IFS Capital Starts First Quarter With A Lackluster Performance

IFS Capital (SGX: I49) is a financial company that provide capital raising services for clients. It also provides insurances through its subsidiary, ECICS Ltd. The company is majority owned by Mr. Lim Hua Min though his 40.4% indirect interest. Mr. Lim is more well-known as the chairman of PhillipCapital Group, which is the largest retail stockbrokerage in Singapore. The company announced its first quarter result on 9th May 2014.

IFS Capital operates a regional business, with operation in Singapore, Thailand, Malaysia and Indonesia. The factoring and loan segment is its largest business.

Operating Result

The company achieved a net interest income of S$ 4.4million for the quarter, 14.3% lower than last year.  Together with its other businesses, it recorded an operating income of S$ 8.6million which is 2% lower than last year. Its insurance and other non-interest income enjoyed a good growth this quarter to offset the drop in interest earnings. The net profit for its shareholders took a bigger hit, ending the quarter with a 38% drop year on year to $ 870thousand only. This was mainly due to higher staff costs and an increase in loan and investment impairments. Allowance for loan losses and impairment of investments increased 11.6% year on year to S$ 1.59million.

On the balance sheet front, the leverage ratio of the company dropped slightly from 2.9 times to 2.84 times. However, the management warned that due to the uncertainty and challenges now in Thailand, which is one of its main markets, the group might face a challenging environment going forward. The company will try to grow and focus more into the Indonesia and Malaysia market while maintaining the business in Singapore.

The company ended the quarter with earnings per share of 0.58cents which is a 37.6% lower than last year. However, it has a net asset value per share of 85.6cents. Currently the group ended the trade on 9th May 2014 at S$ 0.39. This marks a Price to Book ratio of 0.46 times.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.