23 July 2020, 07:00 CEST
Axactor reports Q2 and H1 financials
Axactor’s operations and financials for the second quarter and first half year 2020 were negatively affected by the Covid-19 outbreak, impacting all business areas.
Axactor’s operations and financials for the second quarter and first half-year 2020 were negatively affected by the Covid-19 outbreak, impacting all business areas. Reported EBITDA showed a loss of EUR 30 million, reflecting that the financial statement has been charged with a revaluation of the NPL portfolio of EUR 27 million and an impairment accrual for the REO assets of EUR 26 million. Cash EBITDA was EUR 44.4 million (65.4).
"After a challenging start to the second quarter, we have seen a strong uptick in performance from late May and expect this trend to continue into the second half of the year. The second quarter result was significantly impacted by the Covid-19 pandemic, which resulted in a downward revision of our portfolio book value. Spain and Italy have been among the countries hit hardest by the pandemic, while performance in the Nordic countries and Germany have showed more resilience through the quarter," says CEO Johnny Tsolis in Axactor.
Gross revenue was EUR 70.8 million in the second quarter (91.3), whereas total revenue including the NPL revaluation was EUR 28.7 million (72.4). The revaluation represented 2.4% of the book value of the NPL portfolio. The REO impairment accrual represented 22.7% of the REO book value.
The company remained compliant with all loan covenants, as Axactor’s main banking relations, DNB and Nordea, have granted a waiver for the leverage ratio for the second and third quarter 2020. The reopening of the markets and improved collection performance has significantly reduced the risk of a covenant breach in the second half of 2020.
Axactor took early action to mitigate the financial impact of Covid-19, including consolidation of offices and furloughs affecting roughly 400 employees for most of the quarter. The cost measures amount to EUR 25 million for the full year compared to internal budgets, with roughly half of the effect to come in the second half of the year.
"We have remained fully operational for our debtors, customers and partners through a very challenging period. Our June numbers show that our markets have turned the corner, and unless we have a second phase with similar lockdown measures, we expect improved NPL collection and higher 3PC activity in the second half of the year. The cost measures will also improve our earnings going forward," says Tsolis.
Axactor invested EUR 62 million in NPL portfolios in the second quarter and EUR 152 million for the first half-year, most of which in forward flow agreements in the Nordics. The company expects lower investments and a shift towards a positive cash flow after investments in the second half of the year, although a full-year investment level in excess of EUR 200 million for the full year will provide significant volume growth going into 2021.
For the first half-year, Axactor reported gross revenue of EUR 150.0 million (181.9) and total revenue of EUR 84.3 million (146.1). Reported EBITDA was EUR -15.8 million (48.3), whereas Cash EBITDA was EUR 92.6 million (124.2).
Axactor's CEO, Johnny Tsolis, will present the financial results for the second quarter and first half year 2020 in a webcast today at 08:30 CET, which is available at https://axactor.eventcdn.net/2020q2/
Participants dial-in numbers:
DK: +45 7876 8490 (Direct)
NO: +47 2195 6342 (Direct)
SE: +46 812 410 952 (Direct)
UK: +44 203 769 6819 (Direct)
US: +1 646 787 0157 (Direct)
For additional information, please contact:
Chief Executive Officer
Mobile phone: +47 913 35 461
Axactor Group is a next-generation debt management company operating in Norway, Sweden, Finland, Germany, Spain and Italy with an ambitious European growth strategy. Axactor acquires and collects on own portfolios of non-performing loans and also provides debt collection and accounts receivable management for third parties. The debt collection market is estimated to about 1,000 billion euros across Europe, providing significant opportunities for future expansion. The company has approximately 1150 employees.