Hong Leong Finance : Full Year Financial Statements And Dividend Announcement

Hong Leong Finance Limited

Registration No. 196100003D

Head Office: 16 Raffles Quay #01-05 Hong Leong Building Singapore 048581

Telephone [phone] Facsimile 6224 6773

Full Year Financial Statements And Dividend Announcement

Condensed interim consolidated financial statements for the six months and full year ended 31 December 2021.

1. Condensed interim consolidated statement of profit or loss and other comprehensive income

		6 months	6 months		12 months	12 months
		ended	ended	+/(-)	ended	ended	+/(-)
		31 Dec	31 Dec	31 Dec	31 Dec
	Note	2021	2020		2021	2020
		$'000	$'000	%	$'000	$'000	%
Interest on loans		88,106	98,126	(10.2)	179,765	230,360	(22.0)
Hiring charges		21,633	24,854	(13.0)	44,668	52,086	(14.2)
Other interest income		7,136	9,636	(25.9)	15,544	28,339	(45.1)
Interest income/hiring charges		116,875	132,616	(11.9)	239,977	310,785	(22.8)
Less: Interest expense	E10	28,132	67,936	(58.6)	62,011	163,937	(62.2)
Net interest income/hiring charges		88,743	64,680	37.2	177,966	146,848	21.2
Fee and commission income		6,510	5,416	20.2	11,181	10,229	9.3
Other operating income	E6	113	1,631	(93.1)	270	1,714	(84.2)
Income before operating expenses		95,366	71,727	33.0	189,417	158,791	19.3
Less: Staff costs		31,948	27,563	15.9	64,506	54,678	18.0
Depreciation of property, plant
and equipment		4,020	3,969	1.3	8,011	7,922	1.1
Other operating expenses		7,951	7,008	13.5	14,896	13,739	8.4
				14.0			14.5
Total operating expenses		43,919	38,540	87,413	76,339
Profit from operations before
allowances		51,447	33,187	55.0	102,004	82,452	23.7
Less: Allowances for doubtful debts
and other financial assets net of
reversal or recovery of doubtful
debts		3,099	986	214.3	60	7,733	(99.2)
Profit before tax		48,348	32,201	50.1	101,944	74,719	36.4
Less: Income tax expense	E8	8,212	4,811	70.7	17,123	10,810	58.4
Profit for the year/
Comprehensive income
attributable to owners of the
Company		40,136	27,390	46.5	84,821	63,909	32.7
Annualised earnings per share (cents)
- Basic		17.93	12.24		18.95	14.28
- Diluted		17.92	12.24		18.94	14.28

1

1. Condensed interim statements of financial position

Note

Assets

Cash at banks and in hand Statutory deposit with the

Monetary Authority of Singapore ("MAS") Singapore Government debt securities, MAS Bills and MAS Floating Rate Note ("FRN")

Hire purchase receivables

Loans, advances and factoring receivables

Allowances for doubtful debts

Other receivables, deposits and prepayments Subsidiaries and long-term investments Property, plant and equipment

Total assets

Liabilities

Deposits and balances of customers

Trade and other payablesE10 Current tax payable

Deferred tax liabilities Total liabilities

Equity

Share capital

Reserves

Accumulated profits

Equity attributable to owners of the

Company

Total equity and liabilities

Acceptances, guarantees and

other obligations on behalf of customers

Number of shares in issue

Net asset value per share ($)

	Group		Company
	31 Dec	31 Dec	31 Dec	31 Dec
2021		2020	2021	2020
	$'000	$'000	$'000	$'000
528,208		613,775	527,198	612,762
298,598		317,621	298,598	317,621
1,357,675		1,405,434	1,357,675	1,405,434
1,476,391		1,584,613	1,476,391	1,584,613
9,246,176		9,390,068	9,246,176	9,390,068
10,722,567		10,974,681	10,722,567	10,974,681
(27,073)		(26,772)	(27,073)	(26,772)
10,695,494		10,947,909	10,695,494	10,947,909
16,963		19,070	16,962	19,069
-		-	535	535
55,325		61,253	55,325	61,253
12,952,263		13,365,062	12,951,787	13,364,583
10,806,871		11,194,359	10,811,206	11,198,668
164,710		232,213	163,365	230,874
17,165		19,480	17,163	19,474
970		897	970	897
10,989,716		11,446,949	10,992,704	11,449,913
889,771		889,117	889,771	889,117
778,592		756,941	778,592	756,941
294,184		272,055	290,720	268,612
1,962,547		1,918,113	1,959,083	1,914,670
12,952,263		13,365,062	12,951,787	13,364,583
1,978		4,054	1,978	4,054
447,817,233		447,552,473	447,817,233	447,552,473
	4.38		4.29	4.37	4.28

2

1. Condensed interim statements of changes in equity

Group

At 1 January 2021

Issue of shares under share option scheme

Value of employee services received for issue of share options

Value of employee services transferred for share options exercised or lapsed

Final dividend of 5.5 cents per share (tax exempt one-tier) paid in respect of year 2020

Interim dividend of 3.75 cents per share (tax exempt one-tier) paid in respect of year 2021

Adjustment under MAS 811

Comprehensive income for the year

Transfer to Statutory reserve

At 31 December 2021

At 1 January 2020

Issue of shares under share option scheme

Value of employee services received for issue of share options

Value of employee services transferred for share options exercised or lapsed

Final dividend of 10 cents per share (tax exempt one-tier) paid in respect of year 2019

