KRUK after three quarters of 2019

On October 24th, KRUK announced its Q3 2019 financial results:

  • Q1–Q3 2019 net profit came in at PLN 245m, representing 74% of the full-year 2018 figure. Performance in Q3 2019 improved by 12% compared with Q2 2019 and deteriorated by 14% relative to the third quarter of 2018.
  • Cash EBITDA after three quarters came in at PLN 850m, including PLN 286m in the third quarter alone, i.e. 15% more than in the corresponding period of 2018.
  • Recoveries from purchased debt portfolios in the first three quarters of the year exceeded PLN 1.3bn and represented 83% of the previous year’s level. In Poland, Romania, Italy and other markets recoveries grew by 9%, 5%, 46% and 48%, respectively. In Q3 2019, KRUK reported recoveries of PLN 433m, up 14% year on year.
  • In the period January–September 2019, the KRUK Group invested PLN 392m in debt portfolios with an aggregate nominal value of PLN 4bn. In the third quarter, the expenditure amounted to PLN 83m, while the nominal value of the debt was PLN 1bn.
  • In the third quarter of 2019, KRUK issued bonds with a nominal value of PLN 25m. Thus, the aggregate nominal value of bonds issued in 2019 (public offerings and private placements) is PLN 215m. In addition, KRUK and the banks forming part of the syndicate financing the KRUK Group signed an annex under which the amount of the syndicated credit facility was increased by EUR 10m. The facility amount that may be drawn by KRUK to invest in debt portfolios is now EUR 260m.
  • With a net interest-bearing debt to equity ratio of 1.2x and flexible access to financing, the KRUK Group is well positioned to increase its investment activity in Poland, Romania and other European countries.
  • Wonga.pl, acquired by KRUK in late April 2019, had a loan portfolio with a net value of PLN 147m at the end of the third quarter of 2019. From May to September, its financial performance was in line with expectations, with revenue at PLN 27m and EBITDA of PLN 2m.


Commentary from Piotr Krupa, KRUK S.A. CEO.


At the end of the third quarter, we posted a net profit of PLN 78m and cash EBITDA of PLN 286m, up by 15% year on year. Our profit was 9% above the market consensus of PLN 71.4m, projected by six brokerage houses. At KRUK, we take a long-term perspective and we want to be a business that keeps growing while sharing profits with the shareholders.


In the third quarter, despite the seasonality effect during summer holidays on the Spanish and Italian markets, we reported solid recoveries. In these two countries, by September 2019 the recoveries exceeded the previous full-year figures. We continue to improve our operating performance in Italy and Spain and it is worth noting here that, in line with our expectations, KRUK did not make a downward revaluation of its Italian debt portfolio.

Market and investments

In Poland, the supply of debt portfolios proved to be lower than what we expected at the beginning of the year. We believe that this situation will not last long and expect a stronger supply of debt portfolios from banks in the coming quarters, especially as there is a growing number of external factors that can affect decisions made by banks. As far as the supply of debt portfolios is concerned, both on the primary and secondary markets, the end of the year is going to be a very active period. The question is how many auctions we can win. Our appetite is much stronger, but we are pleased with the strong transaction returns on the investments we have made this year.

We are very active on the Romanian market – since the beginning of the year, our investment spending has increased by 153%. Our Romanian debt portfolio is now worth PLN 987m.

The lower investment performance after the first three quarters of the year is also attributable to our consistency in scaling down investments in Italy and Spain in that period. Let me add that in the third quarter of 2018 alone we invested in Italy almost PLN 200m. We intend to consistently expand our investments in this region of Europe, which will help us increase the Group’s total expenditure.


The sound balance sheet and good access to financing is a result of our conservative debt policy. KRUK enjoys the trust of the debt market and is able to issue bonds at assumed levels. The bond issue carried out during summer holidays, which generated an over twofold oversubscription, is one of the biggest successes on the Polish public bond market in years. The amount available (undrawn) under lines of credit is PLN 789m.


Wonga’s results for the first five months after the transaction are in line with the expectations we had at the time of acquisition. The team focuses on building a low-risk customer portfolio, which is our priority, and it is in this segment that Wonga is building its business scale.


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