KRUK Group’s 2023 net profit exceeds PLN 1bn

Today, the Management Board of KRUK S.A. has released KRUK’s financial results for the full year 2023. The Group’s net profit for 2023 reached PLN 1,013m, marking a 26% increase year on year, and cash EBITDA stood at PLN 2,104m, a 16% rise from the previous year. Both figures represent the highest full-year results in the Group’s history. In the fourth quarter of 2023 alone, net profit came in at PLN 255m, a 100% increase year on year, with cash EBITDA for the period at PLN 484m, showing a 9% year-on-year growth. Recoveries from purchased debt portfolios for the full year 2023 stood at PLN 3,062m, up by 17% year on year, and investments in new debt portfolios amounted to PLN 2,972m, marking a 29% increase year on year.

‘2023 was a successful year, marking KRUK’s 25th anniversary. For me, these past 25 years have been a period of intense work, consistent organic growth, continuous improvement and – in recent years – strides in Lean and digital transformation. I’m delighted to say that as a result of these efforts, we have achieved a net profit exceeding PLN 1bn for the first time in our history. Strong recoveries surpassing PLN 3bn resulted in a cash EBITDA of PLN 2.1bn. The majority of our investments and recoveries, i.e. as much as 74% and 56%, respectively, originated from foreign markets, highlighting the international reach of our operations. We saw particularly strong growth in KRUK’s activities in the Italian and Spanish markets throughout the past year,’ noted Piotr Krupa, CEO and President of the Management Board of KRUK S.A.

At the end of 2023, the Group held assets of PLN 9.9bn, a 29% increase year on year. The carrying amount of the Group’s investments in debt portfolios was PLN 8.7bn and accounted for 87% of its assets. Equity rose 17% on the end of 2022, to PLN 3.8bn at the end of 2023. As at the end of 2023, the Group’s net financial debt was PLN 5.1bn, compared with PLN 3.7bn in 2022. The net debt to cash EBITDA ratio was 2.4 at the end of 2023, compared with 2.1 at year-end 2022.

‘These record results highlight KRUK’s solid business foundations and strong market position. We capitalised on a favourable economic environment in the debt market, investing nearly PLN 3bn last year. Over the past three years, we have acquired portfolios totalling PLN 7bn, essentially doubling KRUK’s investments from the initial purchase in 2003 to 2020, reaching a total of PLN 14.7bn invested in portfolios with a nominal value of PLN 118bn by the close of 2023. At the same time, total recoveries over the last two decades have amounted to PLN 18.5bn. The cash we generate, along with access to bank loans and bond issues both in Poland and abroad, have enabled us to execute our ambitious growth plans in recent years. This also led to our net debt to cash EBITDA ratio rising to 2.4 at the end of 2023. While this ratio could increase with further investments, we aim to keep it significantly below our covenants,’ said Piotr Krupa, CEO and President of KRUK S.A.

The KRUK Group sustained a strong representation of women in senior managerial roles at 58%, compared with 62% in 2022, and a low employee turnover rate of 11.1%, compared with 13.4% in 2022. KRUK also continued financial education initiatives, including the Day Without Debt project and numerous media publications. In December 2023, KRUK signed an agreement to acquire a forward flow portfolio in France, valued at up to EUR 120m in nominal terms, in line with its ongoing growth strategy.

‘Such remarkable results would not have been possible without our exceptional team of 3,400 dedicated KRUK employees. Our committed and supportive organisation encourages us to focus on continuous improvement and the enhancement of our operations in the core business line of unsecured retail debt, drawing valuable insights from our past experiences. In line with this approach, we signed our first debt portfolio purchase agreement in France towards the end of 2023. As an initial step, we are keen on observing and learning, reserving further expansion decisions until we ascertain the market’s potential. Like me, KRUK is committed to long-term objectives. We invest and refine our operations for the years and decades ahead, recognising that our assets yield results over the long term. The investments made at KRUK’s inception, still generating cash after 20 years, stand as a testament to that. Our massive investments of recent years will yield results in the years to come,’ Mr Krupa added. ‘For investors, since our stock exchange debut, the rate of return on KRUK S.A. shares has exceeded 1,100 percent. In addition, KRUK regularly distributes dividends to its shareholders, having paid out a total of PLN 1.1bn to date. We are in it for the long haul, reflecting on the past 25 years, including our 12 years on the Warsaw Stock Exchange, and looking ahead to the next 25 years’.

The full unaudited report is available here

The audited financial data will be disclosed in the KRUK Group’s consolidated report for 2023, scheduled for issue on 27 March 2024.