BEIJING (dpa-AFX) - Yiren Digital Ltd. (YRD), a Chinese financial technology company, on Thursday reported a decline in net profit for the first quarter despite increased revenue.
For the three-month period to March 31, Yiren Digital registered a net income of RMB 247.506 million, or RMB 1.42 per share, lower than RMB 485.883 million, or RMB 2.75 per share, in the same period last year. Net income per ADS stood at RMB2.84 as against the prior year's RMB5.51 per ADS.
Commenting on the first quarter net earnings, the company said: 'The decrease was primarily due to the growing loan volume facilitated under our risk-taking model, resulting in substantial upfront provisions required by the current accounting principles. Moreover, declining sales in the insurance brokerage business and the consumption and lifestyle segments, increased R&D costs, and an unrealized loss from fair value adjustments on invested assets further contributed to the overall reduction in profitability.'
Income before provision for income taxes declined to RMB 273.981 million from the prior year's RMB 617.662 million.
Revenue was RMB 1.554 billion, up from RMB 1.378 billion a year ago.
Revenue from the financial services business was RMB1.174 billion, higher than last year's RMB738.1 million, mainly due to the persistent and growing demand for the company's small revolving loan products. Total loans facilitated were RMB15.2 billion, higher than RMB11.9 billion last year.
Further, the company said that its Chief Financial Officer, Yuning Feng, will step down due to personal reasons. Subsequently, the company has appointed Ka Chun William Hui as the new CFO, with effect from June 30.
Hui joined CreditEase, Yiren Digital's parent company, in 2017, with a focus on global investment and capital market operation. He has nearly 20 years of experience in investment banking and capital markets.
Looking ahead, for the second quarter, the company expects revenue of RMB1.6 billion to RMB1.7 billion, with a healthy net profit margin, driven by loan growth and further market penetration into new customer segments.
For the second quarter of 2024, Yiren Digital had registered revenue of RMB 1.496 billion.
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