KRUK Group's financial performance beats market expectations
KRUK Group summary and financial highlights following the first three quarters of 2013:
- In Q3 2013, the KRUK Group's net profit reached PLN 29.5m and was 16% higher than the consensus forecast of analysts, which had put it at PLN 25.5m.
- In the first three quarters of the year, the KRUK Group's net profit amounted to PLN 80m, up 48% year on year, and was almost as high as the net profit earned by the Group for the whole of 2012. In Q3, the KRUK Group posted record-high recoveries from debt portfolios, at PLN 143m. In the first three quarters of 2013, recoveries amounted to PLN 383m, up 15% year on year, and represented 85% of the figure for the whole of 2012.
- In the first three quarters of 2013, the Group's expenditure on debt portfolio purchases totalled PLN 285m, up 51% year on year. The Group purchased 46 debt portfolios with a total nominal value of PLN 2.8bn, primarily from banks, including 13 portfolios in Poland, 20 in Romania and 13 in the Czech Republic and Slovakia.
- The fair value of the debt portfolios purchased since the launch of KRUK's operations was PLN 1,040m as at the end of Q3 2013, up 32% relative to the end of Q3 2012.
- In Q1-Q3 2013, the gross profit on debt collection outsourcing was PLN 16.1m, having grown 101% year on year, which was driven by strong performance of the corporate debt collection outsourcing segment.
- From January to the end of October 2013, the KRUK Group issued bonds with an aggregate par value of PLN 225m. Due to significant investor interest in the bonds, the Group commenced work on a public bond offering addressed to a wide group of investors. On November 8th 2013, the Polish Financial Supervision Authority approved the prospectus for a PLN 150m bond issue programme.
KRUK Group – consolidated financial highlights
| PLNm | Q1-Q3 2013 | Q1-Q3 2012 | change yoy | 2012 | % of 2012 result |
|---|---|---|---|---|---|
| Revenue | 302.3 | 245.1 | 23% | 343.0 | 88% |
| EBIT | 118.1 | 96.7 | 22% | 136.7 | 86% |
| Cash EBITDA* | 244.3 | 216.6 | 13% | 292.3 | 84% |
| Net profit | 80.1 | 54.1 | 48% | 81.2 | 99% |
*Cash EBITDA = EBITDA + recoveries from purchased debt portfolios - revenue from collection of purchased debt
Discussion of results:
"The figures published by us confirm the KRUK Group's high operating efficiency, both in the area of cooperation with our Clients and collection of debt purchased for own account. In Q3 2013, KRUK posted record-high recoveries from purchased debt portfolios, which grew by 23% year on year and 18% quarter on quarter. In Q3 2013, our costs as % of recoveries fell to 25%, from 30% in Q2 2013," says Mr Piotr Krupa, President of the KRUK S.A. Management Board.
It should also be noted that the Group's net profit of PLN 80m after the first three quarters of 2013 represents as much as 99% of the net profit earned in the whole of 2012. In Q3 2013, the KRUK Group posted a net profit of PLN 29.5m on the back of revenue of PLN 103.3m. This means a year-on-year increase in the Group's net profit and revenue of 35% and 21%, respectively.
"In the first three quarters of 2013, we actively purchased debt portfolios, investing more than PLN 285m, which was 51% more than in the same period of 2012. Expenditure on debt portfolios was higher in all markets where the Group operates. In Poland, it amounted to PLN 182m, having increased by 34%, while in Romania it stood at PLN 80m, having grown by 98%. In the Czech Republic and Slovakia expenditure on debt portfolios amounted to PLN 23m and was up by 76% relative to the first three quarters of 2012," says Mr Krupa.
In Q3 2013, the KRUK Group launched its largest ever advertising and promotional campaign addressed to debtors. The campaign is run simultaneously in Poland and Romania. The campaign presents positive stories of three persons who resolved their problems with excess debt and encourage others to contact KRUK. The campaign covers traditional media, including the TV, radio and press, as well as the Internet.
In the first three quarters of 2013, KRUK's debt collection outsourcing business generated a gross profit of PLN 16.1m, which was higher by 101% year on year. The nominal value of debts accepted for collection in the first three quarters of 2013 was PLN 2.4bn. The higher gross profit of the debt collection outsourcing business in the first three quarters of 2013 was largely due to the finalisation of the process of collection of a large corporate debt in Q1 2013, as well as strong performance of the consumer debt segment.
In the first three quarters of 2013, RD ERIF BIG S.A. (the credit reference agency) generated revenue of PLN 4.7m, up 43% year on year. The RD ERIF BIG's database, audited by KPMG Audyt, contained 1,595 thousand records as at October 1st 2013. The number of records in the database grew by 22% from the end of Q3 2012 and by 18% from the beginning of 2013.
In the first three quarters of the year, the NOVUM loan segment generated revenue of PLN 3.3m, an improvement of 39% relative to the corresponding period of 2012. In the first three quarters of 2013, nearly 7.3 thousand loans were advanced, in line with the number of loans advanced in the whole of 2012.