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Hong Leong Finance posts 35.7% fall in Q3 net profit to S$23.6m

NET profit for Hong Leong Finance's third quarter ended Sept 30 dived 35.7 per cent to S$23.6 million from S$36.7 million a year ago, it reported in a Singapore Exchange filing on Wednesday.

The profit declines came on the back of a record high performance in the year-ago period, Hong Leong Finance said. The net attributable profits included a net recovery of doubtful debts and other financial assets of S$5.7 million and S$7.4 million respectively.

Interest income and hiring charges totalled S$102.4 million, up 14.3 per cent from S$89.6 million in Q3 2018.

Interest expense rose 46 per cent to S$51 million. Net interest income fell 6.1 per cent to S$51.3 million, driven by higher cost of funds on a higher deposit base to support loan growth.

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Net interest margin declined by 21 basis points (bps).

Earnings per share was 21.12 Singapore cents, down from 32.9 cents a year ago.

For the nine months ended Sept 30, net profit shrank 17.4 per cent to S$76.1 million, while interest income and hiring charges came to S$295.6 million, up 14.9 per cent.

Interest expense rose 43.4 per cent to S$141.9 million, and net interest income edged down 2.9 per cent to S$153.7 million. Net interest margin was down by 13 bps.

Earnings per share was 22.74 cents, compared with 27.55 cents in the corresponding period of the previous year.

On Sept 11, Hong Leong Finance paid out an interim dividend of five cents per share that had been declared in the previous quarter. No dividend was declared for the period under review, as it is not the board's practice to declare further interim dividends for the third quarter of the financial year.

Net loan assets stood at S$11.3 billion as at Sept 30. Net asset value per share was S$4.22 as at Sept 30.

Hong Leong Finance shares closed down one Singapore cent or 0.38 per cent to S$2.64 on Wednesday before the results were announced.