B2Holding ASA: First quarter 2020 results2020-05-07
(Oslo, 2020-05-07) B2Holding today reports stable gross cash collection and cash EBITDA in first quarter 2020.
"During the first quarter, our macroeconomic environment significantly changed with the Covid-19 outbreak. We saw the strength in our organization and its ability to ensure business continuity and limit the operational impact in a challenging situation, and I am glad to report a stable cash collection in the first quarter. Still, we prepare our response to the Covid-19 pandemic by targeting cost reductions and reduce portfolio purchases to a minimum." said Erik J. Johnsen, CEO of B2Holding ASA.
First quarter financial highlights: * Gross cash collection of NOK 1,315 million (1,248) - up 5% y-o-y
* Operating profit of NOK 255 million (350) - down 27% y-o-y
* Cash EBITDA of NOK 966 million (964) - 0% y-o-y
* ERC at end of month NOK 26,528 million (21,434) - up 24% y-o-y
(Comparable numbers for Q1 2019 in brackets)
B2Holding had total operating revenues of NOK 775 million in the first quarter, a decrease of 3 per cent from the same quarter last year.
Gross cash collection increased by 5 per cent to NOK 1,315 million, and cost to collect was up 0.9 percentage points quarter on quarter to 22.9 per cent in Q1 2020. The impact on collections have been modest during the first quarter, as March was the first month where the effects of the Covid-19 pandemic became visible.
Cash EBITDA was NOK 966 million, an increase of 0.2 per cent compared to the first quarter 2019, while operating profit (EBIT) was reduced by 27 per cent to NOK 255 million.
Profit after tax was NOK 24 million, a decrease of 77 per cent, leading to earnings per share of NOK 0.06, compared to 0.26 in the first quarter last year.
Leverage Ratio at end of quarter was 3.26x, up from 3.0x last year, mainly due to historically large currency fluctuations in first quarter. B2Holding ASA was in line with the original RCF covenants by end of Q1 2020: Equity ratio at 25.1 per cent and Total Loan to Value at 74.7 per cent at end of quarter.
B2Holding invested NOK 491 million in new portfolios in the first quarter. The portfolios were mainly purchased in Northern Europe and 97 per cent of the purchases in the quarter were unsecured portfolios. In addition to purchases, the total gross ERC is marked by the currency fluctuations and was approximately NOK 26.5 billion at end of quarter, up 24 per cent compared to first quarter 2019.
At the end of the first quarter, B2Holding has NOK 3.1 billion in liquidity reserve (formerly stated as available investment capacity) adjusted for deferred payment of portfolio purchases of NOK 64 million, in addition to operating cash flow.
The Group expects the macroeconomic environment to worsen due to the Covid-19 pandemic. Consequently, collections are expected to be reduced in the short to mid-term. There is still limited visibility on the actual net effect on collections, and thus a need to collect more data over a longer period in order to observe trends and evaluate the effects of Covid-19 on the cash flow.
Going forward, the Group will focus on improving efficiencies combined with targeted cost reductions as a response to the Covid-19 pandemic. As of now, these cost reductions amount to approximately NOK 20 million per month starting from April.
Although the short-term market outlook is uncertain, the Group believes that the NPL volumes coming to the market post the crisis will increase, causing a potentially positive effect on pricing of portfolios and increased yields.
For further information, please see the Q1 2020 presentation and report attached. *Definitions of alternative performance measures can be found in the report and presentation.
The documents are also available on the Company's website: www.b2holding.no
The results will be presented today, Thursday 7 May at 08:30 CEST, in a webcast. Due to the Covid-19 situation, it is not possible to physically attend the presentation. The webcast presentation is available through this link: https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20200228_1 Live webcast viewers who would like to ask questions at the end of the presentation must submit their written questions in the provided form in the webcast. A recorded version of the webcast will be available on-demand after the live stream is concluded.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
About B2Holding Group B2Holding ASA is a Nordic-based debt solutions provider with platforms in over 20 European countries. B2Holding has experienced significant growth since its inception in 2011 and has established itself as one of the leading European debt purchasers and a solution-oriented partner within the debt servicing industry. In 2019, B2Holding had a revenue of NOK 2,874 million and the Group employs approximately 2,500 people. B2Holding ASA is headquartered in Oslo, Norway and the B2Holding share is listed on the Oslo Stock Exchange under ticker "B2H".