The Kredyt Inkaso group, one of Poland’s biggest players in the debt collection industry, recorded the following results in Q1 of the 2019/2020 financial year (April 2019 – June 2019):
„Consistent improvement of operational collection processes, using advanced data analyses, translates into an increase in payments from debtors, which reached a double digit level in the analyzed period. Some changes to the laws, e.g. reform of the Code of Civil Procedure, will increase collection costs, which will result in a decrease in the prices of accounts receivable packages in the future. Companies which recently invested a lot, taking into account the legal collection costs on the previous level, will have worse results than assumed. In the case of Kredyt Inkaso, this impact will not be significant, due to the limited value of investments over the past four quarters” – comments Maciej Szymański, President of Kredyt Inkaso’s Management Board.
The net loss recorded in the analyzed period is primarily the consequence of the lower value of net revenues. The decrease in revenues is associated with higher amortization of the portfolios and the negative impact of exchange rates on portfolio valuation. In Q1 of last financial year, the revaluation of accounts receivable packages amounted to PLN 9.3 million, compared to PLN 0.2 million in Q1 of this financial year. Additionally, the group recorded an increase in the operating expenses associated with the development of its operating activity and impact of FX losses in financial expenses.
High payments from debtors, with a relatively small scale of investments in Q1 of the 2019/2020 financial year, resulted in a slight decrease in the balance sheet value of the receivables as at the end of June 2019.
In Q1 2019/2020, the group recorded expenditures on accounts receivable portfolios of PLN 6 million, compared to PLN 76 million in the corresponding period of the previous year. The scale of investments in the entire current year depends on the timing of raising new debt financing and its size. The PLN 210 million private issue of series F1 bonds in April this year stabilized and sorted out Kredyt Inkaso’s debt structure for next 4 years, however to continue expansion, additional financing needs to be raised. The company intends to issue new debt for financial institutions or banks and considers both Poland and abroad.
The company purchases debt portfolios from different sectors, primarily retail, telecommunication and consumer loans. In addition to Poland, Kredyt Inkaso operates also in Romania, Russia, Bulgaria and Croatia. The balance sheet value of accounts receivable acquired abroad as at the end of June 2019 amounted to PLN 211 million, which is 31 percent of the total value of the portfolios (Poland accounts for 69 percent of the total value of the portfolios). In the company’s opinion, the international business is stable and its share should not change in the short run.
Throughout its history the company has placed 42 series of debt securities with the total par value of PLN 1.232 billion. All maturing bond series have been redeemed on time together with interest. In June 2019, the company redeemed series Y bonds with the par value of PLN 35 million. As at 30 June 2019, the group’s balance sheet comprised 9 outstanding series of bonds with the total balance sheet value of PLN 378 million and loans with the total balance sheet value of PLN 131 million.
As at the end of June 2019 the group had cash in the amount of PLN 20 million.
The net financial debt to equity ratio in the group was 2.12x as at the end of March 2019.
