Branch expansion helps two firms’ earnings
TWO HIRE-PURCHASE and microfinance operators enjoyed a nice increase in earnings in the first quarter of this year thanks to aggressive branch expansion to enhance lending.
Srisawad Power 1979’s first-quarter net profit surged 51.3 per cent to Bt420.92 million from Bt278.12 million a year ago on higher revenue and better collection management.
According to the company’s filing yesterday to the Stock Exchange of Thailand, its accounts receivable rose to Bt14.8 billion from Bt10.65 billion year on year, while revenue climbed to Bt1.13 billion from Bt814.89 million.
Operating expenses jumped 36.8 per cent because of the expansion, but bad debt and doubtful accounts fell by 17.8 per cent to Bt38.38 million thanks to prudent loan approval and collection management.
Muangthai Leasing reported to the SET that its net profit soared 54.3 per cent to Bt280 million from new loan expansion.
Surat Chayavoradech, assistant managing director, said the company’s revenue zoomed 62.3 per cent to Bt865 million thanks to the growth in branches to 1,114 from 681 in the same quarter last year.
The bigger network drove new loans up 86.4 per cent to Bt6.95 billion.
The company has a higher cost of funds, as it borrowed to support the expansion in loans and branches.
Operating expenses rose 81.0 per cent to Bt449 million from the branch expansion and the increase of provisions to cover mounting bad debt and doubtful accounts.
In the first three months, its |bad debt and doubtful accounts jumped 371.4 per cent to Bt57 |million, while outstanding loans plummeted to Bt14.4 billion from Bt80.7 billion in the same quarter last year.
