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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Asa International Group Plc | LSE:ASAI | London | Ordinary Share | GB00BDFXHW57 | ORD GBP1 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.25 | 0.40% | 62.25 | 59.50 | 65.00 | 65.00 | 65.00 | 65.00 | 6,156 | 16:35:25 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMASAI
RNS Number : 1461X
ASA International Group PLC
26 August 2020
July 2020 business update in response to COVID-19
Amsterdam, 26 August 2020 - ASA International, ("ASA International", the "Company" or the "Group"), one of the world's largest international microfinance institutions, today provides the following update of the impact of COVID-19 on its business operations.
-- The immediate health impact of COVID-19 on the Company's operations remained low.
-- Liquidity has remained stable with approximately USD 110m of unrestricted cash and cash equivalents across the Group on 31 July 2020.
-- Since the end of June 2020, the Group secured approximately USD 8m of new loans from international and local lenders and the current pipeline of funding deals being negotiated totals approximately USD 200m.
-- Despite the challenging operating conditions , collection efficiency in July remained in the mid to high nineties in eight operating countries, which in the aggregate represented more than 70% of the pre-tax profitability of all the Group's country operations in 2019.
-- In view of the uncertain business environment which our clients are facing, disbursements as percentage of collections are gradually increasing, but continued to be lower than collections in many operating countries , with the exception of Ghana, Nigeria, Sierra Leone, Tanzania, Rwanda and Zambia.
-- As a result, the number of clients reduced by 10% to 2.3m, while OLP reduced by 13% ( 10 % in constant currency) to USD 408.5m YTD on 31 July 2020.
-- Selected moratoriums on loan repayments ("Moratorium") provide clients most affected by the COVID-19 related disruption more time to strengthen their income generating capacity, but, in the long run, may weaken the credit quality of outstanding loans and thereby increase operational and financial risks.
-- The aggregate Moratorium amounts to USD 33.1m, which represents 8% of the Group's outstanding loan portfolio ("OLP") and is primarily concentrated in India (37% of the aggregate Moratorium), the Philippines (28%), Kenya (15%) and Uganda (10%).
-- The primary causes for the substantial Moratorium amount are: (i) long 10-12 weeks lockdowns in India, the Philippines, and Uganda; (ii) long-term closure of our clients' regular trading market places in Kenya and Uganda; and (iii) a government sanctioned general moratorium on the repayment of loan instalments upon a client's request in India.
-- The Group's 2020 half - year results, including an appropriate provision to reflect the impact of Covid-19, are scheduled to be announced on 22 September, by which time the government sanctioned moratorium on loan repayments in India will have been expired for 21 days. This should provide the Company, particularly in India, with more valuable information about the collection efficiency and the quality of the Group's loan portfolio.
Health impact of COVID-19 on our communities
-- As of 31 July 2020, the immediate health impact of COVID-19 on the Company's operations remain s low with 18 of our 12,535 staff members confirmed as infected , but with no deaths . The number of confirmed infections amongst our 2.3m clients increased to 176, resulting in 9 deaths until now .
-- While the infection rate in our operating countries continues to increase , t he speed of growth and the absolute number of confirmed infections and , in particular, the number of deaths remain relatively low in comparison to Europe and the U.S.A. This is illustrated by the relatively few deaths in each of our operating countries as percentage of the size of the population which ranges between zero to 25 deaths per million population in our operating countries compared to 108 to 846 deaths per million in the U.S.A. and the wealthiest European countries.
Funding
-- Unrestricted cash and cash equivalents remained stable at approximately USD 110m on 31 July 2020.
-- The Company secured approximately USD 8m of new loans from local and international lenders since 29 June 2020.
-- About 70% of the Company's USD 200m pipeline of future wholesale loans are supported by (agreed) term sheets and/or draft loan documentation, which is up 10% compared to 29 June 2020; the terms and conditions of the remaining 30% are being negotiated with lenders.
