July 18, 2022

Dolla Financial Services Limited (DOLLA) for the six months ended June 30, 2022, reported net interest income of $271.76 million, 218% higher than the $85.57 million booked in 2021. For the second quarter (Q2), interest income closed at $143.13 million (2021: $41.85 million). Management noted that “this increase was driven by the expansion in our loan portfolio as is reflected in our balance sheet.”

Interest income for the period rose 176% year over year to $298.31 million compared to $108.15 million in 2021, while interest expense amounted to $26.55 million relative to $22.58 million for the corresponding period in 2021.

Provision for Expected Credit Losses (ECL) for the period amount to $7.90 million (2021: $9.30 million). For Q2, Provision for ECL amounted to $3.06 million (2021: $6.81 million)
Management noted that “the reduction in ECL is primarily due to the changes in the company’s loan portfolio, proactive management of delinquency and a deliberate effort in employing sound risk management to loans.”

As a result, net interest income after loan impairment for the six months and Q2 amounted to $263.86 million (2021: $76.27 million) and $140.07 million (2021: $35.04 million) respectively.

Non-Interest income for the period:

• Fees and Other Income amounted to $3.77 million (2021: $21.71 million)
• Foreign Exchange Gains totalled $1.27 million (2021: losses of $38,000)

Consequently, total net interest income and other revenue stood at $268.91 million (97.94 million), while for Q2, it stood at $143.80 million (2021: $46.35 million)

Administrative Expenses rose 96% year over year to $136.58 million (2021: $69.64 million). For Q2, it stood at $77.36 million (2021: $35.09 million). Management noted that “the increase in expenses was primarily attributed to an increase in staff costs as we continue to invest in our people, processes and our delivery to our customers.”

This resulted in profit before taxation of $132.33 million (2021: $28.30 million).

After accounting for taxation of $13.19 million (2021: $7.51 million), net profit for the six months totalled $119.14 million, an increase of 473% compared to $20.79 million for the corresponding period of 2021. For the quarter, net profit closed at $59.29 million (2021: $9.10 million).

Total Comprehensive Income for the period was $114.04 million (2021: $20.80 million).

Earnings per share (EPS) for the six months ended June 30, 2022 totalled $0.05 relative to $0.01 booked for the comparable period of 2021. For the quarter, EPS closed at $0.02 (2021: $0.004). The trailing twelve-month EPS amounted to $0.09. The number of shares used in our calculations amounted to 2,500,000,000 units. Notably, DOLLA stock price closed the trading period on July 15, 2022 at a price of $2.81 with a corresponding P/E ratio of 30.82 times.

Balance Sheet at a glance:

As at June 30, 2022, the Company’s total asset base amounted to $1.19 billion (2021: $574.71 million). The increase was mainly due to ‘Loans, Net of Provision for Credit Losses’ which closed at $1.05 billion (2021: $378.78 million). However, the movement was tempered by a decline in ‘Cash and Cash Equivalents’ to $81.10 million (2021: $145.96 million).

Management noted that “the significant increase in loan disbursements during the period contributed to management’s concerted effort to grow the loan portfolio thus the increase in total loan portfolio. As at June 30, 2022, business loans accounted for 74% of the total loan portfolio, with personal loans accounting for the remaining 26%. Furthermore, secured loans represented 71% of the total loan portfolio, while unsecured loans accounted for the remaining 29%.”

Equity attributable to stockholders of parent amounted to $653.54 billion (2021: $29.95 million) with book value per share amounting to $0.26 (2021: $0.01). Management noted that “the increase is primarily attributable to the $250.0 million received from the issuance of shares from the IPO in June 2022 as well as the increase in profits throughout the quarter.”

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