15 Aug 2019
Group Lease Public Company Limited reported 2Q2019 net loss of 1.80 million baht as the Company incurred higher legal related costs and a one-time accounting adjustment and also had the bankruptcy claim against the Company dismissed
Mr. Alain Jean Pascal Dufes, Chief Financial Officer of Group Lease Public Company Limited, revealed that “the Company lost 1.80 million in 2Q2019 mostly due to non-core operations. Revenue declined by 89 million or 12.1% compared to 2Q2018 and we partially offset this reduction by continuing to reduce our service and administration expense by 59 million or 18.0%, excluding additional legal fees. We did have a large increase in professional fees, 31 million more than a year ago, and had a 59 million negative adjustment related to IFRS 9 for our investment in associate in Sri Lanka. Those two items total 90 million and are the primary reason for our poor performance this quarter. The accounting adjustment is a one-time event and legal fees were unfortunately unavoidable as we continue to fight legal battles in multiple countries. In Thailand we had additional legal expense due to the bankruptcy case and preparing for the Singapore trial.”
Mr. Tatsuya Konoshita, Chief Executive Officer of Group Lease Public Company Limited, stated that “we continue to make significant progress in both protecting our business and restructuring it for future growth. We have worked diligently on legal and accounting matters to make sure on both of those fronts we protect our shareholders. We have increased our cash to more than 4,378 million to allow for business flexibility while still being able to meet any of our obligations in the short-term. This buildup of cash also served the purpose of helping us reduce our portfolio while we retool our credit criteria and seek a higher quality portfolio. I know some of our shareholders will be disappointed in our 2nd quarter result and for that I am sorry, but our sales decline was a tough choice we made in order to reduce our portfolio in Thailand and Cambodia to prepare for the economic uncertainly in those two markets, to get better control of the portfolio, and prepare for the next expansion starting late this year. Now we have seen improvements in portfolio performance across our company and now, coupled with our increased cash balance, are well positioned to lend to higher quality customers and expand our business.
As our CFO pointed out, we had high legal related fees this quarter which reduced our profitability. While we wish we did not have to fight in the courts, we must protect our shareholders and employees so we will have to bear these are costs for now. Today we did find out that some of these costs are already paying off—The Bankruptcy Court of Thailand ruled that GL is no longer under rehabilitation proceedings and is out of “automatic stay” as the Court dismissed the rehabilitation petition against us. The Court found that JTrust’s claim of our debt amount was unclear as their Civil claim against us has not yet completed and that GL is not insolvent as the Company currently has more assets than liabilities.”
Overall, we expect growth and seeking higher quality by the end of the year. We are optimistic about the challenges we face and we look forward to achieving successes for our shareholders and employees.