KRUK ends first half-year with record recoveries and increased investment activity in Poland

KRUK has published its H1 2018 results:

• In H1 2018, recoveries amounted to PLN 763m, which represented 56% of the recoveries figure for the previous year. In the second quarter alone, KRUK recorded recoveries of PLN 400m, the best quarterly performance in its history.
• Net profit for H1 2018 came in at PLN 189m, down 13% year on year.
• In H1 2018, the KRUK Group invested PLN 407m in debt portfolios with a total nominal value of PLN 2.5bn. The value of investments in Q2 2018 alone reached PLN 282m, and the nominal value of purchased debt was PLN 1.9bn. Most of the investments (72%) were made in Poland.
• After the end of the first half of the year, KRUK concluded an agreement to purchase a debt portfolio from Servicios Financieros Carrefour of Spain, with a total nominal value of EUR 248m, won an auction to purchase two consumer and SME debt portfolios with a total nominal value of PLN 500m in Poland, and an auction to purchase a portfolio with a nominal value of over EUR 300m in the Italian market.
• With a net interest-bearing debt to equity ratio of 1.1x and flexible access to financing, KRUK is well positioned to increase its investment activity in Europe.
• KRUK continues to expand its Italian and Spanish operations. As at the end of June 2018, the number of KRUK employees in the two countries rose to more than 500.
• On April 27th 2018, KRUK paid another dividend of PLN 5.00 per share, i.e. PLN 94.0m in total.

On July 9th 2018, KRUK announced a review of strategic options supporting further growth of the Group. The purpose of the review of strategic options is to choose the best way to achieving the Company’s long-term objective of creating a leading player on the debt management market in Europe.

Key consolidated financial results for H1 2018

(*) Cash EBITDA = EBIT + recoveries from own portfolios - revenue from own portfolios

Our strong start into the year is no surprise. We are on track to meet our full-year target. We are particularly pleased with growing recoveries from debt portfolios, which hit PLN 763m in the first half-year, including over PLN 400m in the second quarter alone. Strong cash generation in recent years and low debt levels enabled us to again pay out a dividend of PLN 94m. We have paid dividends since 2015, with over PLN 190m distributed to shareholders over four years,” says Piotr Krupa, KRUK S.A. CEO.

“A string of events that we have seen recently will accelerate our future growth. Our success rates in debt auctions in Poland have been rising since the start of the year. The second half-year should also see increased investments outside Poland. We are also strengthening our operations – we manage the portfolios purchased in our established markets as well as in Italy and Spain with increased efficiency. In Italy, we acquired Agecredit in a transaction that will fuel the growth of one of the Group’s key business segments, which is the provision of third party debt collection services. We are in the process of analysing our long-term prospects. We have announced a strategic review to select the best possible growth path for the Group as a whole. There are still many challenges ahead,” Mr Krupa added.