DGAP-News

Ferratum Oyj: Interim Report January - March 2018 - Seite 3

Operating profit (EBIT) increased by 48.5% year-on-year to EUR 10.2 million. The operating profitability improved from 13.7% in Q1 2017 to 16.6% in Q1 2018, as a result of significantly reduced credit losses (impairment on loans) . The gross impairment on loans ratio has improved from 34.4% in Q1 2017 to 30.7% in Q1 2018.

The profit before tax (EBT) grew by 11.4% y-o-y to EUR 6.6 million. The EBT development suffered from an unfavourable FX volatility during Q1 2018 totalling EUR 1.154 million in FX losses compared to FX gains of EUR 842,000 in Q1 2017. The losses were mostly attributable to the weakening of the Swedish Krona (EUR -900,000) and the Polish Zloty (EUR -284,000) although Ferratum has partially hedged its SEK and its PLN exposure.

Due to the adoption of the new IFRS 9 accounting standard -with effect from 1 January 2018, the risk provisions of the Group had to be inceased by EUR 9.2 million from this effective date. This one-time increase of the risk provision reduced the equity of the Group by EUR 7.5 million as the increased risk provisions were partially offset by deferred tax assets of EUR 1.7 million. The adjustment was booked directly to the Group's equity and did not affect the reported profit for Q1 2018. Overall, Group equity decreased marginally to EUR 104.0 million from EUR 105.2 million as of 31 December 2017, while the equity ratio reduced by 1% to 23.2%. Net receivables from customers grew by 3.1 % to EUR 265.5 million from EUR 257.4 million. The loan coverage ratio increased from 23.4% in Q4 2017 to 29.5% in Q1 2018, including the one-time adjustment from IFRS 9. Deposits from customers increased by 10.5% from EUR 174.3 million to EUR 192.7 million. The intention of the management is to further reduce the inflow of deposits and according actions have been taken, e.g. reduced interest rates for savings accounts and term deposits.

Ferratum's existing group rating of BBB+ from Creditreform Rating AG was reconfirmed during Q1 in its regular annual review. Creditreform Rating AG based the rating on the continued revenue growth and highly satisfactory credit-worthiness of the Group in the 2017 financial year.

Subsequent Events

During the second quarter quarter, Ferratum successfully issued EUR 100 million of new senior unsecured bonds in order to refinance the Group's outstanding bonds maturing in October 2018 (EUR 45 million in total, issued by Ferratum Capital Germany GmbH, a subsidiary of Ferratum Oyj) and to finance continued growth of the Group. The new senior unsecured bonds have a coupon of 3 months Euribor plus 5.50 per cent p.a. and a tenor of four years. The bonds shall be listed on Nasdaq Stockholm and first at Frankfurt Stock Exchange Open Market and thereafter at Frankfurt Stock Exchange Prime Standard (best effort basis) with ISIN: SE0011167972.