Bahrain's BCFC registers total operating income of BD33.8m for 2020

During Q4, the group registered a total comprehensive loss of $20mln

  

MANAMA: Bahrain Commercial Facilities Company (BCFC) registered a net loss of BD7.3 million in the fourth quarter (Q4) of 2020 (2019: net profit of BD1.6m) and registered a basic and diluted earnings per share of -36 fils (2019: 8 fils).

During Q4, the group registered a total comprehensive loss of BD7.7m (2019: total comprehensive income of BD2m).

For the quarter, the group achieved net interest income of BD5.1m, 15pc below the same period last year (2019: BD6m).

The group has achieved an operating income of BD7.3m, which is 28pc lower than the same period last year (2019: BD10.1m).

For 2020, the group has reported net loss of BD4.3m, which is significantly lower than net profit of BD17.1m achieved in 2019.

This resulted in basic and diluted earnings per share of -21 fils (2019: 85 fils).

The group registered total comprehensive loss of BD8m compared with comprehensive income of BD14m achieved in 2019.

Net interest income was BD23.5m, 12pc below BD26.7m in 2019.

Total operating income was BD33.8m which is 25pc less than BD45.3m in 2019.

The reduction in profitability is predominantly due to higher impairment provisions which were made to safeguard the quality of the loan portfolio against challenges customers are expected to face due to Covid-19 pandemic fallout.

During 2020, the company repaid $80m and $125m syndicated loans.

These loans were paid through arranging new term loans from partner banks.

The group remained in a healthy liquidity position with a low leverage of 1.8 multiples with total shareholders’ equity of BD126m, 17pc lower than BD152m in 2019.

Total assets as of end-2020 stood at BD355m, which is 13pc lower than BD410m as of end-2019.

Chairman Abdulrahman Fakhro stated that, “the pandemic had a negative impact on all segments of the economy, more so on small and medium size enterprises which the company predominantly deals with. In the crisis, BCFC Group remained extremely conservative and prudent in taking impairment provisions.

Priority

“The company has prioritised its long-term health over tactically focusing on current period profitability as the impact of the pandemic is still not fully revealed. However, with its core competencies, solid business model and strong financial position, the company shall continue to support customers and provide healthy returns to shareholders once economic activities normalise.

“BCFC Group continues to contribute towards social causes and welfare of Bahraini society. During the year, the company has donated BD464,000 to various charities. To support Bahraini customers, the company has provided six months loan instalments deferral without any interest or fees on the CBB directives. This has resulted in a modification loss of BD15.2m.

“The company received BD1.9m as government support towards partial reimbursement of its Bahraini staff salaries and electricity bills.”

Bahrain Credit achieved a net loss of BD3.6m (2019: BD13.9m).

Considering the uncertainties and heightened credit risk, the company has taken significantly higher provisions for expected credit losses. The company remained very selective in providing new credit facilities. New loans were sanctioned to customers belonging to relatively low risk market segments.

Total new loans worth BD39m were advanced during the year (2019: BD151m). The company’s net interest income stands at BD23.5m, 12pc behind of last year (2019: BD26.7m). The company has provided BD21.6m as impairment provisions significantly higher than same period last year in anticipation of difficult market conditions.

Support

National Motor Company has reported a net loss of BD0.4m (2019: net profit of BD2.1m). These results are without considering the government support. If considered, NMC would have reported a net profit of BD0.5m. These results are particularly remarkable considering the significant decline in the new vehicle sales during the year and substantial erosion of margins due to accumulation of vehicle supplies in the country. In such challenging environment, the company has focused its energy on efficient inventory controls with correct mix of vehicles, lean and skilled deployment of workforce, strong focus on customer satisfaction and emphasis on cost optimisation.

Tasheelat Automotive Company reported a net loss of BD0.6m in the current year compared with a net profit of BD0.3m in 2019.

The Covid-19 pandemic has impacted the performance of the company. Due to reduction in the customers disposable income, the customers are moving towards lower value cars which augurs well for the company.

The reduction in current year bottom line is mainly attributable to the introduction of ‘Haval’ and ‘Great Wall’ brands to Bahrain, which has increased the company’s cost structure in current period.

These new brands have high-tech, elegantly designed, reliable and rightly priced vehicles which are expected to deliver promising results in coming years. These new additions are in line with the company’s strategy to provide quality and feature rich vehicle to customers at affordable prices.

Tasheelat Insurance Services Company achieved a net profit of BD0.2m (2019: BD0.7m).

The company’s performance was impacted due to reduction in sales volume of insurance products, mainly motor, medical and life insurance. The reduction is a combination of contraction in new vehicle sales and lower commission income due to customer shift to lower value vehicles.

Tasheelat Real Estate Services Company has registered a net profit of BD0.1m (2019: BD0.2m).

The real estate market in Bahrain remained uninspiring with general decline in demand and correction of prices in certain areas.

Despite the lacklustre real estate activities, the company continued to liquidate its land plot and apartment inventory.

The company’s investment property portfolio has seen reduction in occupancy rates and average rental rates in some buildings, but it continues to provide steady and reliable annuity type returns.

Tasheelat Car Leasing Company reported net loss of BD27,000 (2019: net profit of BD101,000).

The company’s performance has been impacted due to significant reduction in visitors in the country because of closure of airport and land border.

The company remained dynamic in resizing its fleet to cater to current market conditions and healthy mix of long-term and short-term lease contracts with healthy retained margins.

Commenting on the results, managing director Reyadh Sater said the company shall continue to support customers and has ensured availability of its services throughout the crisis period without any interruptions thanks to the investments made in digital initiatives to address every customer relation touchpoint.

“All the services were provided to customers in full compliance with the government directives, prioritising the health and well-being of our employees. BCFC Group with strong equity and diversified business model, shall continue to look for new opportunities to further diversify revenue streams and increase shareholders’ value.”

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