Hoist Finance Interim report Q2 2017
Strong results despite increased investments for future growth and profitability
April – June 2017
- Total revenue increased 4 per cent to SEK 683m (654).
- Profit before tax excluding items affecting comparability1) totalled SEK 171m.
- Profit before tax totalled SEK 104m (125).
- Return on equity excluding items affecting comparability1) was 20 per cent.
- Return on equity was 15 per cent (16).
- Diluted earnings per share excluding items affecting comparability1) amounted
to SEK 1.62.
- Diluted earnings per share amounted to SEK 0.83 (1.22).
- Carrying value on acquired loan portfolios totalled SEK 13,079m (12,658).
- The total capital ratio was 19.73 per cent (16.76) and the CET1 capital ratio was
12.99 per cent (12.46).
1) Key figures have been adjusted to show underlying earnings excluding items affecting comparability, totalling SEK 63m including tax, which arose in connection with the repurchase of subordinated loans and outstanding bonds during second quarter 2017.
Figures in brackets refer to the second quarter 2016 for profit comparisons and to 31 December 2016 closing balance for balance sheet items.
Events during the quarter
- Hoist Finance issued EUR 80 million in Tier 2 capital under the Company’s EMTN programme.
- Moody’s upgraded the credit rating for Hoist Kredit AB (publ) to Investment grade (Baa3/Prime-3).
- Hoist Finance began the recruitment process for a new CEO. Jörgen Olsson will be proposed Deputy Chairman.
Statement by the CEO
Continued stable growth and profitability trend
Our disciplined investment strategy continues to generate stable and profitable growth.
Total revenues for the second quarter totalled SEK 683m, a 4 per cent increase compared with the same period last year. Excluding items affecting comparability related to the repurchase of subordinated loans and bonds, the quarter’s profit before tax increased 37 per cent year-on-year to SEK 171m. Return on equity, excluding items affecting comparability, was 20 per cent during the second quarter, which demonstrates both our operational efficiency and our capital efficiency.
Successful bond market issue and upgraded credit rating
During the quarter our credit rating was upgraded, an event that both strengthens our brand and supports our continued growth through lower funding costs. We also conducted a successful Tier 2 capital issue and simultaneously repurchased outstanding subordinated liabilities. The transaction reduces our funding costs and was carried out as a part of our long-term strategy to broaden and diversify our financing. As a result of the transaction, Moody’s upgraded our long- and short-term credit rating to Baa3/Prime-3.
Region West accounts for the Company’s largest portfolio investments this quarter. This demonstrates the size of the British market and the strong position we have built since 2012. Also in terms of profit for the quarter, the region’s profitability continues to improve.
In Region Mid, activity remained high in the Italian market - the primary driver of portfolio growth during the quarter. The Italian transaction market was among the largest in Europe during 2016. In spite of this, only ten per cent of non-performing loans in the Italian banking system were sold - meaning that the Italian market will remain significant.
In Region Central East growth remained slow in the second quarter. We continue our efforts to improve cash flow from existing portfolios and to make comprehensive efficiency improvements. This enables us to continue to deliver strong results while also preparing us to address future growth opportunities.
During the quarter I announced my intention to step down as CEO. After much consideration, I decided that this is the right time to find a successor to continue driving our growth journey. I have held senior positions at Hoist Finance for nearly eight years and, together with our talented employees, I have worked to develop Hoist Finance into the strong and stable company it is today. In the past three years alone we have more than doubled our earnings, conducted a successful IPO and built a solid platform as a leading debt restructuring partner to banks and financial institutions in ten European countries.
The market continues to grow steadily and our growth forecast for this year and coming years remains in place. I look forward to welcoming my successor to a company with a disciplined investment strategy, a value driven corporate culture and a strong growth trajectory. My aim is to support our strive towards our vision and our long-term development as a board member and as one of the major shareholders.
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.
Presentation of the interim report
Jörgen Olsson, CEO and Pontus Sardal, CFO will present and comment the report at a teleconference on July 28, starting at 9:30 AM (CET).
The presentation can be followed at https://www.financialhearings.com/event/9859.. To participate by phone, call SE: +46 8 566 425 09 UK: +44 203 008 98 06 US: +1 855 831 59 45
For further information please contact:
Michel Jonson, Group Head of IR
Telephone: +46 (0)8 555 177 19
This information is information that Hoist Finance AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 8:00 A.M. CET on July 28, 2017.
About Hoist Finance
Hoist Finance is a trusted debt restructuring partner to international banks and financial institutions. We are specialised in serving banks in handling non-performing loans, and supporting individuals in becoming debt free. Through expertise and rigorous compliance we earn the banks’ trust. Through respect, honesty and fairness we earn the trust of our customers.