14 Aug 2013
A combination of solid business growth in Thailand and significant revenue contribution from overseas operations will drive SET-listed motorcycle-leasing firm Group Lease Public Company Limited (GL)’s net profits in the second half this year to new highs, chairman and chief executive Mitsuji Konoshita stated today (14 August 2013).
GL today reported a new high of second-quarter net profit of 90.8 million baht for the 3-month period ending June this year, roughly the same as the first quarter and a slight increase from the corresponding period last year of 88.7 million. Total profits for the first six months this year amounted to 181.5 million baht, up 25.6% from the same period last year.
But although the numbers for the first two quarters are similar, Mr. Konoshita pointed out that the actual results in the second quarter in fact were much stronger– thanks to continuously strong revenue growth in Thailand and the consolidation of profits from GL’s overseas operations.
“We booked a one-time charge of legal and other related expenses for the setting up of our Cambodian operations in Q2. If this charge is not included, our net profit for this quarter would be much higher,” Mr. Konoshita stated.
At the same time, the second-quarter profits also included the consolidation of 16.2 million baht profits from GL’s overseas operations. “This is the first time that overseas profits are significantly consolidated. It is the beginning and from here on, we are confident that overseas profits that will be consolidated will grow strongly,” Mr. Konoshita stated.
The overseas profits are derived from a range of financial services that GL renders, such as the procurement of funds for micro-finance lenders in Cambodia or other financial services undertaken by GL Holdings (GLH), GL’s wholly-owned holding company based in Singapore that focuses on raising cheap funds and providing a variety of comprehensive financial services to both the financial sector and other industries as well.
More revenue contribution from overseas is expected to come from another wholly-owned subsidiary in Cambodia, GL Finance (GLF), which is launching full-scale motorcycle-leasing operations in the current third quarter after an extended period of successful system testing and satisfactory trial operations. Enjoying exclusive rights to distribute the popular HONDA brand in Cambodia, GLF is targeting monthly sales of 2,000 units beginning this quarter with enormous growth potentials in the future.
GLF has recently opened three more Points of Sales (POSs) outside Phnom Penh, including two in Battambang and one in Ratanakiri. It expects to set up 26 more POSs to cover all dealers in Cambodia within this year.
Mr. Konoshita also noted that GLH in Singapore, which consolidates all of GL’s overseas operations, has established a dividend policy to pay out about 70% of its profits quarterly. The first payout will be from profits in the first two quarters this year.
Meanwhile, the company’s main operations in Thailand continue to register robust growth despite the current economic slowdown. This has been achieved thanks to aggressive sales and more expansion of dealerships. Monthly average sales of roughly 8,000 units in the second quarter (up about 35% from the corresponding period last year) are rising to about 10,000 units this quarter and will further increase to about 12,000 by year-end.
“Motorcycle leasing in Thailand is still growing strongly,” Mr. Konoshita asserted. “The economic slowdown may be hurting those doing hire-purchase business for other products. But GL is in a special position. Our own history shows that we have done very well after economic crises. Our industry is very unique – customers still have to buy motorcycles even when the economy is not good. Each installment is very small and the motorcycle is a real necessity in the people’s life,” he added.
“For us, this moment is opportunity,” Mr. Konoshita concluded.