SHELTER AFRIQUE NEEDS PROFITABLE SHELTER

When Shelter Afrique sort and got $24.535m in new capital recently by issuing new shares at a premium, it did not anticipate such funds sitting in bank vaults for too long.

But, says unaudited figures to June 2017 released recently, that seems to be the case with short term deposits with banks springing from $2.7m by June 2016 to $20.013m although cash on hand and at bank reduced to $17.03m from $20.4m.

The issue seems to be with finding investment outlet with less need for impairment provision. Within the six months, loans and advances to customers dropped by 6.97% to $263.416m but impairment charges against non performing advances more than doubled to $5.603m.

Hence of all revenue streams Other income grew by 20.3% to $0.16m and interest income rose by 3.58% to $15.218m leading to 19.6% increase in net interest income to $8.123m since interest paid dropped by 9.87% to $7.095m.

So Shelter Afrique's main drawbacks within the half year were 32.7% drop in fee and commission to $0.751m; net foreign exchange loss as against marginal gain previously and more importantly, increased impairment  provisions.

So strong were these drawbacks that Shelter Afrique settled for $2.164m loss within the first half to June compared to $1.655m previously in spite of growth in operating expenses (8.53% to $4.759m) behind growth in net operating income (up 13.2% to $9.134m)

In other words, from a double digit profit margin of 10.4% by June 2016, double digit 13.4% loss to June this year was the new dance tune for Shelter Afrique.

Sure, with premium reserves standing at $27m, there is nothing to fear yet from $1.164m yet but then, continue on the same route and it won't be long before Shelter Afrique shops for new funds again.

SHELTER AFRIQUE: Half year, $m
                                2017.            2016
Total income.       16.129.         15.941
Interest income    15.218.         14.692
Interest expense.   7.095.           7.872
Net interest.           8.123.            6.819
Fee & Commission 0.751           1.116
Other income           0.160.          0.133
Net operating inc.  9.134.           8.069
Operating expenses 4.759.        4.385
Net forex gain.        (0.561)         0.007
Impairment charges 
on loans                    5.603.         2.047
Other impairment.  0.245.          0.00
Joint venture profit (0.008)        0.01
Profit before tax.     (2.164).      1.655
Profit margin %.       (13.4).         10.4
Loans & advances  263.416.    283.114
Short term deposits 20.013.        2.706
Bank & cash.             17.031.      20.432
Share capital.            76.464.      62.600
Share premium.        27.0.           14.359

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