Current Report No. 13/2020: Preliminary estimated financial results of the KRUK Group for Q1 2020

Having been notified, on May 22nd 2020, of the preliminary estimate of the consolidated net result of the KRUK Group (the “Group”) for Q1 2020, the Management Board of KRUK S.A. (the “Company”) had decided to announce the results to the public. 
The preliminary estimated consolidated net loss of the KRUK Group for Q1 2020 amounts to PLN 62m. When estimating the preliminary net result, the Company made an accounting review of expected recoveries taking into account the expected effect of the COVID-19 pandemic. In effect, the Group posted a downward revaluation of portfolios for a total amount of PLN -125m in Q1 2020. The revaluation reflects the decline in expected recoveries observed since the end of March, attributable to such factors as restricted activity of field consultants, reduced access to payment channels (post offices, payment intermediaries), as well as limited activity of courts and enforcement officers.
The Company has made a preliminary estimate of the KRUK Group’s cash EBITDA* for Q1 2020 at PLN 326m, up 15% on Q1 2019. 
The KRUK Group is taking steps to minimise the adverse effect of COVID-19 on its assets and financial performance, and to prepare the Group to resume full investment and operating activity once the pandemic subsides. 
The Group’s finances and liquidity position as at the end of Q1 2020 and as at the date of issue of this report are stable. 
The KRUK Group’s equity is high (PLN 1.959m as at December 31st 2019) and its debt is low (2,3 x net debt/cash EBITDA as at December 31st 2019). As at March 31st 2020, the KRUK Group’s cash and cash equivalents amounted to PLN 236m. The undrawn amount of lines of credit was PLN 712m as at March 31st 2020.
The finally determined financial results will be disclosed in the consolidated report of the KRUK Group for Q1 2020, scheduled for issue on May 28th 2020. * Cash EBITDA = EBITDA – revenue from purchased debt portfolios + recoveries from purchased debt portfolios