Interim report January - March 2016
• Gross cash collections on acquired loan portfolios increased by 34 per cent to SEK 1,056m (791).
• Total revenue increased by 27 per cent to SEK 636m (499).
• Reported EBIT was SEK 231m (115) and the EBIT margin was 36 per cent (32).
• Profit before tax totalled SEK 123m (7).
• Portfolio acquisitions totalled SEK 648m (273).
• Basic earnings per share was SEK 1.17 (0.01). Diluted earnings per share was SEK 1.14 (0.01).
The figures in parentheses refer to Q1 2015.
31 March 2016
• Carrying value on acquired loan portfolios increased by 1 per cent to SEK 11,346m (11,279).
• Gross 120-month ERC (Estimated Remaining Collections) decreased by 1 per cent to SEK 19,221m (19,367).
• The total capital ratio improved to 15.25 per cent (15.21).
• The CET1 capital ratio was 12.34 per cent (12.32).
The figures in parentheses refer to 31 December 2015.
Statement by the CEO
Steadily delivering on our ambitious targets
A little over one year has passed since Hoist Finance was introduced on the Nasdaq Stockholm Mid Cap list and looking at our first quarter in 2016, we are firmly on track regarding both our growth and our profitability targets. Compared with the first quarter of last year, our gross cash collections have increased by 34 per cent and our EBIT margin has increased by 4 percentage points to 36 per cent.
We have also decided to introduce a new financial target, Return on Equity (ROE). Our medium-term goal is to achieve a ROE of 20 per cent – the outcome in the first quarter of 2016 was 16 per cent.
Solid acquisition volumes in the first quarter
Total acquisition volumes amounted to SEK 648m, an increase of 137 per cent compared with the first quarter of last year.
Effective as from 1 January our operational activities are divided into three regions to improve organisational efficiency and to strengthen our position. During the first quarter we have seen sound acquisition levels in all three regions.
EBIT has developed favourably at the Group level. At the regional level, Region Mid Europe and Region Central East Europe showed a strong quarter with the sound acquisition levels of 2015 generating results in gross cash collections and yielding improved EBIT through better leverage of our platform capacity. Region West Europe is behind our expectations due to delayed investments in last year’s acquisition of Compello, which has resulted in lower Gross Cash Collections and thus EBIT. In France, although the activities that we initiated have gradually improved profitability, cash collections in the first quarter fell short of our expectations. Through increased focus and activities which have been initiated during the quarter, the result is expected to increase gradually in the coming quarters, in both countries.
Strengthening Hoist Finance’s position as the leading debt restructuring partner to international banks
Hoist Finance recently announced that the company had entered into an agreement with the Bank of Greece which includes managing assets amounting to EUR 9 billion in 16 Greek banks under liquidation. Under this agreement, we are not only assisting the Bank of Greece in restructuring the Greek banking sector but also helping them and ultimately the taxpayers in recovering non-performing assets. Hoist Finance are also entering a new market with the same prudent expansion strategy as before – by first understanding a market and then leveraging that know-how to potentially increase our market presence and activities. Ultimately, the most important point of this agreement is that Hoist Finance is further strengthening its credibility and position as the leading debt restructuring partner to international banks and now also central banks.
The market for non-performing loan portfolios continues to grow steadily as financial institutions seek alternatives to achieve better returns on these assets. The first quarter supports us in our ability to reach our medium term financial targets and to generate acquisition volumes in 2016 that are in line with the previous three years.
Hoist Finance AB (publ)
Hoist Finance AB (publ) (the “Company” or the “Parent”) is the parent company of the Hoist Finance group of companies (“Hoist Finance”). The Company’s wholly owned subsidiary, Hoist Kredit AB (publ) (“Hoist Kredit”) is a regulated credit market company. Hence, Hoist Finance produces financial statements in accordance with the Swedish Annual Accounts Act for Credit Institutions and Securities Companies. In order to assess the operational performance of the debt purchasing and collection operations and to facilitate comparison with our competitors, Hoist Finance supplements its statutory financial statements with an operating income statement. The operating income statement is prepared based on the accounting and valuation principles used in the statutory financial statements, with no amendments or adjustments thereto.
The information in this year-end report has been published pursuant to the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act. This information was submitted for publication on 29 April 2016 at 8:00 AM CET.