UUE Holdings' Q1 earnings fall to RM1.69mil, expects resilient year ahead despite challenges.

UUE Holdings Bhd's Q1 earnings fell to RM1.69mil from RM5.56mil YoY due to weaker topline. Revenue dropped to RM32.4mil from RM38.96mil, mainly due to slower Singapore projects. However, new projects in Singapore are expected to contribute to revenue in coming quarters. The company remains cautiously optimistic despite external factors like US tariff hikes and expects to maintain resilient performance for the rest of the financial year.

World Acceptance (NASDAQ:WRLD), a leading consumer installment lender, reported its first-quarter (Q1) fiscal year 2026 earnings on July 24, 2025. The company's earnings per share (GAAP) fell sharply to $0.25, missing analyst estimates of $1.25 by a wide margin [1]. This decline was an 86% drop from the same period last year. However, revenue (GAAP) surpassed expectations at $132.5 million, increasing year-over-year and beating forecasts [1].

The revenue growth was driven by a 2.3% increase over the prior year, but it was not enough to offset the significant drop in earnings. The company's provision for credit losses (GAAP) and general and administrative expenses (GAAP) rose significantly, weighing heavily on profits [1]. Provision for credit losses increased by 11.2% to $50.5 million, while general and administrative expenses climbed by 14.6% to $70.4 million [1].

World Acceptance operates over 1,000 branches across the U.S. and focuses on providing small and medium-sized installment loans to underbanked consumers. The company's core business is direct lending, but it also generates revenue from credit insurance and tax preparation services [1]. Despite the challenges, the company remains cautiously optimistic about its future prospects.

The company's loan portfolio trends showed some progress, with gross loans outstanding shrinking slightly year over year but showing a sequential increase from the previous quarter, suggesting stabilization after several quarters of contraction [1]. New customer loan production expanded by 30.8%, and later-stage loan delinquencies improved, falling to 5.4% of the portfolio [1].

World Acceptance entered a new $640 million senior secured credit facility, enhancing its funding flexibility and enabling further share buybacks. The company repurchased 87,609 shares for $13.0 million and is authorized for up to $100 million in buybacks, with some limitations [1]. The open branch count at quarter end stood at 1,014, a net decrease of ten branches from the prior year, representing ongoing efforts to optimize branch coverage and reduce underperforming locations [1].

Despite the mixed earnings report, World Acceptance's leadership remains focused on managing its branch network efficiently, maintaining robust customer relationships, and managing credit risk prudently [1]. The company continues to face competitive pressures from both local storefront lenders and digital fintech rivals, requiring it to regularly refine its product offerings and service model [1].

References:
[1] https://www.theglobeandmail.com/investing/markets/markets-news/Motley%20Fool/33635914/world-acceptance-posts-q1-profit-drop/