ASA International Group PLC on Wednesday said that it swung to a net loss for the first half of 2020 after substantial disruption from the coronavirus pandemic, but said that it expects to return to profitability in the second half.
The microfinance company providing loans to low-income female entrepreneurs throughout Asia and Africa reported a net loss of $1.5 million, compared with a net profit of $16.1 million a year earlier.
The company attributed the latest result to a modification loss of $13.3 million on interest income due to the extension of loan terms and a moratorium on payments, shifting recognition of interest income to the second half of the year. The company also cited a $8.3 million provision for expected credit losses in the half, up from $1.2 million a year earlier.
ASA International said that it was positive about the company’s expected operational and financial performance in the second half, and that unless coronavirus-related disruption worsens, it expects to return to normal levels of profitability in the second half.
The company forecast net profit of around $10 million for 2020, and said as of Sept. 30 it has a liquidity of $110 million and a funding pipeline of more than $200 million.
The company said it plans to reinstate dividends of 30% of earnings for the full year.
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