KRUK's Q3 2020 estimated net profit at PLN 54m, and Q1-Q3 preliminary cash EBITDA at PLN 915m

On October 29th 2020, the KRUK S.A. Management Board announced that the KRUK Group's preliminary estimated consolidated net profit for Q3 2020 was PLN 54m. On a cumulative basis, for the period from January 1st to September 30th 2020, the figure is PLN 34m. The KRUK Group's preliminary estimated cash EBITDA for Q3 2020 is PLN 324m, and for the period from January 1st to September 30th 2020 is PLN 915m. The estimated amount of the profit was affected by the resolution to update the plans for distribution of income from the Company’s subsidiaries, which resulted in recognition of a deferred tax liability of PLN 58m made by the KRUK S.A. Management Board on October 29th.  The liability is to be recognised in connection with the expected distribution of income from the Group's investment companies to KRUK S.A. over the next 36 months. The income distributions have been assumed based on expected cash flows from the Company’s subsidiaries of KRUK S.A. The Liability is the main component of the deferred tax in the Group for the third quarter, which is estimated to total PLN 60m.  The assumed higher distribution of some of the funds from the investment companies to KRUK S.A. is more profitable to the Group in the long term, although it affects the profit in the short term. The net profit estimate is subject to change. The KRUK Group's final results for Q3 2020 will be announced on November 5th 2020. 

“Taking a long-term perspective, we have decided to increase the pay-outs of income from the Company’s subsidiaries, which resulted in recognition of a deferred tax liability of PLN 58m, which, in the short term, will weigh on the estimated Q3 profit but will be more profitable to the Group in the long term. A major part of the deferred tax amount results from our assumption that in the coming 36 months we will distribute income from the Group's investment companies to KRUK S.A.,” says Piotr Krupa, President of the KRUK S.A. Management Board. ”The estimated effect of this arrangement on the KRUK Group's consolidated net profit is material. Taking into account the estimated total value PLN 60mln of deferred tax in the third quarter, the preliminary estimated consolidated net profit for Q3 is PLN 54m, and cash EBITDA is PLN 324 m. I believe this is a good result given the pandemic. In addition, it seems that we have generated record high cash EBITDA for the first three quarters of 2020, up 8% year on year. I am confident that the Group's financial condition and liquidity are sound, but we want to prepare for what is ahead of us to be able to actively invest in debt portfolios when the supply on the markets rises,” Piotr Krupa adds.