Hot Features
Premium
Collection efficiency (1)
Country 19-26 27 25-30 31 7 14 21 28 5 12 19 26
April April-3 May May-6 June-13 June-20 June-27 June-4 July-11 July-18 July-25 July-31
May June June June June July July July July July
Nil
India (2) Nil Nil 19% 37% 40% 47% 50% 53% 49% 41% 37%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
Pakistan 55% 60% 90% 93% 95% 92% 94% 95% 97% 96% 96% 95%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
93%
Sri Lanka 1% 1% 40% 69% 66% (4) 91% 95% 91% 90% 93% 94%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
Myanmar Nil Nil 89% 91% 95% 95% 97% 95% 96% 96% 97% 97%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
The
Philippines Nil Nil 28% 59% 64% 66% 69% 74% 71% 72% 73% 74%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
Ghana 100% 95% 102% 100% 99% 100% 100% 100% 99% 99% 99% 101%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
Nil-Eid
Nigeria Nil Nil (3) 92% 93% 94% 94% 95% 91% 91% 89% 94%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
Sierra
Leone 87% 99% 96% 94% 94% 95% 98% 101% 97% 95% 100% 102%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
Kenya Nil Nil 77% 70% 71% 76% 88% 88% 78% 73% 72% 75%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
Tanzania Nil Nil 94% 97% 98% 98% 98% 99% 99% 99% 99% 99%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
Uganda Nil Nil Nil Nil 22% 33% 40% 41% 46% 44% 47% 53%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
Rwanda Nil Nil 66% 63% 77% 79% 83% 82% 84% 82% 88% 89%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
Zambia 87% 99% 98% 97% 98% 98% 98% 99% 98% 98% 99% 99%
------ -------- -------- ------ -------- -------- -------- ------- -------- -------- -------- --------
(1) Collection efficiency refers to actual collections from
clients divided by expected collections for the period; since
any moratorium on the repayment of loans are only granted to
clients after the end of the month, the collection efficiency
is not affected by the grant of such moratorium;
(2) Nil implies no collections during the period
(3) Nil - Eid refers to no branch operations due to official
Eid holidays
(4) Sri Lanka improved due to a write-off of overdue loans
caused by the Government imposed debt relief program and Easter
Sunday Bombings
-- Collection efficiency across the Group continues to increase with 8 out of 13 operating countries reporting collection efficiency at the mid or high nineties on 31 July 2020.
-- Collection efficiency remains relatively low in: (i) India, due to (a) clients making use of the government-imposed moratorium; (b) the imposition of recent targeted lockdowns in Bihar, West Bengal and Assam caused by increases in COVID-19 cases, and (c) flooding in West Bengal and parts of Assam; (ii) the Philippines, where our clients' business activities have been substantially disrupted by (a) a ten-week country-wide lockdown, and (b) ongoing disruption with regional and/or district lockdowns; (iii) Uganda, where our clients also faced a long ten-week lockdown and ongoing restrictions on the movement of people; and (iv) Kenya, where many market places where our clients traditionally used to trade, remain closed or severely restricted.
-- Once collection efficiency reaches more than 90% and disbursement of repeat and/or new loans continues , in our experience the repayment discipline of all clients in a lending group tend s to improve.
-- In many of our operating countries, the Group started early with increased lending to clients, which generated a positive response and helped in stabilizing our operations.
Disbursements vs collections of loans (5)
-- With the business environment gradually improving, weekly disbursements of fresh loans continue to gradually increase in amount and as a percentage of weekly collections.
Country 7 June-13 14 June-20 21 June-27 28 June-4 5 July-11 12 July-18 19 July-25 26 July-31
June June June July July July July July (6)
India Nil 1% 8% 12% 25% 37% 74% 61%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
Pakistan 60% 60% 60% 68% 79% 82% 87% 88%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
Sri Lanka 12% 43% 52% 27% 101% 57% 40% 71%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
Myanmar 61% 68% 71% 68% 76% 80% 95% 62%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
The
Philippines 19% 40% 61% 46% 80% 69% 70% 73%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
Ghana 109% 105% 105% 128% 130% 107% 110% 116%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
Nigeria 70% 82% 84% 78% 102% 103% 116% 86%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
Sierra Leone 85% 91% 99% 66% 122% 101% 113% 93%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
Kenya 63% 56% 67% 70% 74% 84% 67% 76%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
Tanzania 52% 65% 70% 76% 83% 118% 123% 113%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
Uganda Nil Nil Nil 1% 15% 46% 51% 32%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
Rwanda 106% 113% 101% 92% 98% 52% 98% 108%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
Zambia 91% 113% 89% 68% 199% 160% 176% 157%
---------- ----------- ----------- ---------- ---------- ----------- ----------- -----------
(5) Disbursements vs collections refers to actual loan disbursements
made to clients divided by total loans collected from clients
in the period
(6) Slowdown of branch operations due to official EID holidays
in latter part of this week;
Development of Clients and Outstanding Loan Portfolio
-- As a result of (i) the lockdowns, which effectively froze the outstanding loan portfolio ("OLP"), (ii) the challenging business environment our clients faced during and after the lockdowns, and (iii) the Company's initial policy to limit or reduce the amount of fresh loan disbursements immediately following the end of the lockdowns, the Group's number of clients reduced by 9.7% from 2.5m by year-end 2019 to 2.3m as of 31 July 2020, and OLP reduced by 13% (10% in constant currency) YTD from USD 467m by year-end 2019 to USD 408m as of 31 July 2020.
