KRUK Group net profit up 67 percent y/y to EUR 5.2 mln in Q3 on higher debt income

The net profit of Polish debt collector KRUK Group, including the Romanian subsidiary KRUK International, surged by 67 percent year-on-year (y/y) to RON 24 million (EUR 5.2 million) in the third quarter, helped by higher revenues and increased cash payments on debts purchased by KRUK. The group’s profit amounted to RON 60 million (EUR 13.2 million) in the first nine months.

KRUK Group increased its revenues by 29 percent to RON 270 million (EUR 59.4 million), while the EBITDA added 41 percent to RON 239 million (EUR 52.6 million) on nine months The company said that cash payments on debt it purchased soared by 42 percent y/y to RON 366 million (EUR 80.6 million) in the same period.

“We recorded an increase in investment in receivables purchases in comparison with the second quarter, while keeping our debt ratio at a safe level. Our cash flows are very stable,” said Piotr Krupa, CEO of KRUK SA.

“The share of cash payments from customers (debtors) has been growing and after three quarters of this year already constitutes 97 percent of payments made in the entire 2011.”

The group bought 36 debt portfolios on the Polish, Romanian and Czech markets in the first nine months. More than half were retail debt portfolios, while the rest were corporate portfolios purchased from financial institutions or other entities.

The company has invested RON 209 (EUR 46 million) million in the first nine months, and purchased debt worth RON 2.8 billion (EUR 616 million).

“Given the relatively high prices, our priority is to maximize return on investment. We currently have on our balance sheet portfolios with a total fair value of RON 865 million (EUR 190 million) which we treat as a very solid base to achieve satisfactory financial results in the next years. Nevertheless, we have both financial and operational capacity to purchase new debt portfolios from banks and from other institutions and we are an active bidder in tendering processes,” said Krupa.

The prices of debt portfolios up for sale have stabilized as the quality of debts sold has depreciated, according to KRUK. It expects competitions between debt purchasers to ease, due to tougher financing options of smaller firms.

“We are now interested in large, developing markets where banks are selling their receivables on a large scale or are quickly growing their consumer lending,” stated the KRUK CEO.

KRUK entered the Slovakian market this October, after acquiring two debt portfolios worth RON 44 million (EUR 9.7 million). At present, the operations in Slovakia are managed from its subsidiary in the Czech Republic.

KRUK Group organized on November 17th the nationwide Day Without Debts. It is an educational initiative started in Poland four years ago. It was celebrated for the second time in Romania. For the Czech Republic, it was a first this November.

Ovidiu Posirca

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