Izwe loans posts K51M profit
IZWE Loans Zambia Plc has reported an after-tax profit of K50.8 million for the first half of this year compared to K23.7 million the previous year.
This represented a 113.5 per cent year on year increase, according to the Company’s abridged financial results for half year ended June 30, 2021 posted on the Lusaka Securities Exchange (LuSE)
Giving the financial highlights, IZWE chief Executive Officer Kulusu Chisola said the gross revenue amounted to K168.2 million, slightly decreasing by two per cent when compared with prior year.
Mr Chisola explained that the reduction in revenue was primarily attributed to the reduction in lending rates offered to customers when compared to the prior year.
“Interest cost for the period was K37.8 million, reducing by 33 per cent as our liabilities declined in line with our increased organic collections. As a result, Earnings Per
Share (EPS) increased year on year from K0.23 to K0.49,” he said.
Mr Chisola indicated that the strategic changes made by management in the prior year resulted in positive cost base restructuring, which largely countered the impact of costpush inflation in 2021.
He said operating expenses increased by 9.1 per cent from the prior year expenditure of K45.7 million to K50.2
million in June 2021, and this was as a result of sales driven variable costs, having recorded a higher level of trading activities in the first half of 2021.
“Impairment expenses for the period was a release of impairment provisions which resulted in a credit of K1.5 million compared to K0.4 million in 2020 due to the unwinding of Government arrears,” Mr Chisola said.
He indicated that foreign exchange losses decreased toK1.0 million compared to K19.6 million in 2020, driven by the restructuring of foreign currency exposure which included the replacement of foreign currency loans with local currency loans.
Based on sector considerations in the
12-month period to June 2021, management took a decision in the second half of 2020 to tighten credit policies by introducing more conservative credit evaluation criteria. Mr Chisola said this decision resulted in the decrease of the net loans and advances book by three per cent from K664.5 million in June 2020 to K642.9 million in June 2021.
Despite this overall decrease between 2020 and 2021, the loan book has been growing steadily from January 2021 to date on the back of a more positive sentiment on stability returning to the sector. “Borrowings and corporate notes reduced to K553.6 million from K627.5 million in 2020 as some contractual facility repayments were concluded,” he said.