Group Lease Public Company Limited reported core business operations remain profitable in 1Q2020, however recorded a net loss of 115.42 million baht due to extraordinary expenses
Group Lease Public Company Limited reported 1Q2020 net loss of 115.42 million baht due to extraordinary expenses such as legal costs, exchange rate losses, and a special Covid-19 provision which all negatively impacted net profit. The Company has already proactively taken steps to reduce the impact of Covid-19 and will continue its smart growth strategy as core business operations remain profitable
Mr. Alain Dufes, Chief Financial Officer of Group Lease Public Company Limited, revealed “the Company lost 115.42 million baht in 1Q2020 mainly due to an increase in extraordinary expenses namely 28 million baht in legal costs, a special 82 million baht provision due to Covid-19, and 52 million baht in unrealized losses of exchange rate. Those 3 extraordinary expenses total more than 163 million baht and without those we would have been profitable this quarter. No one expected this economic downturn caused by Covid-19, but thankfully, we have focused the last 2 years becoming more efficient. In Thailand, we are now working with 17% more dealers than a year ago. This has proven effective as in March as the crisis began, we changed our hire purchase credit policy in Thailand, which should allow us to maintain good quality customers even as the economy worsens. Year-over-year and quarter-over-quarter, our operating expenses have declined which will serve us well during this shaky economic period.
In the asset-backed loan business, the actions taken to increase the efficiency show good result with an increase of contracts by 73% per branch with a lower cost.
Outside Thailand, our focus is on microfinance lending which continues to grow and perform well—income from group loans is up 27% compared to last year. While currently the legal fees, Covid-19 special provision, and unrealized losses on exchange rate gain the headlines as they impact net profit now, our improving business performance will impact the headlines in the future.”
Mr. Tatsuya Konoshita, Chief Executive Officer of Group Lease Public Company Limited, stated, “while we spent the last few years becoming more efficient and building a strong foundation, last year we started to focus again on growth and continued that for this first quarter. While the economic situation is unclear, we have more than 3.2 billion baht in cash to ride out the economic storm and we can pick where and when to invest in good customers. Our focus will be to continue to grow, but we will take good market share and be picky because our strong business foundation allows it. As our CFO stated, we only made a loss this quarter due to non-cash expenses: unrealized exchange rate losses and a special provision for Covid-19. Legal cost for now continue to impact the bottom line.
Our business operations are still profitable, our cash position is large, and we look forward to delivering great results in the near future.”