June 2024 Trading and Business Update

About this update from Asa International Group Plc

Press release   ASA International Group plc June 2024 Trading and Business update Improved business performance sustained and expected to continue through H2 2024 Amsterdam, The Netherlands, 17 July 2024 - ASA International, ('ASA International', the 'Company' or the 'Group'), one of the world's largest international microfinance institutions, today provides the following update on its business operations as of 30 June 2024. The Company has seen sustained momentum in its business performance in H1 2024 along with continued improvement in the Group's operating environment. The information contained within this announcement is deemed by the Company to constitute inside information as stipulated by the Market Abuse Regulation (EU) No.596/2014, as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain. June 2024 Trading update highlights ·    We have seen a continued improvement in the operating environment and business performance of our operating entities since March 2024. This is in line with the guidance we provided in the 2023 full year results as announced on 23 April 2024, and we expect this momentum to continue in H2 2024. ·    The Group's Gross OLP increased to USD 398 million at the end of June 2024 from USD 377 million at the end of December 2023. The growth in Gross OLP in USD terms was driven by improved performances in Pakistan, Ghana, Tanzania, and Kenya. ·    The unrestricted cash and cash equivalents position of the Group remained at a healthy level of USD 68 million as at 30 June 2024, compared to USD 48 million as at 31 December 2023. ·    PAR>30 for the Group's operating subsidiaries, excluding off-book portfolio, remained broadly stable at 2.5% at the end of June 2024 compared to 2.1% at the end of December 2023. PAR>30 remains excellent below 1% in our operations in Ghana, Kenya and Uganda. ·    The Company continued to have a strong funding pipeline of USD 174 million fresh loans as at end of June 2024 (31 December 2023: USD 152 million) to support growth of operations. These can be accessed in the short to medium term. The total amount of new debt raised in the year to 30 June 2024 amounted to USD 101 million. Outlook The outlook for 2024 remains positive with continued improved business performance expected for our operations on the back of the momentum from March 2024, and continuing high demand for loans from our clients. This is expected to result in an improved trading performance for 2024 (versus last year), which should be ahead of current market consensus for the current financial year*.  However, as previously announced at the time of our FY 2023 results, inflation and related FX movements will continue to have an impact on the final outcome of the Group's operating subsidiaries' performances in FY 2024. In H1 2024, the currencies in most operating markets have been relatively stable vis a vis the USD when comparing 30 June 2024 with 31 December 2023, with the exception of Myanmar, Ghana and Nigeria. The reported net income for the Group will also depend on which countries will be classified as hyperinflationary at the end of 2024. Based on the latest preliminary inflation projections, it is still expected that the accounting for hyperinflation will be applicable for Ghana and Sierra Leone in 2024. Pakistan and Nigeria remain on the IMF watchlist. * Market consensus on reported basis as at 17 July 2024 is pre-tax income of USD 36.9 million and net income of USD 15.5 million. June 2024 Business update highlights ·     The Group's Gross OLP increased to USD 398 million (4.3% higher than in March 2024 and 15% higher than at 30 June 2023) . ·    All operating subsidiaries achieved collection efficiency of more than 90% with 12 countries achieving more than 95%. ·     Collection efficiency in India remained broadly stable at 97% in June 2024 compared to 98% in March 2024 . The intentional decrease in our own portfolio in India has slowed down while the business continues to grow the off-book BC portfolio in India. This approach is designed to retain good clients. ·    PAR>30 for the Group, including off-book loans and excluding loans overdue for more than 365 days, slightly increased to 2.4% in June 2024 (March 2024: 1.8%). ·    Excluding all loans which have been overdue for more than 180 days and, as a result, have been fully provided for, PAR>30 remained broadly stable at 1.5% in June 2024 (March 2024: 1.1%). ·       Disbursements as a percentage of collections exceeded 100% in nine countries.   