Monday, December 11, 2023

Covid-19 knocks Letshego’s half-year profits

The Covid-19 pandemic and its associated lockdown scenarios across Letshego Group’s regional footprint have had a direct impact on transaction volumes.

The pandemic affected the company’s profit before tax to shrink by 20 percent with profit after tax also hitting a low by 24 percent compared to the previous reporting period. 

Presenting the groups’ half year financial results for the period ended June 30th 2020 through visual media briefing, Letshego Group Chief Executive Officer, Andrew Okai indicated: Letshego’s sales volumes were affected from April onwards for both our Deduction at Source (DAS) and Micro and Small Entrepreneur (MSE) segments. 

May and June showed measured improvement following the implementation and enhancement of our digital access channel strategy. The company’s MSE segment, that makes up nine percent of the Group’s total loan book, was impacted in the education, travel & tourism, manufacturing and trade sectors, with approximately 60 percent of the customers accepting the offer of a repayment holiday. 

Continuous customer engagement throughout the repayment holiday period, along with the company’s heightened collection and recovery strategy, assisted in reducing flows into Non-Performing Loans (NPLs).

Okai also said digitised channels have assured business continuity throughout varying levels of lockdowns, allowed the business to continue the delivery of customer support and value, as well as enabled it to maintain alignment with the longer-term ambition and vision to create a ‘future organisation’.

Okai also said: “we have kept a close eye on the underlying business. Post the lockdown we are seeing recovery uptake in our business volumes. However further impact of this pandemic will be felt in quarter four.”

On the outlook, although Letshego has experienced a measured downside impact as a result of slowed transaction volumes in pandemic conditions, the Group’s business remains resilient. “The Board expects that while a W-curve response to the pandemic will persist, with potential and varying stages of lockdowns continuing as governments and national health departments seek to reduce spiking rates of infection in local populations,” he further said. 

In the second half of 2020, Letshego’s progression in implementing the Group’s transformational strategy, alongside the concurrent execution of effective pandemic plans, the Group is confident in the business’ ability to maintain resilience throughout ongoing pandemic conditions, managing risk and supporting the potential upside of new business flows via its digitised channels.


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