Hong Leong Finance net profit drops 9.6% due to tax provisions write back in 2012

HONG Leong Finance said on Thursday that its full-year net profit dropped 9.6 per cent to $70.1 million as earnings for 2012 included the write back of tax provisions amounting to $65.7 million.

In the absence of that exceptional item, earnings for the 12 months to Dec 31 climbed 6.7 per cent from the previous year.

Net interest income and hiring charges at Singapore's largest finance company fell by 3.7 per cent to $148.2 million.

Fee and commission income, however, climbed 18.5 per cent to $15.5 million over the same period.

Net loan assets, which include hire purchase receivables, were up 2.1 per cent from the year before to $9.19 billion.

Deposits and balances dipped slightly by 1.4 per cent to $9.91 billion.

Total profits from operations, before allowances, slipped 6.5 per cent to $82.1 million.

Hong Leong said in a statement that "2013 started off on a low note with long shadows cast on world markets by the United States fiscal cliff and long-drawn eurozone debt crisis".

But the gradual improvement in global conditions over the year, complemented by a resilient domestic market, which resulted in a better than expected growth for the year.

While Hong Leong remains cautiously optimistic about this year's forecast, it noted that inflation and the tight labour market in Singapore could pose some challenges.

The board has proposed a final cash dividend of eight cents per share, bringing the total payout for the year to 12 cents apiece.

Annualised earnings per share came to 15.85 cents, down from 17.6 cents a year ago.

Net asset value per share was $3.72, up from $3.68 as of Dec 31, 2011.

Hong Leong shares closed up one cent at $2.67 on Thursday, before the results were released.

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