Collection efficiency until 30 June 2024 (1)   Countries Jan/24 Feb/24 Mar/24 Apr/24 May/24 Jun/24 Pakistan 100% 100% 99% 99% 99% 98% India (total) 95% 97% 98% 99% 98% 97% Sri Lanka 96% 96% 96% 95% 95% 95% The Philippines 98% 98% 99% 99% 98% 98% Myanmar 100% 100% 100% 100% 100% 100% Ghana 100% 100% 100% 100% 100% 100% Nigeria 94% 94% 93% 93% 94% 94% Sierra Leone 97% 97% 97% 97% 96% 96% Tanzania 99% 99% 99% 99% 99% 99% Kenya 100% 100% 100% 100% 100% 100% Uganda 100% 100% 100% 100% 100% 100% Rwanda 96% 95% 95% 95% 96% 97% Zambia 99% 99% 99% 98% 98% 98%  (1) Collection efficiency refers to actual collections from clients divided by realisable collections for the period. It is calculated as follows: the sum of actual regular collections, actual overdue collections and actual advance payments divided by the sum of realisable regular collections, actual overdue collections and actual advance payments. Under this definition collection efficiency cannot exceed 100%. ·    Collection efficiency remained stable at high levels in most of our operating countries during June 2024 compared to March 2024. ·    Collection efficiency in India remained broadly stable at 97% in June 2024 compared to 98% in March 2024. ·    Although market conditions in both Myanmar and Nigeria remained challenging, collection efficiency remained stable. Loan portfolio quality up to and including June 2024 (2, 3)    Gross OLP (in USDm)    Non-overdue loans    PAR>30 less PAR>180   Apr/24 May/24 Jun/24   Apr/24 May/24 Jun/24   Apr/24 May/24 Jun/24 Pakistan         72            74           79 99.6% 97.3% 93.3%   0.1% 0.3% 0.7% India (total)         51            52           51 79.6% 80.5% 80.2%   2.2% 4.0% 4.2% Sri Lanka           5              5             5 91.5% 90.8% 90.7%   3.4% 3.6% 3.9% The Philippines         57            57           58 94.7% 93.9% 94.1%   2.1% 2.1% 2.2% Myanmar         23            23           20 93.2% 93.4% 93.7%   0.2% 0.1% 0.1% Ghana         45            46           48 99.2% 99.3% 99.6%   0.1% 0.1% 0.1% Nigeria           9              9             9 77.5% 78.8% 79.8%   6.0% 5.7% 5.4% Sierra Leone           5              6             5 91.6% 90.4% 91.3%   2.8% 3.0% 3.9% Tanzania         66            67           68 98.2% 98.1% 98.3%   0.7% 0.8% 0.8% Kenya         30            32           32 99.6% 99.6% 99.6%   0.1% 0.1% 0.1% Uganda         14            14           15 98.9% 99.0% 99.0%   0.2% 0.2% 0.1% Rwanda           4              4             4 89.1% 89.4% 89.7%   4.4% 4.2% 3.8% Zambia           3              3             3 94.0% 93.5% 93.8%   1.4% 1.9% 2.2% Group       385          393         398   94.6% 94.2% 93.7%   1.1% 1.3% 1.5%        PAR>30    PAR>90    PAR>180     Apr/24 May/24 Jun/24   Apr/24 May/24 Jun/24   Apr/24 May/24 Jun/24   Pakistan 0.3% 0.3% 1.2%   0.3% 0.2% 0.8%   0.2% 0.0% 0.5%   India (total) 5.2% 5.8% 5.8%   4.1% 3.1% 3.0%   3.0% 1.8% 1.6%   Sri Lanka 5.1% 5.3% 5.6%   3.0% 3.2% 3.3%   1.6% 1.7% 1.8%   The Philippines 3.9% 4.3% 4.5%   3.0% 3.3% 3.4%   1.8% 2.2% 2.3%   Myanmar 0.2% 0.3% 0.3%   0.2% 0.2% 0.2%   0.0% 0.1% 0.1%   Ghana 0.2% 0.2% 0.2%   0.1% 0.1% 0.1%   0.1% 0.1% 0.1%   Nigeria 11.6% 9.9% 9.0%   8.6% 7.4% 7.0%   5.6% 4.2% 3.6%   Sierra Leone 4.6% 4.8% 5.7%   3.4% 3.4% 3.7%   1.8% 1.8% 1.8%   Tanzania 1.2% 1.3% 1.3%   0.8% 0.9% 0.9%   0.5% 0.5% 0.5%   Kenya 0.2% 0.2% 0.2%   0.2% 0.2% 0.2%   0.1% 0.1% 0.1%   Uganda 0.7% 0.5% 0.4%   0.6% 0.5% 0.4%   0.5% 0.4% 0.3%   Rwanda 7.5% 7.3% 6.9%   5.4% 5.4% 5.3%   3.1% 3.1% 3.0%   Zambia 2.6% 3.0% 3.2%   1.8% 1.9% 1.9%   1.1% 1.1% 1.0%   Group 2.1% 2.2% 2.4%   1.6% 1.5% 1.6%   1.1% 0.9% 0.9%   (2)   PAR>x is the percentage of outstanding customer loans with at least one instalment payment overdue x days, excluding loans more than 365 days overdue, to