Wean Nepal Laghubitta Q4 Results: Revenue Contracts but Profit Returns to Positive Territory

Wean Nepal Laghubitta Bittiya Sanstha Limited (WNLB) has published its audited Q4 results for FY 2024/25, reflecting a mixed performance with lower revenue compared to last year but a return to profitability after heavy losses in the earlier quarters of this fiscal year.

The company posted a total revenue of Rs. 106.38 million in Q4, down 23.99% year-on-year compared to Rs. 114.96 million in Q4 of FY 2023/24. However, sequentially revenue rose from Rs. 77.17 million in Q3, signaling gradual business recovery.

The gross profit reached Rs. 47.09 million, translating into a gross margin of 44.26%, significantly higher than Q4 last year’s 27.97% and also an improvement from 42.00% in Q3. This shows stronger cost control and operational efficiency.

Net income turned positive. WNLB reported a net profit of Rs. 9.70 million in Q4, reversing losses from Q1 (-Rs. 13.93 million) and Q2 (-Rs. 12.46 million). However, this was still below last year’s Q4 profit of Rs. 11.37 million. The net margin stood at 9.12%, compared to 9.89% a year ago, but a sharp recovery from deep negative margins earlier this year.

Return indicators showed stability. Return on Assets (ROA) stood at 1.10%, compared to 1.28% last year, while Return on Equity (ROE) came in at 10.36%, slightly lower than 13.29% a year ago but much improved compared to the negative levels of Q1.

On a per-share basis, EPS (annualized) was reported at Rs. 11.50, down from Rs. 14.35 last year but far stronger than the steep losses reported in Q1 and Q2. The PE ratio stood at 183.07, reflecting expensive market valuation relative to earnings recovery.

The book value per share improved to Rs. 137.95 from Rs. 119.90 in Q4 last year. The market value per share surged to Rs. 2,105.01, up sharply from Rs. 1,521.00 last year, showing high investor confidence in the turnaround story despite financial volatility.

Financial Sector Ratios

• Capital Fund to RWA stood at 9.69%, slightly below last year’s 10.29%.

• NPL ratio increased to 3.93%, compared to 2.97% a year ago, indicating some asset quality stress.

• Loan loss provision coverage weakened to 47.07%, down from 66.94% last year, suggesting lower buffers against defaults.

• Cost of funds eased to 7.60%, down from 10.49% in Q4 last year.

• Base rate stood at 13.89%, an improvement from 16.24% last year, while Net Interest Spread improved to 7.40%, signaling better lending margins.

Dividend distribution for FY 2024/25 has not been declared yet.