KRUK surpasses its best full-year results after H1 2021
Today the Management Board of KRUK S.A. has published the Group’s earning figures for the first half of 2021, which are in line with initial estimates. The KRUK Group reported a net profit of PLN 396m, up 2,148% year on year. Recoveries from purchased portfolios amounted to PLN 1,065m, up 19% year on year. Cash EBITDA came in at PLN 762m, an increase of 29% year on year. The net profit, recoveries and cash EBITDA were the best ever half-year results posted by KRUK, and the profit for the first half of 2021 exceeded even the full-year figure.
“The first six months of the year were marked by a string of successes – recoveries from purchased portfolios, cash EBITDA and net profit. We recorded solid recoveries across the Group, especially in Poland and Romania, but also in Italy and Spain. As an entrepreneur who established KRUK back in 1998, I am aware of the importance of consistency and continuous improvement in business. As an organisation we have been accumulating knowledge and experience for 23 years now, and for 19 years we have been purchasing and recovering debt on our own account. We are among the most experienced players in our industry and, most importantly, we are successful in virtually every market where we operate. We work hard for the success and are pleased that our efforts are yielding fruit,” said Piotr Krupa, CEO and President of the Management Board of KRUK S.A. “I am glad that each business line in all of our markets is profitable and I believe that this positive trend in recoveries should continue in the coming quarters.”
In the first half of 2021, the KRUK Group’s revenue totalled PLN 894m, having increased by 96% year on year. Revenue from purchased debt portfolios was PLN 812m, up 114% year on year. The growth was driven by recoveries from debt portfolios coming in above the target and by an upward revaluation of the recovery projection totalling PLN 135m, relative to PLN -193m in the first half of 2020. Differences between actual and planned recoveries, disclosed jointly with a decrease in revenue on early collections in collateralised cases and payments from the original creditor, totalled PLN 213m in the first half of 2021, compared with PLN 87m the year before.
"I keep repeating that KRUK’s results should be analysed looking back a few quarters or even a year from now. This is also the case today, where a conservative approach to making upward projection revaluations during the pandemic was reflected in the performance figures for the second quarter of 2021. In the second quarter, we recorded a revaluation of recovery projection of PLN 117m and recoveries substantially in excess of our accounting forecasts. Looking at our history, reports and trends, a revaluation of recovery projections, usually an upward one, and the revenue from the difference between actual and planned recoveries have become a fixture in our performance figures.
In the first half of 2021, KRUK invested PLN 644m, 705% more than a year earlier, mainly in unsecured retail debt portfolios in Poland, but also in Spain, Romania, the Czech Republic, Slovakia, and Italy.
“We are also pleased with our investments in the first half of the year, but we should not forget that it is usually the second half of the year that sees stronger volumes. Today, we are ready to purchase debt portfolios on each of the markets where we operate. Naturally, we want to be No. 1 in Poland and Romania, but Italy and Spain are the markets where we have had some five or six years of experience and post increasingly better results. We are holding talks with banks and other entities on each of our markets,” said Piotr Krupa. “Our financial condition is robust and stable, we have solid financing sources and, in addition, on September 3rd 2021 the PFSA approved our 8th Bond Issue Prospectus. This year, we have issued bonds with a nominal value of PLN 485m for retail and institutional investors and are working to increase the availability of bank financing. Our appetite for new portfolios is big, and the current market environment allows us to achieve our budget objectives, and sometimes event to exceed them,” said Piotr Krupa, CEO of KRUK S.A.