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Johannesburg - For every rand lent by AltX-listed micro-lender Blue Financial Services, it has written off 23 cents as non-performing loans.
Reporting interim results for the period to end-August on Monday, Blue posted a loss of R162m (R51.5m profit in 2008) and cautioned the group's local subsidiary's total liabilities exceeded assets by R121m - meaning it's technically insolvent.
On top of the loss, the company cautioned it had also breached a number of loan covenants, but said it was working on strategies to remedy these breaches.
The group's loan book was R1.2bn at the end of August, compared to R1.37bn reported in February. Non-performing loans soared from 6% (R54m) of the book at the end of February to 23% (R365m).
"New sales are lower than the performing loans maturing, and therefore non-performing loans become a larger percentage of the remaining book," the company said.
Expenses rose 119% as the group's branch network increased from 192 to 260. Cash and cash equivalents at the group dropped 44% from R183m to R102m, while the company saw net cash outflows of R130m for the six months.
The company said its infrastructure was "appropriate to sustain the levels of growth" experienced before, but this has no become excessive.
Blue's shares were 9% down at 70c/share on Monday morning.
- Fin24.com
