Wednesday 14 February 2018

Sri Lanka's Central Finance net up in Dec quarter, says past profits overstated

ECONOMYNEXT - Profits at Sri Lanka's Central Finance Plc, a non-bank lender grew 18.9 percent to 1.4 billion rupees in the December 2017 quarter from a year earlier, but the firm made extra provisions which reduced last year's profits.

The group reported earnings of 6.54 rupees a share for the quarter in interim accounts filed with the Colombo Stock Exchange.

In the 9 months to December earnings were 18.22 rupees per share on total profits of 3.9 billion rupees, up 11.8 percent.

Central Finance said it had not fully accounted for leases gone bad in the past, which had tended to overstate profits for the past two years. Higher loss given default ratios (LGD) applied had reduced 9-month profits by 852 million rupees this year and 710 million rupees in 2016.

In the 3-months to December, the Central Finance reported corrected profits of 1.19 billion rupees for 2016, after originally reporting 1.22 billion rupees last year. In the 9-months profits were reduced to 3.55 billion rupees from 3.72 billion rupees originally reported.

Interest income grew 14.9 percent to 4.1 billion rupees, interest expenses grew 22 .2 percent to 1.3 billion rupees, and interest expenses rose

At company level interest income grew 14.9 percent to 4.08 billion rupees in the December quarter, interest costs rose at a faster 22.2 percent to 1.39 billion rupees and net interest income grew 11.6 percent to 2.7 billion rupees.

Its Leases and hires purchase book grew 6.5 percent to 60.9 billion rupees in the 9 months from March to December 2017.

Loan loss provisions rose to 136 million rupees from 61 million a year earlier.

Operating expenses rose 9.4 percent to 1.15 billion rupees.

Group gross assets rose to 82.6 billion rupees from 77.8 billion in March. Net assets grew to 31.4 billion rupees from 28.3 billion rupees after extra provisions.

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