B2Holding ASA - Second quarter and first half year 2019 results: Growth in Gross Collection and Cash EBITDA, but quarterly result affected by one-off write-down.2019-08-30
Second quarter 2019 * Gross cash collection of NOK 1,274 million (1,032) - up 23% y-o-y
* Cash EBITDA of NOK 993 million (759) - up 31% y-o-y
* Total revenues of NOK 379 million (761) - down by 50% y-o-y
* Operating loss of NOK -69 million (356) - down by 119% y-o-y
* ERC at end of month NOK 22,595 million (20,119) - up 12% y-o-y
Leverage Ratio at end of quarter at 3.2x (3.3x), verifying that the company has a solid debt service capacity. (Comparable numbers for Q2 2018 in brackets)
B2Holding ("B2H") continued to show growth in gross cash collection and cash EBITDA in the second quarter, reflecting a stable underlying collection performance.
However, the Group reports a loss for the quarter of NOK 270 million following net actualisation/revaluation charges of NOK 421 million. These net charges mainly relate to one-off write downs on secured portfolios in Croatia, Bulgaria and Romania, partly offset by positive revaluations in other countries with Italy being the most significant. Following the write down and with actions in place to prevent re-occurrence, the Group is well positioned to deliver stable results going forward.
The Group posted a quarterly cash EBITDA of NOK 993 million, an increase of NOK 234 million compared to Q2 2018 (+31%). Total revenues decreased by 50% to NOK 379 million from NOK 761 million in Q2 2018 and resulting in an operating loss of NOK -69 million (-119%). B2H invested NOK 1,667 million in new portfolios in second quarter, including the JV portfolio purchase with DDM Group. The portfolios were mainly purchased in Northern Europe (44%). Excluding the JV with DDM, more than 90 % of purchased portfolios were unsecured portfolios. The Group has purchased portfolios for NOK 4.8 billion over the last 12 months (-24%) and grown the total gross ERC to approx. NOK 22.6 billion (+12%). B2H continues to improve operations and cost to collect was down with 2.7 percentage points from 24.3% to 21.6%, with potential for further reduction going forward.
In January, the Group entered into a new joint venture structure with DDM Group for the acquisition of a non-performing loan portfolio in Croatia and this transaction was completed in April. Partial external financing from Insight was concluded in mid-July.
To further support the growth strategy, the Group issued in May 2019 a EUR 200 million senior unsecured rated bond loan with maturity in 2024.
At the end of the second quarter the Group has NOK 2.0 billion available for investments adjusted for deferred payment for portfolio purchases of NOK 165 million, in addition to operating cash flow from gross cash collections of purchased loan portfolios.
For further information, please see the Q2 2019 presentation and report attached. Definitions of alternative performance measures can be found in the Q2 2019 report.
The documents are also available on the Company's website: http://www.b2holding.no The results will be presented today, Friday 30 August at 08:30 CET and a webcast of the presentation can be viewed here: https://webtv.hegnar.no/presentation.php?webcastId=98044125
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.