Today, the Management Board of KRUK S.A. has published the Group’s earning figures for 2020, which are in line with initial estimates. The KRUK Group reported a net profit of PLN 81m for 2020, down 71% year on year, with cash EBITDA at PLN 1,236m, up 10% year on year. Recoveries from purchased debt portfolios amounted to PLN 1,834m, having increased 3% on 2019. Both cash EBITDA and recoveries were the highest in the Group’s history.
“2020 was an unprecedented year and the pandemic outbreak changed both people’s working and living patterns and the way businesses operate. Given those extraordinary circumstances, I consider our 2020 earnings figures as solid, although obviously much below the expectations we had at the beginning of last year,’ said Piotr Krupa, CEO of KRUK S.A. “The cash EBITDA came on the back of improved recoveries after the first lockdown period, as well as savings, including those achieved through temporary pay cuts. The effort made by the entire organisation, both with regard to savings and sacrifices, as well as effective remote work and online development, allowed the KRUK Group to maintain and even improve its cash performance,” added Piotr Krupa.
The recovery projections were revised downward in 2020, by PLN -205m, compared with an upward revision of PLN 79m in 2019. In 2020, the Group reported revenue of PLN 235m, mainly due to actual recoveries exceeding those planned for 2020. To compare, the figure in 2019 was PLN 106m.
“In 2020, because of the pandemic and especially in the first half of the year, we made downward revisions in each of our home markets, with the largest revisions in Italy and Spain. At the same time, recoveries throughout the year proved healthy, as evidenced by two parameters: a 3% year-on-year increase in recoveries from debt portfolios, and PLN 235m in revenue mainly on account of actual recoveries exceeding planned recoveries for 2020. All in all, as a result of the above factors we generated PLN 155m less in revenue compared with 2019, which shows why 2020 was a most unusual year: on the one hand, the high downward revisions of recovery projections relating primarily to the quarters right after the pandemic outbreak and, on the other, among other things, actual recoveries much above those projected for the subsequent months of 2020,’ said Piotr Krupa.
In 2020, KRUK purchased debt portfolios in Poland, Romania, the Czech Republic and Spain for PLN 456m, having invested 42% less than a year before. At the end of 2020, the Group had PLN 1bn available under credit facilities, issued one series of PLN 25m worth of bonds and redeemed PLN 88m worth of bonds. KRUK S.A. also bought back its shares, having allocated PLN 95m from its 2019 profit for this purpose. In line with the Management Board’s recommendation, in 2021 KRUK intends to pay a dividend of PLN 8 per share (approximately PLN 150m) from retained earnings.
“In 2020, we deliberately scaled down our investment activity over the period of material uncertainty triggered by the coronavirus pandemic and its consequences. Also, the availability of debt portfolios on the market was temporarily limited. We were the most active in Poland, where, among other things, we finalised the largest transaction on the market of retail debt portfolios sold by banks. Last year we reached a nearly 40% share in investments made in Poland, which is one of the best results in our history and confirms our strong position in the home market,” added the CEO of KRUK S.A. “Today, we are focusing on 2021. Our liquidity position is robust, we have good access to financing, we can issue bonds, and are ready to embark on new investment projects. Taking these considerations into account, we have recommended payment of PLN 8 per share in dividend to our shareholders. KRUK will pay out dividend for the seventh consecutive time, and intends to continue its growth while remaining attractive to investors.
Additional comments from Piotr Krupa, President of the Management Board of KRUK S.A., to 2020 results (for English please turn on the subtitles on youtube) Link
Results: Interim reports