The following is a summary of the Goeasy Ltd. (EHMEF) Q3 2024 Earnings Call Transcript:
Financial Performance:
Goeasy reported record revenue of $383 million in Q3 2024, a 19% increase year-over-year.
Record loan originations of $839 million, a 16% increase compared to Q3 2023.
Adjusted net income rose to $75.1 million, up 15% year-over-year, and adjusted diluted earnings per share increased to $4.32, up 13% from $3.81 in Q3 2023.The annualized net charge-off rate was 9.2%, maintaining stability within the forecasted range of 8.75% to 9.75%.
Efficiency ratio improved significantly to 23.1%, a reduction of 550 basis points from the prior year.
Business Progress:
Goeasy achieved significant expansion in its dealer network, growing to over 3,700 dealers and launched automotive financing product originations topping $150 million for the first time in company history.
Significant progress in home equity lending with volumes up 57% year-over-year, adding a strong performance product with low credit risk to their portfolio.
Announced the issuance of approximately CAD 700 million equivalent of senior unsecured notes to enhance debt funding capacity for continued growth.
Opportunities:
Organic loan growth set a record in a quarter with $255 million, highlighting the potential for further expansion amid favorable competitive dynamics and market share gains.
The CFO outlined that the company can grow the consumer loan book by approximately $300 million per year solely from internal cash flows without the need for external debt.
Risks:
Slight elevation in delinquencies due to tightening of certain collection practices and the weakening economic environment, although mitigated by a higher proportion of the portfolio being secured by hard collateral.
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