Interim Report Q3 2016
July – September 2016
- Gross cash collections on acquired loan portfolios increased 10 per cent to SEK 1,075m (974).
- Total revenue increased 13 per cent to SEK 665m (590).
- Reported EBIT was SEK 233m (187) and the EBIT margin was 35 per cent (32).
- Profit before tax totalled SEK 130m (94).
- Portfolio acquisitions totalled SEK 607m (1 982).
- Basic earnings per share were SEK 1.27 (0.93). Diluted earnings per share were SEK 1.25 (0.91)
Figures in parentheses refer to Q3 2015
30 September 2016
- Carrying value on acquired loan portfolios totalled SEK 11,658m (11, 279).
- Gross 120-month ERC (Estimated Remaining Collections) totalled SEK 19,450m (19,367).
- Total capital ratio improved to 15.45 per cent (15.21).
- CET1 capital ratio was 12.63 per cent (12.32).
Figures in parentheses refer to 31 December 2015.
Events during the quarter
- Hoist Finance acquired a Madrid-based master servicing company, strengthening its position in the Spanish market.
- Taking advantage of favourable market conditions, Hoist Finance expanded its EMTN programme with the issue of an additional EUR 50m. The bond loan totals EUR 300m following the issue.
Statement by the CEO
Strengthened position in the Spanish market and acquisition of other asset classes in Italy
Hoist Finance’s operating activities continue to perform well, while we also continue to make investments and advance our positions for the future. Accordingly, we reported a strong performance in the third quarter with an operating profit (EBIT) that was up more than 20 per cent year-on-year. Over the course of seven quarters since Hoist Finance was listed on 25 March 2015, we have increased revenues by more than 30 per cent and our profit before tax by more than 150 per cent. Looking ahead, I do not foresee any change in our stable and strong rate of growth.
Strengthened position in the Spanish market
In September, we had the pleasure of announcing the acquisition of the Madrid-based master servicing company Optimus. This transaction was a natural progression on our first portfolio acquisition in Spain, which we announced in June. By acquiring this company – which enables the internal management of acquired loans and gives us a local presence – we are making substantial advancements of our positions in the Spanish market, which is one of the larger markets in Europe. Using its expertise, energy and commitment, the company will be able to support and accelerate our goal of becoming the leading business partner to financial institutions in the Spanish market.
Acquisition of SME portfolio and portfolio of secured assets in Italy
During the quarter, Hoist acquired a portfolio of secured assets in Italy, and, after the end of the quarter, a SME portfolio was acquired in the same country. Our strategy remains in place, but in order to advance on our vision of becoming the leading debt-management partner to banks and financial institutions, we are expanding our focus to other asset categories, including secured loans and loans to SMEs. We are doing this in the interest of being able to continue to meet our partners’ needs and deliver value to both our shareholders and partners.
Strong earnings at the regional level and the acquisition of other asset classes
At the regional level, both Region West Europe and Central East Europe reported improved earnings (EBIT) and operating margins compared with the year-earlier period. Earnings in Region Mid Europe were slightly lower year-on-year, which was attributable to a seasonally strong quarter in 2015.
Popular and well-received Capital Markets Day
We organised our first Capital Markets Day during the quarter, the aim of which was to describe our view of the non-performing loan market and the role we play there. This market, highly relevant to Hoist Finance, is expected to grow by 7 per cent annually as more and more banks realise the value of making their balance sheets more effective and divesting non-performing assets. Through specialisation and effective procedures and processes, we are able to offer a price for these portfolios that exceeds the sum that the bank itself could
recover using its internal processes – creating a win-win situation for ourselves and our partners, and serving an important role in the financial ecosystem.
Creating shareholder value
In the annual report, I wrote that we will continue to remain focused on creating shareholder value. Our aim is to increase knowledge and understanding of Hoist Finance by maintaining clear and transparent communication in conjunction with our interim reports and Capital Market Days.
Another element involves delivering on our communicated goals and fulfilling our strategy, which we will continue to do. We had just over 1,500 shareholders at the beginning of the year; this number increased to nearly 3,500 by the end of the quarter. I would like to take this opportunity to welcome all of our new shareholders and to say that we have only just begun this long and exciting journey.
The fourth quarter is seasonally the strongest in terms of portfolio acquisitions. This is also verified by the beginning of the quarter, in which acqusitions have exceeded those from the full third quarter. Our target of achieving a 2016 acquisition volume in line with the past three years remains in place.
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 interim report is such that Hoist Finance is obligated to publish under the EU Market Abuse Regulation and the Swedish Securities Market Act.
This information was submitted for publication on 28 October 2016 at 8:00 AM CET.
Group Head of IR
Tel: 46 8 555 177 19
About Hoist Finance
Hoist Finance is a leading debt restructuring partner to international banks and financial institutions, offering a broad spectrum of advanced solutions for acquisition and management of non-performing unsecured consumer loans. Hoist Finance operates through eleven in-house collection centers across Europe, complemented by local external debt servicing partners. The total carrying value of Hoist Finance’s acquired loans was approximately SEK 11.3 billion as per 31 December 2015. The parent company Hoist Finance AB (publ) is listed on Nasdaq Stockholm Mid-Cap list and its subsidiary Hoist Kredit AB (publ) is a regulated “Credit Market Company” under the supervision of the Swedish Financial Supervisory Authority (Sw. Finansinspektionen). In Sweden, the company offers internet-based savings deposit services through HoistSpar, with around 85,000 accounts.