What Caused Mero Microfinance Laghubitta's Net Profit to Decline by 76.96% in the Second Quarter? Look at the Major Financial Highlights
Mon, Feb 6, 2023 12:12 PM on Latest, Financial Analysis, Stock Market,
Mero Microfinance Laghubitta Bittiya Sanstha (MERO) has published its second quarterly report of FY 2079/2080 with a decrease in Net Profit by 76.96%. The company's net profit decreased to Rs. 6.77 crores as compared to Rs. 29.42 crores in the corresponding quarter of the previous year.
The borrowing of the company has decreased to Rs. 8.89 Arba by 14.45% while deposits have increased by slight 5.23% to Rs. 3.59 Arba in the current quarter. Similarly, the company has floated loans of Rs. 15.03 Arba till the second quarter of the fiscal year 2079/2080.
The net interest income of the company has decreased by 35.27% compared to the corresponding quarter of the previous year and stood at Rs. 39.17 crores in Q2. The company incurred interest expenses worth Rs. 75.84 Crores, which has increased by 53.23% as compared to the relevant quarter of the previous year. The rise in interest expenses has also affected the overall business volume for Q2.
Likewise, the company recorded impairment charges worth Rs. 4.54 Crores which subsequently affected the net profit of the company for Q2 of FY 79/80.
Mero Microfinance's paid-up capital stood at Rs. 1.20 Arba with a reserve and surplus of Rs. 48.93 crores till the second quarter of the fiscal year 2079/2080. From the paid-up capital, the company has proposed 10% bonus dividend worth Rs. 12 Crores and 10% cash dividend (including tax) worth Rs. 12 Crores for the fiscal year 2078/79. These bonus dividends are yet to be capitalized by the company.
Its annualized earnings per share (EPS) stood at Rs. 11.30 and net worth per share stood at Rs. 171.19. The company’s non-performing loan stood at 4.96. The company traded at a PE multiple of 67.88 times till this quarter-end.
Major Highlights:
| Particulars (In Rs '000) | Mero Microfinance Laghubitta | ||
| Q2 2079/80 | Q2 2078/79 | Difference | |
| Paid Up Capital | 1,200,000.00 | 1,200,000.00 | 0.00% |
| Retained Earnings | 364,977.57 | 317,789.54 | |
| Reserves & Surplus | 489,312.83 | 464,918.22 | 5.25% |
| Borrowings | 8,890,185.91 | 10,391,531.78 | -14.45% |
| Deposits from Customers | 3,597,998.33 | 3,419,084.46 | 5.23% |
| Loans and Advances to Customers | 15,031,273.46 | 16,358,879.31 | -8.12% |
| Interest Expenses | 758,446.67 | 494,697.53 | 53.23% |
| Net Interest Income | 391,748.08 | 605,236.06 | -35.27% |
| Operating Expenses | 304,823.22 | 317,711.96 | -4.06% |
| Impairment Charges | 45,428.21 | ||
| Write Back | 3,561.14 | ||
| Operating Profit | 94,824.40 | 420,248.15 | -77.44% |
| Net Profit | 67,795.07 | 294,233.53 | -76.96% |
| Capital Adequacy (%) | 12.60 | 11.07 | 13.82% |
| NPL (%) | 4.96 | 3.55 | |
| Cost of Fund (%) | 11.53 | 8.34 | 38.25% |
| Annualized EPS (In Rs.) | 11.30 | 49.04 | -76.96% |
| Net Worth per Share (In Rs.) | 171.19 | 165.23 | 3.61% |
| Qtr end PE Ratio (times) | 67.88 | - | - |
| Qtr End Market Price | 767.00 | - | - |
