DGAP-News

4finance S.A.: 4finance report on 6M 2020 results - Seite 2

- Development of near-prime lending products continued throughout the period. Good take-up of new launch in Latvia among suitably qualified existing customers. Products in Lithuania and Sweden were significantly enhanced and offered through new channels, with positive customer response. Near-prime issuance was up 12% year-on-year (31% in the online business and 10% in TBI Bank) reflecting strong customer demand and the expanded product range.

- TBI Bank loan issuance volume during the Period grew by 13% year-on-year to €77.1 million from €68.2 million in the prior year period, with consumer volumes holding up well in Q2 but lower in the SME segment. The majority of TBI Bank branches and service points have remained open and are operating in line with local healthcare guidance.
 

Financial Highlights
 

- Interest income of €167.0 million in the Period, down 22% from €213.4 million in the prior year period. The significant reduction in online loan issuance since mid-March due to Covid-19 resulted in a lower level of interest income in the second quarter, particularly in Spain and Poland.

- Cost to income ratio for the Period was 57.5%, vs. 52.2% in H1 2019, due to the lower interest income, with operating costs down 14% year-on-year, reflecting cost discipline across the Group and a reduction of marketing spend in the second quarter. Further cost savings from headcount reductions implemented in Q2 will be evident in H2 2020 results.

- Adjusted EBITDA was €33.3 million for the Period, down 47% year-on-year. The full interest coverage ratio as of the date of this report is 2.2x, reflecting a lower quarterly EBITDA contribution in Q2 and a reduced level of proforma interest expense from bond buybacks and exclusion of non-cash charges (see page 8 for further details).

- Post-provision operating profit for the Period was €6.2 million, and a loss before tax of €2.1 million.

- Net receivables totaled €502.2 million as of 30 June 2020, down 13.2% during the Period, given significantly lower origination in the online business in the second quarter.

- Overall gross NPL ratio at 24.0% as of 30 June 2020 (31.6% for online), compared with 20.7% as of 31 December 2019 (24.9% for online), with the increase due to lower new origination and some debt sales being postponed.