DURBAN - Finbond Group was expecting its earnings for the six months to the end August to decline as a result of the transition of South African Social Security Agency (Sassa) customers to the new SA Post Office card.
In a trading update on Friday, the group said basic and headline earnings per share were expected to fall to between 5.5cents and 4.4c a share compared with 10.9c reported last year, representing a percentage decrease of 50 to 60percent.
“These poor results were due to the transition of Sassa customers to the new post office card, which occurred in the second six months last year.
"The timing of the Sassa transition and the fact that we were impacted in the second six months of last year and the subsequent recovery in the first six months of the current year has a significant impact on the comparability of the current interim period ending August 2019 compared to the corresponding interim period ending August 2018,” the group said.
It said the Sassa transition was only beginning to be felt in August last year, and South African operations had benefited from good Sassa sales performance for the first six months of last year.
“To illustrate, the total number of Sassa loans sold for the first six months of the current year decreased by 94.6percent to 8655 compared with 160910 for the corresponding period last year,” the group said.
However, it noted that for the second half of the current year, the South African operations outlook was significantly more positive than the second six months of last year when the worst of the Sassa impact was felt.
The group said the developments in South Africa didn’t affect its operations in North America that contributed in excess of 97percent of headline earnings during the period.
Despite the poor conditions in South Africa, the group said its total assets climbed 12.9percent to R4.3billion, up from R3.81bn compared to last year. Its cash and cash equivalents rose by 25.6percent to R969.7million and interest income increased by 15.1percent to R937.9m.
The value of loans advanced increased by 9.1percent to R2.87bn and cash received from customers increased by 3.2percent to R3.78bn.
Finbond will release its results on October 31.
Its shares closed unchanged at R3.24 on the JSE on Friday.