Group Lease Public Company Limited reported 2018 third quarter revenue of 729.56 million baht and net profit of 104.64 million baht —4 consecutive profitable quarters after the one-time provision in 3Q of 2017.
Mr. Alain Dufes, Chief Financial Officer of Group Lease Public Company Limited, revealed that the Company continues to be profitable with 104.64 million baht in net profit for the third quarter of 2018—marking the fourth consecutive quarter of profitability. Revenue grew 0.5 million baht or 0.1% compared to the second quarter while service and administration expenses were reduced by 0.4 million baht or 0.1%. However, due to a decline in portfolio quality in Thailand which we have already started to address and a one-time write off in Indonesia totaling 12.51 million baht, credit costs increased 36.28 million baht or 20% compared to last quarter. Overall, net profit declined 17% (104.64 million baht from 125.98 million baht) and operational profit declined 23% (103.24 million baht from 134.69 million baht) in one quarter. Still, we had a much better financial result this quarter compared to the third quarter last year as profit increased from -2,267.43 million baht to 104.64 million baht.
Mr. Tatsuya Konoshita, Chief Executive Officer of Group Lease Public Company Limited, reiterated “the GL story of 2018 has been to have remain profitable every quarter, work with regulators to resolve any issues, and set up the company to be in the very best position for growth and increased profitability in 2019. We are meeting these goals as we have recorded our forth conservative quarter of profitability and have been profitable every quarter this year. Last quarter we revised our 2017 financial statement at the SEC’s request and we currently have no requests from them, but if they ask us anything then we will happily oblige.”
For future growth, we are taking steps in each country to improves our portfolio quality and processes to become more efficient in all countries, even if that means accepting a decline in portfolio as we have done in Cambodia. To increase our credit quality in Thailand, we changed our criteria starting in July to be stricter. This has caused our contract approval rate to decline resulting in slower portfolio growth, however we expect to see improvements in our credit costs starting in the end of 2018 and early 2019 due to the changes we have already made. We have already proactively increased our credit provisions and this quarter performed a one-time write-off in Indonesia to conservatively show our financial position. Our associate company in Sri Lanka has also proactively and conservatively provisioned for credit losses as they have increased their credit expense by 40% compared to 3Q2017. “For growth, Myanmar continues to be our main growth engine as expected. We received 368% more Honda contracts in 3Q2018 (almost 50,000 contracts) and have 272% more active microfinance customers now than we did a year ago, more than 145,000 now. Credit quality there still is remarkable and we still have 0% NPL in our microfinance lending.
Overall, we continue to expect Thailand to remain stable in size but with improved quality. Laos will continue to grow modestly while we will reduce our Cambodia exposure. Myanmar will continue provide exceptional growth while we expect our microfinance business to steadily grow and provide a future foundation of growth.” Mr. Konoshita concluded