PT BFI FINANCE INDONESIA: 1H17 RESULTS

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PT BFI FINANCE INDONESIA: 1H17 RESULTS July 2017

Disclaimer: The information contained in this presentation is strictly confidential for PT BFI Finance Indonesia Tbk (BFI or the ‘Company’) and is provided by the Company to you solely for your reference. Any reproduction, dissemination or onward transmission of this presentation or the information contained herein is strictly prohibited. By accepting delivery of this presentation you acknowledge and agree to comply with the foregoing restrictions. In addition, this presentation may includes projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on assumptions and are subject to various risks. Such forward-looking statements are not guarantees of future performance and no assurance can be given that any future events will occur, that projections will be achieved or that the Company’s assumptions will prove to be correct. Actual results may differ materially from those projected and the Company does not undertake to revise any such forward-looking statements to reflect future events or circumstances.

* All absolute figures have been rounded to the closest Rp billion and therefore may have some discrepancies with percentage calculations

1H17 KEY UPDATES Growth



01H17 new booking reached Rp6,775 bn, increase 30.0% YoY on backed by NDF Car and Mcy



Total managed receivables grows 15.1% YoY to Rp14,524 bn, while on net receivables increased by 27.7% to Rp 13,500 bn



Yield Portfolio increases 64 bps YoY to 20.56% and 36 bps above budget of 20.20%



01H17 NPL ratio improved to 1.09% from 1.51% YoY due to continued vigilance in risk management and collection. (Note: Writeoff policy for 4W & 2W changed to 210 days starting Dec-2016)



COC ratio stood at 2.14% (vs 2.09% YoY) and detained by improvement in NCL from 1.52% to 0.94%.



Cost of fund decrease 108bps YoY to 10.33%, supported by maturing higher funding and lower new funding cost



The issuance of Bond III Phase II 2017 of Rp1 trillion in Mar-2017 and USD 100 million syndicated loan (lead by SCB, BTMU & SMBC)



NIM improved 172bps from 8.51% in 01H16 to 10.23% in 01H17



01H17 PBT reached Rp658 bn, 42.5% YoY Growth,



01H17 PAT reached Rp526 bn, 54.5% YoY Growth backed by normalized tax rate of 20%



Final dividend payment of Rp110 / share in May-17,bringing total cash dividend for 2016: Rp260 / share or eq. 48.7% payout ratio



Stock split 1:10 has been completed successfully in Jun-17



Appointment of Mr. Andrew Adiwijanto as Director (pending OJK’s fit & proper test) to replace Mr. Cornellius Henry who reelected as Commissioner

Asset Quality

Funding

Profitability

Other updates

2

BALANCE SHEET HIGHLIGHTS In Rp bil (unless otherwise stated)

1H17

New Bookings

1H16

6,775

YoY

5,211  30.0%

Managed Receivables^

14,524 12,623  15.1%

Total Net Receivables

13,535 10,603  27.7%

Total Assets

14,688 11,683  25.7%

Total Debt^

10,247

8,884  15.3%

Total Equity

4,588

4,113  11.6%

Driven by Non-Dealer 4W and 2W bookings growth Higher growth vs managed rec. is due to declining JF

FY16

FY15

10,743

10,058  6.8%

13,026

12,229  6.5%

11,583

9,898  17.0%

12,476

11,770  6.0%

8,915

9,457  5.7%

4,255

4,019  5.9%

New bank loans drawdown and issuance of new Bond

YoY

Rp bil

* All absolute figures have been rounded to the closest Rp billion and therefore may have some discrepancies with percentage calculations ^ Includes channeling and joint financing transactions

4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0

New Bookings

2,197

2,213

2,337

2,874

2,458

3,073

3,166

3,610

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

Successfully able to sustain business growth from Non-Dealer Financing 4W and 2W 3

PROFIT & LOSS HIGHLIGHTS In Rp bil (unless otherwise stated)

