Norway-based B2Holding, that owns Debt Collection Agency EAD (DCA), today reports all-time high gross cash collection and cash EBITDA combined with reductions in leverage and cost to collect, the company’s interim report shows.
B2Holding had total operating revenues of NOK 880 million (€86.6M) in the third quarter, an increase of 18 per cent from the same quarter last year. Gross cash collection increased by 36 per cent to NOK 1386 million (€138M). Cash EBITDA was NOK 1062 million (€104M), an increase of 37 per cent compared to the third quarter 2018, while operating profit (EBIT) increased 5 per cent to NOK 387 million (€38M). Profit after tax was NOK 181 million (€18M), an increase of 14 per cent.
“This was a quarter of progress for B2Holding. We initiated several actions to improve our handling of the secured portfolio, in order to realize the underlying value we see here. At the same time, our unsecured portfolio continued to perform well. Moving forward, our ambition is to create shareholder value based on our substantial European position built over the past years,” said Erik J. Johnsen, CEO of B2Holding ASA.
Leverage Ratio at end of the quarter was 3.0x, down from 3.3x last year, verifying a solid debt service capacity. B2Holding continues to improve operations, and cost to collect was down 2.2 percentage points from 24.6 per cent to 22.4 per cent, with potential for further reduction going forward.
B2Holding invested NOK 1231 million (€118M) in new portfolios in third quarter. The portfolios were mainly purchased in Northern Europe, and 80 per cent of the purchases in the quarter were unsecured portfolios. B2Holding has acquired portfolios totalling NOK 3.5 billion (€344M) in 2019, including the Group’s share of portfolios acquired and held in joint ventures, and grown the total gross ERC by 20 per cent to approximately NOK 24.7 billion (€2.4B).
At the end of the third quarter, B2Holding has NOK 1.8 billion (€177M) available for investments, adjusted for deferred payment for portfolio purchases of NOK 153 million, in addition to a strong operating cash flow from collections of purchased loan portfolios.
Going forward, B2Holding sees a strong pipeline of both secured and unsecured portfolios. The Group will continue to evaluate more co-investments in existing markets, which is expected to increase revenue from Asset Under Management (AUM).