PRASAC Microfinance Institution Plc, the largest microfinance provider in Cambodia, has released its 2020 second quarterly audited report to the Securities and Exchange Commission of Cambodia (SECC), audited by Ernst & Young (Cambodia).
The report recorded quarterly revenue at 431.531 billion riels ($105,357,782), before-tax profit at 66.053 billion riels ($16,127,434) and after-tax profit (at the corporate rate of 20 percent) at 52.839 billion riels ($12,901,117).
Results are mixed compared with the company’s 2019 financials over the same period, with revenue up from 384.723 billion riels ($93,933,582) but before-tax profit down from 129.681 billion riels ($31,662,783).
PRASAC’s Executive Vice-President and Chief Marketing Officer Say Sony said the reason for the large profit decline was from “loan-loss provisions” this quarter because of the COVID-19 pandemic.
A loan-loss provision is an income statement expense set aside as an allowance for uncollected loans and loan payments. The provision is used to cover different kinds of loan losses such as non-performing loans, customer bankruptcy and renegotiated loans that incur lower-than-previously-estimated payments.
“Our profits have dropped because of increasing loan provisions. This is because of an increase in the rate of non-performing loans from some of our clients affected by the impact of COVID-19. However, looking forward, we can see many of our client’s businesses are now returning and are hopeful of a strong performance in the next quarter,” he said.
A loan is labelled non-performing when a borrower has not made a scheduled repayment in more than 30 days.
“Our non-performing loan ration was at 0.36 percent in December last year and has increased to 1.36 percent as of last month,” he added.
Key events for the company during the quarter was highlighted as Kookmin Bank (a leading commercial bank in South Korea) successfully acquired 70 percent of total shares and became the new and largest majority of PRASAC shareholders.
PRASAC successfully closed its bond issuance of 127.2 billion riels ($31.8 million).
It was the largest fund raising through the capital market in Cambodia.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.
