Rising Credit Losses and Currency Risks Shadow Harmoney’s Profit Boom

• Cash NPAT surged 166% to $6.1 million, surpassing full-year 2025 results
• Loan originations grew 27% to $242.7 million, led by existing and new customers
• Loan portfolio increased 9% to $856.7 million, with Australian portfolio expanding 18%
• Risk adjusted income rose 33% to $26.8 million amid low credit loss ratio of 3.9%
• Corporate debt refinanced at lower margins, maintaining strong covenant compliance

Strong Profit Growth Reflects Scalable Lending Model

Harmoney Corp Limited has delivered a compelling half-year performance for the six months ended 31 December 2025, with Cash Net Profit After Tax (Cash NPAT) soaring 166% to $6.1 million. This result not only dwarfs the prior corresponding period but also exceeds the full-year 2025 Cash NPAT of $5.7 million, underscoring the company’s operational leverage and growth trajectory.

The company’s statutory net profit after tax mirrored this strength, rising 202% to $6.1 million. Harmoney’s ability to convert portfolio growth directly into improved efficiency and profitability highlights the scalability of its consumer lending platform.

Loan Book Expansion and Margin Improvement Drive Income

Income for the half-year increased 12% to $71.9 million, fueled by a 9% growth in the loan portfolio to $856.7 million and a higher average loan interest rate of 17.2%. Notably, the Australian loan portfolio grew 18% to $501.9 million, now representing 61% of the total portfolio. New Zealand’s portfolio also returned to growth in local currency, supported by the rollout of the Stellare® 2.0 platform.

Interest expense declined 5%, benefiting from lower facility margins and reduced swap rates, which contributed to a 33% increase in risk adjusted income to $26.8 million. The incurred credit loss ratio remained low at 3.9%, reflecting disciplined credit risk management despite portfolio expansion.

Customer Acquisition and Operating Efficiency

Loan originations rose 27% to $242.7 million, driven by a 48% increase in existing customer originations and a 14% rise in new customer originations. The company’s consumer-direct model, which fosters repeat borrowing at minimal acquisition cost, was instrumental in this growth.

Customer acquisition expenses increased 20% to $7.4 million but improved slightly as a percentage of originations, reflecting more efficient marketing spend. Operating expenses rose modestly by 14% to $13.3 million, with the cost to income ratio remaining low at 18.5%, a testament to Harmoney’s automated lending infrastructure.

Balance Sheet Strength and Refinancing

Harmoney’s balance sheet remains robust, with cash and cash equivalents of $50.1 million and net assets increasing 24% to $42.7 million. The company successfully refinanced its corporate debt facility in December 2025, reducing the limit to $15 million but securing materially lower margins and maintaining compliance with all financial covenants.

Deferred tax assets rose in line with profitability, and the company’s share-based payment plans were updated, with new performance rights granted to incentivise future growth.

Outlook and Market Position

Harmoney’s half-year results demonstrate a well-executed growth strategy, balancing loan book expansion with disciplined risk management and cost control. The company’s investment in technology, notably Stellare® 2.0, and its consumer-direct lending model position it well to sustain momentum in both Australia and New Zealand markets.

Bottom Line?

Harmoney’s strong half-year momentum sets a high bar for FY26, but investors will watch closely for credit trends and the impact of share-based incentives.

Questions in the middle?

• Will Harmoney sustain its low credit loss ratio amid continued loan book growth?
• How will the weakening New Zealand dollar affect future earnings and portfolio valuation?
• What impact will the updated Long Term Incentive Plan have on shareholder dilution?