Interest Income

1H17 1H16

YoY

1,401 1,239  13.1%

Financing Cost

483

512  5.7%

Net Interest Income

918

727  26.3%

Fee Based Income

311

240  29.9%

Net Revenue

1,423 1,127  26.2%

Operating Expenses

619

535  15.6%

Operating Income

804

592  35.8%

Cost of Credit

146

130  12.0%

PBT

658

462  42.5%

PAT

526

340  54.5%

FY16 • Strong Non Dealer Financing income • Yield improvement of 64 bps YoY In line with new booking growth

Manageable Increase driven largely by business volume growth

Controllable COC despite shorter WO cycle (210 DPD vs 270 DPD) Normalized tax rate in 01H17

FY15

YoY

2,532

2,415

 4.8%

1,001

1,063

 5.8%

1,531

1,353

 13.2%

489

383

 27.7%

2,358

2,066

 14.1%

1,108

968

 14.5%

1,250

1,099

 13.7%

225

263

 14.4%

1,025

835

 22.8%

798

650

 22.8%

* All absolute figures have been rounded to the closest Rp billion and therefore may have some discrepancies with percentage calculations

Continued improvements in portfolio yield and Net Interest Margins

4

KEY RATIOS 1H17

1H16

YoY

Net Interest Margin

10.23% 8.51%  172 bps

Cost to Income

43.48% 47.47%  399 bps

COC / Avg Rec.

2.14% 2.11% 

ROAA

9.84% 7.92%  192 bps

ROAE

23.62% 16.84%  678 bps

NPL*

1.09% 1.51%  42 bps

Debt / Equity

2.01x

1.66x 

3 bps

0.35x

Improvement in both yield and COF

To increase reserve coverage to productive assets and NPL Strong growth in PAT yoy Improved NPL due to prudent risk mgt & shorter WO cycle

FY16

FY15

YoY

8.85%

8.20%

 65 bps

47.00% 46.83%

 17 bps

1.80%

2.17%

 37 bps

8.68%

7.75%

 93 bps

19.37% 16.90%  247 bps

0.91%

1.33%

 42 bps

1.76x

1.63x

 0.13x

* Defined as Pastdue >90 days, Calculated from total managed receivables (including off B/S receivables)

Maintain strong financial ratios which reflect robust business performance management 5

ABILITY TO BUILD A MORE ROBUST BALANCE SHEET Bookings vs Receivables Growth (2012-1H17) 14,000 12,000 Rp bil

10,000 8,000

CAGR B: 11% R: 15%

7,373

9,570

11,220

12,229

13,026

12,623

14,468

2012

2013

2014

2015

2016

1H16

1H17

• Loan book shows improvement over the years – able to improve quality and tenor of loans booked, resulting in consistent Receivables growth compared to Bookings • CAGR growth yoy higher than the industry

• Consistently strong growth in Revenue as a result of robust balance sheet • Shows ability to maximise income generation from assets

9,295

8,652

10,058

10,743

Bookings +30%

6,993

6,000

6,775

5,211

4,000 2,000 0

Managed Receivables

Bookings

Revenue Growth (2012-1H17) 3,500 3,000 Rp bil

2,500

CAGR 20%

2,000 +21%

1,500 1,000 500 0

1,582

1,890

2,299

2,831

3,227

1,559

1,885

2012

2013

2014

2015

2016

1H16

1H17

Revenue

Sustainable loan and revenue growth over the years – backed by more profitable asset mix 6

STABLE PROFITABILITY OVER THE YEARS ROA vs Industry

PAT Growth 12.0%

900 800

10.0%

20.0%

8.7%

8.6%

6.0%

7.8%

400

798

300

600 490

650

4.9%

17.5%

3.9%

3.8%

4.0%

13.9% 11.1%

5.0% 4.1%

3.4%

12.0%

11.8%

10.0% 5.0%

2.0% 0.0%

2012 2013 2014 2015 2016

0.0% 2012 2013 2014 2015 2016 1Q17

Source: Company, OJK



18.2%

16.8% 16.9%

508

100



19.4%

18.9% 16.2%

15.0%

500

23.3%

10.0% 8.9%

8.0%

600 Rp bil

25.0% 10.2%

CAGR 13%

700

200

ROE vs Industry

PAT growth in spite of slowing economy Continued efficient OPEX management in spite of aggressive expansion over the years

