Great start of year for KRUK with record high Q1 net
Today KRUK has announced its financial results for the first quarter of 2022. The Group’s net profit came in at PLN 244m, up 92% year on year, marking its highest ever first quarter bottom-line figure. The result is in line with earlier estimates.
“I am extremely pleased to comment today on our performance after the first quarter of 2022. KRUK’s first quarter net earnings hit an all-time high. These results reflect our determined and successful efforts to achieve more and pursue excellence,” comments Piotr Krupa, KRUK S.A.’s CEO and President. “Our results are on a rising tide not only in Poland, but also – which is very important – internationally. KRUK has entrenched its position among Europe’s top players, but we want more and will consistently strive towards that goal. That’s who we are, not ones to rest on our laurels”.
New portfolio purchases amounted to PLN 262m, up 64% y/y, while recoveries from purchased debt portfolios amounted to PLN 623m, up 22% y/y. Revenue amounted to PLN 545m, up 42% y/y, delivering cash EBITDA of PLN 447m, up 23% y/y.
“We recorded a 22% increase in debt collections, while our cash EBITDA improved 23% year on year. Cash is what underpins KRUK’s fundamentally strong results. The assets we own still hold much unlocked potential,” comments Piotr Krupa. “As regards portfolio investments, this year also started off on a strong note but, traditionally, the most busy months in terms of new purchases are still ahead of us”.
Since its inception KRUK has purchased over 10 million debt cases and its daily data processing volume is close to 2.5 TB, generated using some 1,000 automated machines. At the same time, KRUK continues to hone its self-service tools (e-KRUK, e-payments, electronic signature, and online settlement). As at the end of the first quarter of 2022, online payments as a percentage of total recoveries at the amicable stage were 71% in Spain, 40% in Poland, 35% in Italy and 24% in Romania.
“The strategy we pursue is focused around three pillars – investment excellence, operational excellence and digital transformation,” adds Piotr Krupa. “This is crucial because while KRUK has always relied on strong technology to support its operations, it has now taken centre stage more than ever before. Adam Łodygowski, KRUK’s CDTO and Member of the Management Board, along with our entire IT team of nearly 300 professionals, is already implementing further changes and investing more resources to turn KRUK into an even stronger organisation technology wise. Piotr Kowalewski, our COO and Member of the Management Board, is working to further advance the automation of KRUK's operational processes. We are accustomed to hard work and when we see excellent results it is bringing, as we do now, then – besides satisfaction and confirmation of our strategic decisions – we get more drive and motivation to act,” says Piotr Krupa.
KRUK’s return on equity (ROE) for the last 12 months was 28%. Equity represents 46% of the KRUK Group’s financing sources. Net interest-bearing debt to equity stands at 0.9x, while net interest-bearing debt to cash EBITDA is 1.6x after the first quarter of 2022.
“I am pleased that we have been delivering strong returns for our shareholders, sharing income in these turbulent times, with about PLN 250m in dividends paid. KRUK's profitability and cash strength are exceptional, also when compared with the largest debt collection businesses listed on Europe’s stock exchanges. At the same time, we have the lowest leverage ratio and access to cheaper funding. KRUK has a fundamentally higher value and potential, which I strongly believe will show in our future reported results,” concludes Piotr Krupa.