Interim dividend of 3.5 cents per share (tax exempt one-tier) paid in respect of year 2020

Adjustment under MAS 811

Comprehensive income for the year

Transfer to Statutory reserve

At 31 December 2020

				Regulatory
			Share	loss
Share	Statutory	Capital	option	allowance	Accumulated
capital	reserve	reserve	reserve	reserve	profits	Total
$'000	$'000	$'000	$'000	$'000	$'000	$'000
889,117	744,744	2,307	2,397	7,493	272,055	1,918,113
602						602
			418			418
52			(347)		295	-
					(24,618)	(24,618)
					(16,789)	(16,789)
				374	(374)	-
					84,821	84,821
	21,206				(21,206)	-
889,771	765,950	2,307	2,468	7,867	294,184	1,962,547
889,051	728,766	2,307	3,279	15,562	275,278	1,914,243
62						62
			319			319
4			(1,201)		1,197	-
					(44,756)	(44,756)
					(15,664)	(15,664)
				(8,069)	8,069	-
					63,909	63,909
	15,978				(15,978)	-
889,117	744,744	2,307	2,397	7,493	272,055	1,918,113

3

1. Condensed interim statements of changes in equity (continued)

Company

At 1 January 2021

Issue of shares under share option scheme

Value of employee services received for issue of share options

Value of employee services transferred for share options exercised or lapsed

Final dividend of 5.5 cents per share (tax exempt one-tier) paid in respect of year 2020

Interim dividend of 3.75 cents per share (tax exempt one-tier) paid in respect of year 2021

Adjustment under MAS 811

Comprehensive income for the year

Transfer to Statutory reserve

At 31 December 2021

At 1 January 2020

Issue of shares under share option scheme

Value of employee services received for issue of share options

Value of employee services transferred for share options exercised or lapsed

Final dividend of 10 cents per share (tax exempt one-tier) paid in respect of year 2019

Interim dividend of 3.5 cents per share (tax exempt one-tier) paid in respect of year 2020

Adjustment under MAS 811

Comprehensive income for the year

Transfer to Statutory reserve

At 31 December 2020

				Regulatory
			Share	loss
Share	Statutory	Capital	option	allowance	Accumulated
capital	reserve	reserve	reserve	reserve	profits	Total
$'000	$'000	$'000	$'000	$'000	$'000	$'000
889,117	744,744	2,307	2,397	7,493	268,612	1,914,670
602						602
			418			418
52			(347)		295	-
					(24,618)	(24,618)
					(16,789)	(16,789)
				374	(374)	-
					84,800	84,800
	21,206				(21,206)	-
889,771	765,950	2,307	2,468	7,867	290,720	1,959,083
889,051	728,766	2,307	3,279	15,562	271,899	1,910,864
62						62
			319			319
4			(1,201)		1,197	-
					(44,756)	(44,756)
					(15,664)	(15,664)
				(8,069)	8,069	-
					63,845	63,845
	15,978				(15,978)	-
889,117	744,744	2,307	2,397	7,493	268,612	1,914,670

4

1. Condensed interim consolidated statement of cash flows

Operating activities Profit for the year Adjustments for:

Impact of accrual of interest income Impact of accrual of interest expense Allowances for doubtful debts Interest expense on lease liabilities Depreciation of property, plant and equipment (Gain)/loss on disposal of property, plant and equipment Value of employee services received for issue of share options Income tax expense

Changes in working capital:

Loans, advances and receivables

Other receivables, deposits and prepayments

Singapore Government debt securities, MAS Bills and MAS FRN Deposits and balances of customers

Trade and other payables Cash used in operations

Income taxes paid

Cash flows used in operating activities

Investing activities

Purchase of property, plant and equipment

Proceeds from disposal of property, plant and equipment

Cash flows from/(used in) investing activities

Financing activities

Payment for lease liabilities

Proceeds from exercise of share options

Proceeds from borrowings

Dividends paid

Cash flows used in financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

12 months	12 months
ended	ended
31 Dec 2021	31 Dec 2020
$'000	$'000
84,821	63,909
(2,653)	4,414
(29,087)	(68,726)
587	8,219
339	633
8,011	7,922
1	(1,357)
418	319
17,123	10,810
79,560	26,143
251,828	598,174
4,760	(1,324)
47,759	126,329
(387,488)	(1,112,690)
(42,464)	45,409
(46,045)	(317,959)
(19,365)	(14,055)
(65,410)	(332,014)
(399)	(349)
-	1,750
(399)	1,401
(6,917)	(6,370)
602	62
8,941	42,914
(41,407)	(60,420)
(38,781)	(23,814)
(104,590)	(354,427)
931,396	1,285,823
826,806	931,396

Cash and cash equivalents included in the condensed interim consolidated statement of cash flows comprise the following:

Cash at banks and in hand

Statutory deposit with the Monetary Authority of Singapore ("MAS") Cash and cash equivalents

31 Dec 2021	31 Dec 2020
$'000	$'000
528,208	613,775
298,598	317,621
826,806	931,396

In addition to the cash and cash equivalents above, marketable Singapore Government debt securities, MAS Bills and MAS FRN amounted to $1,357,675,000 (31 December 2020: $1,405,434,000) for the Group.

5