• •

One of the highest ROA companies in the industry Consistently outperformed industry

2012 2013 2014 2015 2016 1Q17 Source: Company, OJK



ROE improving over the years

Still one of the most profitable multifinance companies, with Returns on Equity and Assets much ahead of the industry 7

ASSET QUALITY UNDER CONTROL NPL Trend (2012-1H17)

Write-Offs (2012-1H17)

4.00%

2.50% 2.15%

3.50%

1.83%

2.00%

3.00%

1.54% 2.50%

1.38% 1.38%

1.50%

1.45%

2.00% 1.00%

1.50%

0.82% 0.66%

1.00% 0.50%

0.43%

0.52%

0.89%

0.99%

0.64%

0.96%

0.50% 1.05%

1.38%

1.48%

1.33%

0.91%

1.09%

2012

2013

2014

2015

2016

1H17

0.00%

0.00% NPL %



Non-Dealer

Dealer

Well managed balance sheet with low NPLs

2011

Other

2012

2013

Gross Write-Off %

• •

2014

2015

2016

1H17

Net Write-Off %

Lower write off than its peers Write-off policy for 4W and 2W changed to 210 days in Dec-16

8

STRONG CAPITAL BASE Source of Funding (2012-1H17)

External Funding Sources

100% 90% 3,363

2,862

80%

3,567

4,019

4,255

2,139

1,259

1,682

2,965

70% 60%

2,212

1,358

50% 40%

1,124

1,454

2,404

3,172

2,484

4,588

JF 7%

724 3,390

Bonds & MTN 33%

1,622

30% 20%

3,933

5,637

4,691

6,133

10%

Borrowings USD 21%

0%

2012 Total Equity

2013

2,862

3,363

Bank borrowings





2014

2015

2016

1H17

3,567

4,019

4,255

4,588

Bonds & MTN

JF

Borrowings IDR 39%

Equity

Increasingly larger proportion of bonds issued, taking advantage of improved pricing climate for bonds since last year The decline e in Joint Financing activities contributes to better funding cost

Total : Rp10,247 Billion •



Corporate rating upgrade by Fitch Ratings to AA-(idn) by end of 2016 has improved BFI credit profiles and impact to overall COF Adequate additional facilities in pipelines to support further business expansion

Capital structure more diversified, resulting in better management of borrowing cost and stable NIM 9

ASSET COMPOSITION Booking Composition (1H16 vs 1H17) 100%

2% 11%

90%

11%

80%

Managed Receivables Composition (1H16 vs 1H17) 2% 12%

100%

13%

80%

90%

70%

70%

60%

60%

50%

54%

54%

40%

30%

30%

20%

20%

10%

19%

17%

10%

0%

3%

2% 1H17

0%

Dealer New 4W Non Dealer 2W

Dealer Used 4W Total Leasing

Non Dealer 4W Property

3% 13%

6%

8%

43% 47%

50%

40%

1H16

2% 12%

24% 23% 14%

7%

1H16 Dealer New 4W Non Dealer 2W

1H17 Dealer Used 4W Total Leasing

Non Dealer 4W Property

Continuous effort to shift the business towards higher yield segments

10

DISTRIBUTION NETWORK (AS AT JUN-17) Business Distribution and Branch Network

19%

19%

1H16

1H17

Kalimantan 31 outlets

↑26%

Sumatera 60 outlets 19%

10%

↑26%

13%

11%

1H16

1H17

50%

54%

↑35% 1H16

↑20%

19%

18%

16%

1H16

1H17

Sulawesi and East 61 outlets

1H17

Java and Bali 164 outlets

Total 316 Outlets

52%

Denotes % Managed Receivables by Region, 1H17 vs 1H16

YoY Booking growth

Denotes % Outlets by Region

Highest growth is observed in Jawa Bali and followed by Sumatera 11

Thank you