Gross OLP including off-book loans. Loans overdue more than 365 days now comprise 3.1% of the Gross OLP. (3)   The table "PAR>30 less PAR>180" shows the percentage of outstanding client loans with a PAR greater than 30 days, less those loans which have been fully provided for. ·    Gross OLP in India slightly increased to USD 51 million (3% higher than in March 2024 and 3% higher than in June 2023). ·    Gross OLP in Myanmar decreased to USD 20 million as at 30 June 2024 from USD 23 million as at 31 May 2024, primarily due to sharp depreciation of the MMK against the USD. ·    PAR>30 for the Group, including off-book loans and excluding loans overdue for more than 365 days, slightly increased to 2.4% in June 2024. ·    The off-book portfolio in India consists of IDFC of USD 9.4 million, Fincare of USD 5.9 million and the Jana portfolio of USD 30.7 million. The off-book DA portfolio amounts to USD 1.0 million. Disbursements vs collections of loans until 30 June 2024 (4)   Countries Jan/24 Feb/24 Mar/24 Apr/24 May/24 Jun/24 Pakistan 106% 79% 84% 121% 87% 97% India (total) 127% 122% 118% 128% 100% 51% Sri Lanka 91% 133% 119% 79% 99% 87% The Philippines 103% 109% 107% 108% 104% 102% Myanmar 109% 107% 113% 92% 117% 118% Ghana 86% 105% 98% 106% 132% 129% Nigeria 60% 77% 73% 94% 113% 120% Sierra Leone 96% 119% 130% 101% 110% 85% Tanzania 101% 102% 109% 110% 107% 118% Kenya 118% 115% 115% 119% 114% 101% Uganda 93% 109% 110% 107% 111% 102% Rwanda 77% 96% 110% 119% 118% 122% Zambia 81% 100% 110% 104% 109% 122%  (4) Disbursements vs collections refers to actual loan disbursements made to clients divided by total amounts collected from clients in the period.     ·    Disbursements as a percentage of collections exceeded 100% in nine countries. ·    The decreased percentages in India and Sierra Leone in June 2024 were due to severe weather and natural disasters. These percentages are expected to recover and improve from July 2024. ·    The decreased percentages in Sri Lanka in April to June 2024 were due to funding challenges. These percentages are expected to improve from July as the business in Sri Lanka secures new funding.   Development of Clients and Outstanding Loan Portfolio until 30 June 2024  Clients (in thousands)  Delta  Gross OLP (in USDm)  Delta Countries Jun/23 May/24 Jun/24 Jun/23-Jun/24 May/24-Jun/24 Jun/23 May/24 Jun/24 Jun/23-Jun/24 USD Jun/23-Jun/24 CC (5) May/24- Jun/24 USD Pakistan 608 617 618 2% 0.2% 66           74         79 20% 17% 7% India (total) 207 194 186 -10% -4% 50           52         51 3% 5% -2% Sri Lanka 45 44 42 -6% -3% 4             5           5 6% 5% -2% The Philippines 332 351 352 6% 0.3% 52           57         58 10% 17% 0% Myanmar 98 118 119 22% 1% 18           23         20 13% 34% -13% Ghana 181 186 197 9% 6% 41           46         48 17% 56% 3% Nigeria 163 160 146 -10% -8% 17           9           9 -48% 4% -5% Sierra Leone 35 38 37 6% -1% 5             6           5 14% 35% -4% Tanzania 227 257 258 14% 0.3% 57           67         68 21% 32% 2% Kenya 180 227 238 32% 5% 18           32         32 77% 63% 1% Uganda 106 128 131 24% 3% 12           14         15 26% 27% 3% Rwanda 20 21 21 7% 2% 4             4           4 15% 29% 3% Zambia 23 26 27 18% 2% 4             3           3 -7% 27% 16% Group 2,225 2,365 2,373 7% 0.3% 347 393 398 15% 25.4% 1.3%   (5) Constant currency ('CC') implies conversion of local currency results to USD with the exchange rate from the beginning of the period. ·    The Group's Gross OLP increased to USD 398 million (4.3% higher than in March 2024 and 15% higher than in June 2023). --- The person responsible for the release of this announcement on behalf of the Company for the purposes of MAR is Tanwir Rahman, CFO. Enquiries: ASA International Group plc Investor Relations                                                                                           Mischa Assink                                                                                     ir @asa-international.com   About ASA International Group plc ASA International Group plc (ASAI: LN) 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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