August 3, 2020
Access Financial Services Limited (AFS) for the three months ended June 30, 2020 reported $376.70 million in total interest income, an 8% decrease relative to the $407.94 million recorded in 2019. Of this, Interest Income from Loans amounted to $374.37 million (2019: $407.75 million), while Interest Income from Securities totalled $2.34 million (2019: $189,000).
Interest Expense for the period totalled $70.20 million, a 55% increase compared to the $45.22 million booked in 2019. This resulted in AFS booking a Net Interest Income of $306.51 million for the period, 15% less than the $362.72 million in 2019.
Net Fees and Commission Income for the period under review amounted to $104.03 million, 32% drop from the $152.74 million in 2019. As a result, AFS booked a total of $410.53 million for Net Trading Income, 20% decrease from the $515.45 million booked for the comparable period in 2019.
AFS reported income from Money service fees and commission of $110,000 (2019: $499,000) and from other income of $27.10 million (2019: $20.46 million). Foreign Exchange losses of $7.44 million was reported relative to a gain of $2.29 million booked same time last year. As such, other operating income for the period totalled $19.76 million compared with $23.24 million recorded in 2019.
AFS reported Operating Expenses for the period of $381.18 million (2019: $377.70 million). Of this:
- Staff Costs totalled $168.41 million (2019: $166.25 million)
- Allowance for Credit Losses amounted to $66.99 million (2019: $34.62 million), “this increase was due to higher delinquency levels from the impact of COVID19” AFS highlighted.
- Depreciation & Amortization amounted to $26.25 million (2019: $8.06 million)
- Marketing Expenses totalled $10.26 million (2019: $17.53 million)
- Other Operating Expenses booked for the period totalled $109.27 million (2019: $151.25 million)
AFS reported Profit before Taxation of $49.12 million for the period relative to $160.99 million recorded in 2019. Following a taxation amount of $16.11 million (2019: $4 million), AFS booked a Profit for the period of $33.01 million, an 80% decrease relative to the $164.98 million recorded for the comparable period in 2019.
However, total comprehensive income decreased 61% to 69.82 million from $178.24 million booked same time last year.
Consequently, earnings per share for the period amounted to $0.12 (2019: 0.60). The trailing twelve months earnings per share amounted to $0.72. The total number of shares used in the calculations amounted to 274,509,840 units. Additionally, AFS’s stock price closed at $25.21 as at the end of trading on July 31, 2020.
AFS noted, “The results for this quarter reflect the continuing impact of COVID-19 on our business, as we see tepid loan disbursements and higher levels of delinquency”
Furthermore, management stated, “Loan disbursements for Access were affected by the reduction in economic activity, however it has since improved with the relaxation of the restrictions implemented by the Government during June 2020. Our operations in Florida, Embassy Loans Inc. (Embassy Loans) also experienced lower disbursement due to reduced economic activity and the stimulus packages offered by the US Government.”
Balance Sheet Highlights:
As at June 30, 2020, the company’s assets totalled $5.79 billion, up 8% from $5.37 billion in 2019. This increase was largely attributable to ‘Cash and Cash Equivalents’ which amounted to approximately $857.52 million 62% more than $530.51 million in 2019. Management noted, “Given the ongoing assessment of the economic fallout and uncertainty surrounding the length of time the pandemic will persist, we are currently are maintaining an increased level of liquidity reflected in the Cash and Cash Equivalents amount of $858 million as at the period end.”
Shareholder’s equity as at June 30, 2020 stood at $2.24 billion (2019: $2.08 billion) resulting in book value per share of approximately $8.16 (2019: $7.56).
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