Credit Corp posts 21% hike in operating profit

CREDIT Corp group has recorded a 21% increase in its cash operating profit for the first half of this year to K15.353 million, from K12.669 million posted during same period last year.
In contrast, the group suffered an after-tax loss of K1.2 million during the period in review.
However, the group considered the first-half result as “most satisfactory” when viewed against the negative backdrop that prevailed due to the global economic crisis.
Group chairman Garth McIlwain said in a statement that financing business volumes throughout the group – PNG, Solomon Islands, Vanuatu, and Fiji – had held up well and exceeded the volume achieved during the same period last year.
 “Property rentals in PNG have returned above budget results due to the recent surge in the local rental market,” he said.
It also had a negative adjustment of K58.54 million to half-year profit and loss account when its share price as at June 30 this year fell K0.85 from K0.99 posted last Dec 31.
Mr McIlwain said a 9% equity investment in Bank South Pacific (BSP) Ltd capital structure continued to be affected by what appeared to be a sentiment of uncertainty on worldwide stock exchanges.
He said it was noted that a favourable half-year result was released by BSP and which recorded increased profitability over the same period last year.
 “Furthermore, the bank dividend stream has been maintained at 2008 levels. Your board remains confident that the share price will recover as time passes and the strong BSP dividend stream will continue,” Mr McIlwain said.
He said the negative adjustment due to the reduction in BSP share price was compensated when the regular three real estate valuations were undertaken and booked.
 “This resulted in a positive adjustment of K46 million the board is confident that the prime Port Moresby property portfolio that consists of Credit House and the 93 Era Dorina executive apartments and town houses will continue to perform profitably,” he said adding both were premiere locations in NCD.
He said the PNG economy continued to perform well which was contrary to the situation currently experienced in the US, Europe and other developed economies.
“The Credit Corp group is well placed with a strong capital base and strong liquidity indeed a capital base of K609.82 million places the group amongst the largest corporations operating in PNG and the Pacific,” Mr McIlwain said.