Net profit of PLN 100m and investments of over PLN 300m posted by the KRUK Group in H1 2014, and entry into the German market

The KRUK Group (WSE ticker: KRU), operating in the debt management market in Central Europe, again delivered record-high performance in H1 2014:

  • PLN 100.1m in net profit (102% of the 2013 full-year figure) – up by 97% year on year
  • PLN 128.6m in operating profit – up by 69% year on year strong recoveries from purchased debt portfolios of PLN 360.4m (67% of recoveries posted for the entire 2013) – up 50% year on year expenditure on debt portfolios totalled
  • PLN 313.3m, including PLN 230m on a mortgage debt portfolio purchased from Getin Bank in Q1; the H1 2014 investments represent 85% of the total expenditure incurred in 2013
  • In August 2014, the KRUK Group executed a deed of incorporation of KRUK Deutschland GmbH in Berlin as the first step towards expanding its business into the attractive German market.

KRUK Group – consolidated financial highlights

PLNm H1 2014 H12013 H1 2014/H1 2013 change 2013 % of 2013 result
Revenue 263.7 198.9 +33% 405.6 65%
Operating profit (EBIT) 128.6 76.0 +69% 152.9 84%
Cash EBITDA* 253.4 148.3 +71% 344.3 74%
Net profit 100.1 50.7 +97% 97.8 102%


*Cash EBITDA = EBITDA + recoveries from purchased debt portfolios - revenue from collection of purchased debt

In Q2 2014, the KRUK Group reported a record net profit of PLN 60.1m, which is nearly twice the figure posted in the same period last year. At PLN 206.6m, recoveries from purchased debt portfolios were also record-high in Q2 2014, having grown 70% year on year.

“In the first half of 2014 alone we delivered a net profit in excess of PLN 100m, which is better than the full-year figure for 2013 − itself a record year. We owe the outstanding net result to the very strong performance in the second quarter of the year. Net profit almost doubled year on year in Q2 2014, to over PLN 60m. Recoveries from purchased debt portfolios, of over PLN 206m, were strong as well. We also recorded first recoveries from the mortgage debt portfolio purchased from Getin Noble Bank in March 2014.

The very strong performance attests to the KRUK Group's high operational effectiveness and strengthens the Group's position on the consumer, corporate and mortgage debt market, both domestically and internationally. We have continued with our information campaign directed at debtors, encouraging them to contact KRUK to agree on the options for clearing their debts. This strategy is giving us a competitive advantage and is a real performance driver. The solution we promote of amicable settlements involving the repayment of debt in manageable instalments is increasingly popular, has a positive effect on our performance and is powering our business success,” - explained Piotr Krupa, President of the Management Board of KRUK S.A.

New markets

“One of the key events in the third quarter was the establishment of our German subsidiary, KRUK Deutschland GmbH, in August 2014. We have thus launched operations in a new foreign market, which, compared with our home market, is four times larger in terms of value of consumer loans advanced and substantially larger in terms of expenditure incurred on debt portfolios. We consider the competitive environment and the size of the German market to be major challenges, but they are also offering us some very attractive prospects for growth in a developed market. We continue to analyse our options, and we have selected several other markets with sizeable consumer loan segments, including Spain, Portugal, Turkey, UK, Italy, and Brazil. However, this does not mean that we have given up on other foreign markets, as our list may be further extended,” Mr Krupa said.

Debt purchase market in H1 2014

The nominal value of retail portfolios sold in H1 2014 was PLN 4.4bn (incl. PLN 3.5bn in unsecured consumer debt portfolios), sold at the average price of 11.5%; the corresponding figures for mortgage portfolios were PLN 0.9bn and 28.6%, respectively. In Romania, the nominal value of and expenditure on debt portfolios in H1 2014 were higher than in the entire 2013, which was chiefly attributable to sale of a large mortgage-back debt portfolio (nominal value above PLN 1.7bn). The transaction also fuelled significant increase in average debt prices. In H1 2014, in nominal terms the retail debt market in the Czech Republic and Slovakia remained stable at approximately PLN 1.0bn, attributable in almost equal parts to the Czech and Slovakian markets.

“A number of new auctions for debt portfolios, scheduled to close in H2 2014, were announced in Q2 2014. We are set to remain an active participant in debt auctions in Poland, Czech Republic, Slovakia, and Romania. The mortgage and corporate debt market is also opening in Romania, which we see as another area of opportunity. We would also like to shortly finalise our first debt purchase transaction in Germany,” Mr Krupa added.

Credit management business

KRUK's credit management business contributed PLN 16.3m in revenue, generating a gross profit of PLN 6.4m in H1 2014. The nominal value of debts accepted for collection was PLN 1.4bn in the period. KRUK's credit management business is stable and generates steady revenue streams.


As at the end of June 2014, the KRUK Group's combined credit facilities amounted to PLN 470m (with PLN 294m already drawn), while the value of its bonds in issue was PLN 522m. In H2 2014, the Group is to redeem bonds with a value of PLN 77m. As at the end of H1 2014, the Group's net interest-bearing debt was PLN 759m, compared with PLN 652m as at the end of H1 2013. Debt ratio (net interest-bearing debt to equity) amounted to 1.4 as at the end of H1 2014.

New logo

The KRUK Group is launching a new logo to reinforce its positive attitude towards debtors, with the existing symbol of KRUK preserved as the logotype enjoying by far the widest brand recognition (43%) in the debt management market.

“After ten years, we have decided to improve our existing logotype. We want it to even better reflect our consumer-friendly approach to debtors and our recognition of customers as equal partners. The new colour scheme and modified shape symbolise our professionalism, openness, innovativeness, effectiveness, flexibility, and empathy. These are the values the KRUK Group stands for,” Mr Krupa added.

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