ELK-Desa half year profit before tax increases 13%
Focus Malaysia 20 Nov 2019 14:51

ELK-Desa Resources Berhad (Stock Code: 5228/Sector: Finance), a non-bank lender focused in the used-car segment, today announced its financial results for the second quarter ended 30 September 2019.

During the quarter under review, the Group registered an 11% jump in profit before tax to RM12.83 million compared to RM11.59 million in the corresponding quarter a year ago. This increase came on the back of higher revenue of RM36.62 million compared to RM31 million last year.

The Group’s revenue and profit before tax increase were due to the improved performance in its hire purchase portfolio for the quarter under review.  

On a cumulative perspective, the Group registered a profit before tax of RM25.11 million for the first six months of its financial year ending 31 March 2019. This marked an increase of 13% from the profit before tax of RM22.31 million registered in the first six months of last year. Revenue was also 20% higher at RM71.82 million compared to RM59.82 million a year ago.

As at 30 September 2019, the Group’s hire purchase receivables grew by 27% to RM553.77 million from RM435.26 million last year. As a result, hire purchase revenue rose by 22% to RM49.74 million compared to RM40.70 million last year. Profit before tax for the division was also 11% higher at RM24.27 million compared to RM21.87 million.

Impairment allowance increased by 30% to RM4.61 million while credit loss charge increased slightly from 0.81% to 0.83%. The marginal increase in credit loss charge was a reflection of the stable economic environment during the financial period under review and the Group's committed efforts in credit recovery.

The Board of Directors has declared a single tier interim dividend of 3.50 sen per share (Q2 FY2019: 3.50 sen) in respect of the current financial year ending 31 March 2020. The dividend will be paid on 15 January 2020 to the shareholders whose name appear in the record of depositors of the Company as at 2 January 2020.

Teoh Seng Hee, the Executive Director and Chief Financial Officer of ELK-Desa Resources Berhad, said, “The first half of our financial year continues to see a sustained growth trajectory for ELK-Desa and we are confident of closing out our 2020 financial year on a positive note.”

“Our confidence stem from the stable outlook of key macro-economic indicators like low inflation rate and high employment rate, all of which are important factors that drive the performance of our hire purchase financing business.” Teoh added.

“Moving forward, we are encouraged by the Government’s recently announced budget initiatives to alleviate the rising cost of living, enhance employability of Malaysians and spur economic growth. In particular, we believe that the reduced toll rates and petrol subsidy programme for deserving Malaysians are favorable to our hire purchase customers.” Teoh concluded.

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