SBC PROFIT DECLINES BY 9.1%

MBABANE – SBC Limited’s profit before tax declined by 9.1 per cent to E28 million from E31 million in 2017.

In the financial results for the six months ended June 30, 2018, the company reported that an adjustment to a prior year estimate amounting to E1 million lifted the effective tax rate up to 31.9 per cent.

The overall result was that earnings per share declined from 22 cents in the comparative period and from 43 cents for the full prior year to 20 cents in the period under review.

It was reported that other income at E25 million was up by 39 per cent over the prior year comparative and was attributed to an increase in interest bearing loans to related parties, as well as low average cash balances in the 2017 period and prime overdraft lending rate increases, which benchmark the rate at which these loans earn interest.

Finance costs at E67 million from 2017’s E52 million showed an increase by 30 per cent over the prior period comparative, and predominately arose from interest on notes issued under the listed medium term note programme and other promissory notes issued by subsidiary Select Limited.
Average borrowings increased by 21 per cent and the average rate increased by 0.8 per cent to 12.0 per cent over the prior period in an escalating borrowing cost environment.

SBC increased its level of disbursements to E158 million (2017 – E135 million) for the period under review, due to an accelerated growth in Lesotho on the back of opportunities afforded by the mobile loan management system, the securing of addition funding and sales infrastructure expansion.
This has been facilitated by a relatively stable political environment and along with that, a consistent collection performance.

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