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29 May 2014 : Coup Has C hanged GL Fundamentals for the Better

Coup Has C hanged GL Fundamentals for the Better

29 May 2014

The fundamentals of SET-listed motorcycle leasing firm Group Lease Public Company Limited (GL) have changed significantly for the better in the aftermath of last week’s coup since the provincial economy is being rejuvenated by rice-mortgage payments to farmers and other economic stimulus measures.

Saying that the military takeover marked an important turning point  changing things for the better, GL chairman and chief executive Mitsuji Konoshita stated:  “There will be a time  lag of about two months before the real impact begins to bear fruit.” He added:  “This means we will see marked improvement in our results in the third and last quarters this year,” he added.

Mr. Konoshita maintained that the improved fundamentals will give a big boost to all-year 2014 performance. Additionally, the company’s growing motorcycle-leasing business in neighboring Cambodia,  which reached the break-even point in March,  will also begin to make meaningful profits contribution to the  consolidated accounts this year.

Prior to  the latest political change, GL had been expanding sales in Thailand despite the economic slowdown.  “While other companies stopped growing or even shrank their businesses, we continued to grow even during bad times so  that we would be able to realize maximum gains once the(political and economic)  situations return to normal,” Mr.  Konoshita stated.

The company’s hire-purchase income rose by about 30% in the first quarter and continued  to grow at about the same pace in the current quarter. But now that the provincial economy is being reactivated and rural incomes are being boosted by the long-delayed rice-mortgage payments, GL’s sales are expected to jump more than 40% in the third and last quarter.

Mr. Konoshita explained that as the company continued to expand sales, it  would also have to incur expenses.  “But the profits will catch up later,” he added.

GL’s consolidated net profit in the first quarter dropped markedly  to 10.76 million baht from 90.63 million  baht in the same period last year owing to large provisions for bad and doubtful debts which were necessitated by clients’ late payments prompted by the  economic slowdown.  These provisions rose from 60.82 million baht to 120.98 million baht over the  same period.

The company has maintained that the large provisions in Q1 could become a blessing in disguise since a large portion could be reversed back into profits once market conditions return to normal. This is seen as likely to happen in the third and last quarters this year now that the company’s overall undamentals have  changed.

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SET Announcements

16 May 2014 : Management Discussion and Analysis Quarter 1 Ending 31-Mar-2014

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Press Releases

16 May 2014 : GL Expects Colossal Profits Jump from Cambodia

GL Expects Colossal Profits Jump from Cambodia

16 May 2014

Against a business slowdown caused by the prolonged political crisis here, SET-listed motorcycle leasing firm Group Lease Public Company Limited (GL) has turned to expand aggressively in the booming markets of Cambodia and expects profits from the Cambodian operations to match that of Thailand’s operations next year.

According to GL chairman and chief executive Mitsuji Konoshita, the motorcycle leasing operations in Cambodia, conducted through GL’s wholly-owned subsidiary GL Finance (GLF), had reached the break-even point at the end of March and would start making significant profit contributions to the mother company here starting from the current quarter.

GLF was doing about 1,400 units of motorcycles per month at the end of March. Thanks to GL’s exclusive rights to finance the popular HONDA brand and the huge growth potentials in the Cambodian markets, the company has projected that monthly sales would jump to 3,500 units at the end of this year and grow further to about 5,000 units next year. These projections compare to the relatively stable monthly sales of about 7,000 units in Thailand.

“Our Cambodian operations are particularly promising because of the high profit margins and low NPLs,” Mr. Konoshita stated. Against the company’s existing 11.4% NPLs in Thailand (calculating on the basis of 3-month overdue clients), there is no NPLs for the outstanding portfolio of about 8,000 clients in Cambodia while the profit margins there are also substantially higher.

GL achieved a record-high net profit of 357.38 million baht in 2012 but this dropped to 240.31 million baht last year in the face of high provisions for bad and doubtful debts necessitated by late payments from clients because of the economic slowdown.

The company yesterday reported a consolidated net profit of 10.76 million baht in the first quarter this year, a steep decline of 88.13% from the 90.63 million baht net profit in the first quarter last year, which has resulted from the continuously high provisions for bad and doubtful debts as well as higher expenses from the start-up operations in Cambodia.

“Our clients and revenue in Thailand have continued to grow despite the economic slowdown and political uncertainty while (our operations in ) Cambodia are registering very rapid growth,” Mr. Konoshita stated. Thanks to a combination of strong growth potentials, good assets quality and high profit margins, he expected the total profit from Cambodia to match or even surpass that of Thailand within next year.

In an official filing with the SET, the company said total revenue from high-purchase interests and other income in Q1 rose 19.81% from 320.80 million baht last year to 384.38 million baht this year, which took into account the first significant consolidation of 12.29 million baht from the Cambodian subsidiary.

But the higher revenue was weighed down by a substantial increase in reserves for bad and doubtful debts, which rose 98.92% from 60.82 million baht to 120.98 million baht over the same period. The bulk of the reserves was provided for the Thai operations while only about 2 million baht was set aside as mandatory reserve for the Cambodian subsidiary. The Q1 profit was also partly affected by larger expenses from start-up costs in Cambodia.

Mr. Konoshita maintained that the large provisions in Q1 could become a blessing in disguise since a large portion could be reversed into profits once market conditions in Thailand return to normal which, he expected, could happen in the second half this year.

He added that the Q1 numbers should have been the bottom since the company’s overall performance has started to improve starting in Q2 because of better conditions here and rising profit contributions from the Cambodian subsidiary.

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SET Announcements

15 May 2014 : Clarification for the operating result of Q1/2014

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SET Announcements

15 May 2014 : Financial Statement Quarter 1/2014

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SET Announcements

15 May 2014 : Reviewed Quarter 1 and Consolidated F/S (F45-3)

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SET Announcements

12 May 2014 : To inform exercise date of GL-W3 (No.5)

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Press Releases

10 May 2014 : 28th Anniversary Ceremony and Scholarship Distribution to Staff’s Children for 2014

28th Anniversary Ceremony and Scholarship Distribution to Staff's Children for 2014

10 May 2014

Group Lease Public Company Limited (The Company) had arranged its 28th Anniversary Ceremony consisting of the paying homage to Brahmin shrine and Buddhist Ritual Ceremony. Traditionally on the same date, there is also a distribution ceremony of scholarships to the staff’s children who got good study result for the past academic year. For this year, there was also a distribution of souvenirs to the staff who was a Lecturer for In-house Training Courses of the Company.

Mr. Mitsuji Konoshita, Chairman and Chief Executive Officer, addressed the opening of the ceremony.

Chairman pictured with the staff’s children who received scholarship for the academic year 2013

Chairman pictured with the staff who received souvenirs for being Lecturer for In-house Training Courses.

Pay Homage to Brahmin Shrine of the Company

Buddhist Ritual Ceremony

Signs Anointing for prosperity

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SET Announcements

02 May 2014 : The exercise result of GL-W3 (No.4)

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SET Announcements

02 May 2014 : Inform exact rate of Dividend amount