ELK-Desa seeks larger share of HP market
Stephanie Jacob | 25 Jan 2019 00:30
ELK-Desa Resources Bhd’s niche focus on hire-purchase financing for the used car market has been paying off. The hire purchase segment contributed 98% to the company’s earnings for FY18 ended March 31, 2018.
The segment continues to be the significant contributor to the company’s performance in the first half of FY19 (1HFY19) ended Sept 30, 2018. The company notched topline growth of 18.4% to RM59.82 mil from RM50.54 mil in 1HFY18. This led to a 51.8% year-on-year increase in net profit to RM16.7 mil from RM11 mil over the same period.
The improved performance was driven by the increase in hire purchase portfolio and a significantly lower impairment allowance for the first half of FY19, ELK-Desa chief financial officer Henry Teoh Seng Hee tells FocusM. “As of Sept 30, 2018, hire purchase receivables grew by 22% to RM435.26 mil from RM355.55 mil last year.”
He adds that this contributed to an increase in hire purchase revenue. For the first six months of its current financial year, the hire purchase financing division’s revenue had already increased by 15% to RM40.70 mil from RM35.31 mil last year. This also led to an increase in pre-tax profit for the division, which rose by 47% yoy to RM21.87 mil from RM14.90 mil.
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