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LONDON (Alliance News) - ASA International Group PLC said Tuesday its overall performance in the third quarter remained strong but "substantially higher" than expected currency depreciation hurt profit in India and Pakistan, leading the microfinance company to lower its profit guidance.
The microfinance investor focuses on Asia and Africa. It said its number of clients in the first nine months of the year rose 23% year-on-year, with the total at September 30 exceeding 2.1 million.
ASA International's client numbers are up 14% year-to-date.
The number of branches the company has is up 20% year-on-year, with a 15% year-to-date increase. At September 30, ASA International had 1,595 branches.
The investor's outstanding loan portfolio increased to USD321 million. The outstanding loan portfolio client average of USD162 is a 3.2% year-on-year increase.
"We have seen a continuing positive operational performance during the third quarter of 2018, maintaining the momentum seen during the first half of the year," said Dirk Brouwer, chief executive officer.
"The performance of our African operations has demonstrated ongoing strength with increasing profitability in our East Africa division."
The strength of the US dollar posed problems for the microfinance investor, however.
ASA International said the US dollar strengthened more than expected in the third quarter, particularly in India and Pakistan where the company has "major operations". It said this will lead to existing and future local currency earnings translating into less dollar earnings, and the local currency capital of any operating subsidiaries leading to less US dollar capital.
Underlying operating performance is expected to be in line with management expectations but due to the currency depreciation, net profit is expected to be USD1.5 million to USD2 million lower than previously expected.
Brouwer added: "We continue to deliver strong profit growth and once these currencies have stabilised against the dollar, with the group continuing to benefit from its well-diversified portfolio of profitable, high growth assets in both Asia and Africa, we remain confident that we will be able to maintain our 20% to 25% medium-term earnings target."
The company, which listed on London's Main Market in July, had total assets of USD419,356 and total operating income of USD92,925 in 2017.
For the six months ended June, ASA International posted net profit of USD8.5 million.
Shares in ASA International were slightly up Tuesday at 442.00 pence each.