Clients OLP in USDm
------------------------- -------------------------
Delta Delta
Countr y Dec/19 Jul/20 Delta Dec/19 Jul/20 USD CC
India 732 713 -3% 181,9 167,3 -8% -4%
Pakistan 439 405 -8% 62,5 54,0 -14% -8%
Sri Lanka 63 54 -14% 9,4 8,4 -11% -9%
Myanmar 152 136 -10% 31,5 30,1 -5% -14%
The Philippines 340 297 -13% 52,7 46,5 -12% -18%
Ghana 165 141 -15% 41,6 35,7 -14% -15%
Nigeria 260 213 -18% 32,7 23,8 -27% -30%
Sierra Leone 34 30 -11% 2,9 3,2 11% 10%
Kenya 101 79 -22% 17,6 11,9 -32% -40%
Tanzania 123 100 -18% 20,5 16,1 -22% -26%
Uganda 101 93 -8% 10,4 8,5 -19% -22%
Rwanda 21 19 -7% 3,0 2,7 -9% -8%
Zambia 2 4 77% 0,2 0,3 73% 56%
Total 2.533 2.286 -10% 467 408 -13%
Selected moratorium on loan repayments
-- In view of the challenging circumstances our clients face due to the disruption caused by COVID-19, the Company established a policy to provide clients with more time to pay their regular loan installments by offering, a temporary moratorium on the repayment of loan installments.
-- Providing a moratorium on loan repayments is usually only granted under exceptional circumstances, such as major natural calamities like major floods, earthquakes, and droughts.
-- It is the Company's policy to gradually reduce and ultimately eliminate any such temporary moratorium on loan repayments.
Clients under moratorium As %
Countries March April May June July of Clients
India 0 0 0 182,318 181,878 25%
Pakistan 0 0 0 0 0 0%
Sri Lanka 0 0 0 37,891 9,002 17%
Myanmar 2,307 2,101 35,056 12,394 7,876 6%
The Philippines 1,297 0 57,130 145,086 65,405 22%
Ghana 0 0 0 0 0 0%
Nigeria 0 0 4,042 10,523 9,763 5%
Sierra Leone 0 91 1,225 1,336 1,178 4%
Kenya 20,453 17,366 9,660 7,778 26,697 34%
Tanzania 0 194 5,323 4,162 0 0%
Uganda 8,269 0 0 75,360 59,563 64%
Rwanda 436 0 7,746 7,886 4,703 24%
Zambia 0 0 0 0 0 0%
Total 32,762 19,752 120,182 484,734 366,065 16%
Moratorium amounts (in USD thousands) As %
As % of
Countries March April May June July Total of OLP Total Moratorium
India 0 0 0 5,831 5,315 11,146 7% 34%
Pakistan 0 0 0 0 0 0 0% 0%
Sri Lanka 0 0 0 1,154 248 1,402 17% 4%
Myanmar 40 41 692 328 239 1,341 4% 4%
The Philippines 15 0 917 6,179 2,087 9,198 20% 28%
Ghana 0 0 0 0 0 0 0% 0%
Nigeria 0 0 135 459 425 1,019 4% 3%
Sierra Leone 0 1 11 20 21 52 2% 0%
Kenya 682 436 2,167 737 814 4,837 41% 15%
Tanzania 0 5 146 114 0 266 2% 1%
Uganda 77 0 0 1,727 1,562 3,366 40% 10%
Rwanda 5 0 165 224 128 522 19% 2%
Zambia 0 0 0 0 0 0 0% 0%
Total 819 484 4,233 16,773 10,840 33,148 8% 100%
As of 31 July 2020, total moratorium on loan repayments granted to clients amounted to USD 33.1m, which represents 8% of the Group's OLP.
-- While this increases the risk profile of the Group in the short term, various factors and developments provide confidence that the large majority of loans under moratorium will be repaid over time.
-- The aggregate number of clients benefiting from a moratorium and the total amount of moratorium granted has gone down from 485K and USD 16.7m in June to 366K and USD 10.8m, respectively, in July. It is expected that this trend line will continue.
-- In particular, the moratorium granted to clients in the Philippines went down from 145K clients and USD 6.2m by the end of June to 65K clients and USD 2.1m at the end of July.
-- There has been no need to provide a moratorium to clients in Pakistan and Ghana, which are the Group's two most profitable operations.
-- India's moratorium amounts to USD 11.1m, which represents 34% of the total moratorium amount and is artificially high, because the Government allowed each client to opt for a moratorium at no additional (reputational) cost to the client until the end of August this year.
-- The strength and influence of the credit bureau in India, where each microfinance loan is required to be registered, will be an important disciplinary factor for Indian clients to remain current on their loans.
-- The general view of the market is that most of the Company's and other microfinance clients are not distressed and unable or unwilling to repay their loans. The economic disruption of COVID-19 has reduced the income generating activities of many of the Group's clients in the short term, but, while clients are cautious, their medium-term prospects for generating a satisfactory income remain good, particularly when the business environment continues to improve.
Enquiries:
ASA International Group plc
Investor Relations
+31 6 2030 0139
Véronique Schyns vschyns@asa-international.com
About ASA International Group plc
ASA International is one of the world's largest international microfinance institutions, with a strong commitment to financial inclusion and socioeconomic progress. The company provides small, socially responsible loans to low-income, financially underserved entrepreneurs, predominantly women, across South Asia, South East Asia, West and East Africa.
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