $407.66 million in 2019. AFS booked a profit for the period of $127.85 million (2019: $368.50 million), after tax charges of $48.21 million (2019: $39.15 million). Net profit for the quarter amounted to $66.30 million compared to a profit of $88.87 million booked for the comparable quarter of 2019. Management noted, “ The performance of the Group reflects the impact of COVID-19 over the past nine months as loan disbursements have declined year over year due to the reduction in economic activity.”

Consequently, earnings per share for the period amounted to $0.47 compared to $1.34 for the corresponding period in 2019. The EPS for the quarter amounted to $0.24 compared to $0.32 in the prior year. The trailing twelve months EPS is $0.32. The number of shares used in this calculation was 274,509,840 units. Notably, AFS stock closed the trading period on February 10, 2020 at a price of $21.86 with a corresponding P/E of 67.35.

Balance Sheet Highlights:

As at December 31, 2020, the company’s assets totalled $5.49 billion, a slight 1% decrease relative to the $5.54 billion in 2019. This fall in assets was as a result of the 12% decrease in ‘Loans and Advances’ amounting to $4.05 billion (2019: $4.59 billion), this company this is due to lower levels of disbursements. However, the reduction was offset by an increase in ‘Cash and Cash Equivalents’ closing at $554.59 million (2019: $195.07 million), due to company aim to maintain additional cash to manage liquidity risk during the pandemic.

Shareholder’s equity as at December 31, 2020 stood at $2.32 billion (2019: $2.19 billion) resulting in book value per share of approximately $8.45 (2018: $7.97).


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