Thanks to very strong performance both in Thailand and particularly in Cambodia and Laos, SET-listed digital finance firm Group Lease Public Company Limited (GL) has reported a staggering 255.85 million baht profit in the second quarter this year which nearly doubles from the same period last year.

The Q2 numbers are a new record high and represents the seventh consecutive quarterly new record-high profits. Given the positive economic outlook in Thailand and the region – plus the fact that GL’s new subsidiary in Indonesia, PT Group Lease Finance Indonesia (GLFI), has started operations — senior management has expressed confidence that the company will be able to continue the momentum of making new quarterly record-high profits well into the future.

“We had made projections in the past that our net profits of more than 500 million baht last year will double to 1 billion baht this year,” stated GL’s Executive Committee chairman Tatsuya Konoshita. “We are now quite confident that we will be able to achieve that.” Adding the 222.17 million baht net profits in the first quarter this year to the latest numbers, total profits in the first half-year period amounted to 478 million baht.

The 255.85 million baht Q2 net profits was 97.6% more than the 129.47 million baht net profits in the same quarter last year. Of the latest number, roughly 105 million baht came from the Thailand operations (representing about 17% growth) while the remaining 150 million was contributed from GL’s operations in Cambodia and Laos.

Mr. Tatsuya noted that the estimated 120 million baht profit from Cambodia was particularly outstanding as it roughly tripled from the 40 million baht profits in the same period last year. Meanwhile, GL Laos and Thanaban contributed about 15 million baht profits each in this quarter. GL Laos has been operating since September last year while Thanaban in Thailand was acquired by GL in 2014.

Mr. Tatsuya explained that although Laos is a small country, it will significantly make roughly 10 million baht profits contribution per month from within this year. “In Laos, we are by far the top market leader in the financing of Kubota agricultural machineries and motorcycles,” he said.

Since the operations in Indonesia are just starting, Cambodia will remain the star performer of the GL group in the foreseeable future. Mr. Tatsuya noted that the performance of GL Finance (GLF, the Cambodian subsidiary) in Q2 could have been much better if it had not been for the slowdown of motorcycle sales caused by the implementation of a 10% Value Added Tax (VAT) and the negative impact of a drought similar to that in Thailand.

The Cambodian government has been charging the VAT for a long time but only began strictly enforcing it for motorcycle sales in April this year which has caused some market disruptions. But after the initial adjustment, the market situation has now returned to normal while the drought was also over.

“Therefore, we expect strong recovery in the Cambodian market – and hence our performance there – in the third quarter and thereafter,” Mr. Tatsuya stated. Through a cost-effective and highly efficient digital finance platform developed by itself, GL has been very successful in expanding the financing business for HONDA motorcycles, Kubota agricultural machinery and extending loans for small and medium enterprises (SMEs). The same digital finance platform has now been adopted in Laos and Indonesia making the Lao operations profitable only after four months after the launch of business.

Meanwhile, Mr. Tatsuya stated that the Indonesian business looks highly promising. From its ‘test’ Point of Sales (POS) in southern Sumatra, GLFI signed two contracts for the leasing of agricultural machinery on July 25, the first day when the company formally commenced operations in Indonesia, while also receiving 12 loan applications on the same week.

“This is a very promising start,” Mr. Tatsuya said. The latest entry into the Indonesian market marks an important turning point that will support the company’s next phase of major expansion because of the huge business potentials from Indonesia’s over 250 million population. “We are the financial specialist for rural areas and much of Indonesia is rural because it has about h12,000 islands,” Mr. Tatsuya said. GL Chairman and Chief Executive Officer Mitsuji Konoshita has stated before that the Indonesian market will be ten times the size of the Cambodian market.