14 Nov 2016
Thanks to continuous expansion of its growing regional businesses, SET-listed digital finance firm Group Lease Public Company Limited (GL) has reported a new record-high net profit of 260.41 million baht for the third quarter ending September, which represents a whopping 73.29% increase from the same period last year.
This marks the eight consecutive new quarterly record-high profits for GL, which prides itself as the first Thailand-based financial services company that has developed a highly efficient digital finance platform now being used to support its business expansion into Thailand’s neighboring countries of CLMV plus Indonesia and Sri Lanka.
GL Chairman and Chief Executive Mitsuji Konoshita noted that the Q3 profits would have been considerably higher at nearly 300 million baht if it had not been for one-time fees impact from several acquisitions.
He added that these acquisitions – particularly the 29.99% stake GL acquired in Commercial Credit & Finance Plc (CCF), a leading and highly profitable finance firm listed on the Colombo Stock Exchange – will help raise GL’s profits to substantially higher levels beginning in Q4.
CCF has projected to make a full-year profit of US$24 million this year and GL will start booking its share of the profits in Q4 from its 29.99% stake.
The chairman of GL’s executive board Tatsuya Konoshita explained further that the Q3 profits were also dragged by about 40 million baht of interest expenses for a new batch of US$130 million convertible debentures (CDs) that were issued for subscription by GL’s strategic partner in Indonesia, J Trust Asia (JTA).
He said the results have shown improvement in all fronts, with the Cambodian operations continuing to be the star performer while the relatively new operations in Indonesia have, surprisingly, turned positive in this quarter.
A rough breakdown of the Q3 profits shows the Cambodian operations (which combine the regular leasing of motorcycles and agricultural machineries plus loans to SME businesses) contributing the largest portion of about 130 million baht, followed by Thailand operations (about 100 million baht), plus another 15 million baht each from the Thai subsidiary Thanabun and GL Laos.
On top of acquiring the 29.99% stake in the listed Sri Lankan finance firm CCF, GL is also mounting a full-scale expansion into Myanmar by taking over a micro-finance firm and partnering with local business tycoon U Aung Moe Kyaw, owner of Century Finance and the country’s leading liquor group Myanmar Distillery, to expand into a broad range of other financial services.
Raising more funds to support the company’s aggressive regional expansion, it recently decided to issue additional CDs totaling US$70 million in private placement (PP) – comprising of US$50 million to be subscribed by its strategic partner JTA and another US$20 million for an affiliate in Sri Lanka, Creation Investments Sri Lanka (Creation SL). Carrying three-year maturity, the conversion price for these CDs is set at 70 baht per share.