KRUK steps up investments in Q3

KRUK S.A. has published its financial results for the first three quarters of 2018:

• Net profit for Q1−Q3 2018 reached PLN 279m, representing 95% of the full-year figure reported for 2017, with net profit margin at 31%. In Q3 alone net profit amounted to PLN 90m.
• Recoveries in the past three quarters totalled PLN 1,144m, that is 84% of the figure posted for the whole of 2017. In Q3 2018, recoveries from purchased debt portfolios came in at PLN 381m.
• In the first three quarters of the year KRUK invested PLN 1,055m in 141 portfolios with a total nominal value of PLN 6.2bn. In geographical terms, Poland accounted for the largest share of the investments (PLN 521m), followed by Italy (PLN 267m), Spain (PLN 166m), and Romania (PLN 70m). In Q3 2018, investments amounted to PLN 647m and the nominal value of purchased debt was PLN 3.7bn.
• Still high, but more rational, level of competition, enabled KRUK to significantly increase investments in Poland. In Romania, after a quiet beginning of the year, banks returned to the market with new transactions. The supply of debt portfolios in Italy and Spain remains strong.
• In October 2018, KRUK made a private placement of bonds worth PLN 35m. The bonds mature in five years and bear interest at 3M WIBOR plus 3.50pp. They were offered to institutional investors. It was the first bond issue conducted by KRUK since June 2017 (when KRUK issued five-year euro-denominated bonds with a fixed interest rate of 3.59%) and the first one denominated in the Polish złoty since December 2016 (when KRUK issued five-year bonds carrying interest at 3M WIBOR plus 3.15pp).
• KRUK’s financial standing offers ample room for further investments in debt portfolios. At the end of September 2018, its net debt to equity ratio was 1.3x (end of June: 1.1x).

Key consolidated financial results for Q1–Q3 2018

(*) Cash EBITDA = EBIT + recoveries from purchased debt portfolios - revenue from purchased debt portfolios.

“This was the second best quarter in our history in terms of the investment amount. Only in Q2 2016 this amount was higher, but then the PRESCO portfolio accounted for a significant part of the figure. We invested more in Poland, where the competitive pressure has lessened. We also invested heavily in Italy and Spain, where we are constantly working to enhance the quality of our operations. Our investments also increased in Romania, as the market revived after a rather slow beginning of the year. The supply is expected to peak again in the last quarter and we want to continue expansion both in Poland and abroad. We are well on track to meet our targets for recoveries and net profit, set at the beginning of the year. Additionally, we are still working on a revision of our strategic options,” says Piotr Krupa, President of KRUK S.A.