B2Holding ASA: Fourth quarter results with stable Gross Cash Collection and Cash EBITDA2020-02-28
(Oslo, 2020-02-28) B2Holding today reports stable and solid gross cash collection and cash EBITDA combined with reductions in leverage and is back in line with original RCF covenants.
"In fourth quarter 2019 we continued implementation of the new strategy. Within secured portfolios our focus has been on improving operations by adding more specialized resources and implement new recovery strategies. Our unsecured portfolios continued to perform well, and we see a positive trend in main markets. Leaving behind a year with some challenges in the Group, I am confident that the new strategic direction will improve our profitability, strengthen our platforms and deliver continuing shareholder value going forward," said Erik J. Johnsen, CEO of B2Holding ASA.
Fourth quarter financial highlights: * Gross cash collection of NOK 1,295 million (1,169) - up 11% y-o-y
* Operating profit of NOK 291 million (326) - down 11% y-o-y
* Cash EBITDA of NOK 963 million (833) - up 16% y-o-y
* ERC at end of month NOK 23,809 million (22,262) - up 7% y-o-y
(Comparable numbers for Q4 2018 in brackets)
B2Holding had total operating revenues of NOK 819 million in the fourth quarter, an increase of 9 per cent from the same quarter last year. Gross cash collection increased by 11 per cent to NOK 1,295 million.
Cash EBITDA was NOK 963 million, an increase of 16 per cent compared to the fourth quarter 2018, while operating profit (EBIT) was reduced by 11 per cent to NOK 291 million.
Profit after tax was NOK 90 million, a decrease of 42 per cent, leading to earnings per share of NOK 0.22, compared to 0.38 in the fourth quarter last year.
Leverage Ratio at end of quarter was 2.86x, down from 3.53x last year, verifying a solid debt service capacity. B2Holding ASA was in compliance with the original RCF covenants by end of Q4 2019, ahead of the bank waiver expiry Q1 2020: Equity ratio at 25.2 per cent and Total Loan to Value at 74.2 per cent at end of quarter. Furthermore, the RCF was amended on the 28 February 2020 and will have more flexible covenants going forward.
B2Holding invested NOK 566 million in new portfolios in fourth quarter. The portfolios were mainly purchased in Northern Europe, and 98 per cent of the purchases in the quarter were unsecured portfolios. B2Holding has acquired portfolios totalling NOK 4.0 billion in 2019, including the Group's share of portfolios acquired and held in joint ventures, and grown the total gross ERC by 7 per cent to approximately NOK 23.8 billion.
B2Holding continues to improve operations and cost efficiency will be a main focus area in 2020. Cost to collect was down 0.5 percentage points quarter on quarter to 24.0 per cent in Q4 2019, and apart from some seasonality it is trending downwards with potential for further reduction going forward.
At the end of the fourth quarter, B2Holding has NOK 2.1 billion available for investments, adjusted for deferred payment for portfolio purchases of NOK 121 million, in addition to a strong operating cash flow from collections of purchased loan portfolios.
Going forward, B2Holding sees a good market for portfolio acquisitions, with good pipeline visibility. The Group continue to evaluate more co-investments in existing markets, which is expected to further increase revenue from Asset Under Management (AUM).
For further information, please see the Q4 2019 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, Friday 28 February at 08:30 CET, and a webcast of the presentation can be viewed here: https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20200228_1
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".