Melran Projects is currently in great business momentum, and we estimate that the company’s credit portfolio is expected to continue to grow, among other things in light of the growing demand for non-bank credit in the Israeli market, and in particular in the Israeli Arab sector. The company enjoys high financial strength, very low exposure to sectors affected by the corona crisis, and is prepared to take advantage of opportunities that may arise in favor of its continued growth.
The non-bank credit company MRLRN Projects and Trading (Mellern) controlled by Moand Ryan, Has published its financial results for 2020 which indicate an increase in the credit portfolio, financing income, net and net profit.
Highlights of the results for 2020
Financing income in 2020 amounted to NIS 54.1 million, compared with NIS 54.6 million in 2019. The slight decrease is due to a change in the credit portfolio mix following the implementation of a more stringent risk management strategy by the company during the Corona crisis.
Net financing income in 2020 increased by 28% to a total of NIS 39 million, compared with NIS 30.4 million in 2019. The increase is mainly due to the diversification and reduction of credit sources during the period, which led to a significant decrease in the Company’s financing expenses. NIS 24.2 million in 2019 to NIS 15.1 million in 2020). On the other hand, the company’s financing income was similar in its level to last year (approximately NIS 54.1 million in 2020, compared with approximately NIS 54.6 million in 2019).
Provision expenses for doubtful debts amounted to NIS 2.4 million in 2020, compared with NIS 1.5 million in 2019. The change is mainly attributed to an increase in the general provision, which was partially offset as a result of a decrease in the provision for specific customers and bad debts.
It should be noted that since the beginning of the corona crisis, the company has recorded a general provision rate for credit losses higher than the rate recorded in the period prior to the crisis, taking into account the possible consequences of the crisis. However, in the Company’s estimation, and based on positive trends in the capital markets and the immunization process in Israel, the risks decreased compared to the same risks as were observed at the end of the first quarter and even in the second quarter of 2020. Last from 1%.
Net profit in 2020 climbed by 57% to NIS 17.3 million, compared with NIS 11 million in 2019.
The company’s credit portfolio grew to NIS 327 million in 2020, an increase of 9% compared to NIS 301 million at the end of 2019 and compared to NIS 232 million at the end of 2018. As of February 21, 2021, the credit portfolio amounts to NIS 345 million. .
Highlights of the results for the fourth quarter of 2020
Financing income in the fourth quarter of 2020 amounted to NIS 12.5 million, compared with NIS 16 million in the corresponding quarter last year. Net financing income in the fourth quarter of 2020 amounted to NIS 8.7 million, compared with NIS 10.2 million in the corresponding quarter last year.
The decrease is mainly due to a change made by the company in the mix of the credit portfolio and an increase in the component of loans backed by tangible collateral. These loans are usually characterized by a longer maturity and a lower rate of return compared to the check discounting activity characterized by a short maturity and a high yield.
The net profit in the fourth quarter of 2020 amounted to NIS 2.5 million, compared with a profit of NIS 3.7 million in the corresponding quarter last year.
As of the end of 2020, the company has cash and cash equivalents in the amount of approximately NIS 33.1 million.
The company’s shareholders’ equity at the end of 2020 amounts to NIS 110 million, compared with NIS 60.9 million at the end of 2019. The increase is due to the issuance of share capital and the company’s earnings during the reporting period plus NIS 4 million in dividends paid in June 2020.