30 May 2017. 4finance Holding S.A. (the ‘Group’), Europe’s largest online and mobile consumer lending group, today announces unaudited consolidated results for the three months ending 31 March 2017 (the ‘Period’).
Revenue up 16%, profit before tax eur 17.0 million, showing benefits of diversification
- Revenue up 16% to EUR 104.7 million in the Period compared with EUR 90.3 million in the prior year period.
- Adjusted EBITDA was EUR 34.9 million for the Period, up 18%, leading to an adjusted interest coverage ratio of 2.6x.
- The Group’s profit before tax for the three months to 31 March 2017 was EUR 17.0 million, a decrease of 15% from EUR 19.9 million in 2016.
- Online loan issuance grew by 17% to EUR 313.1 million in the Period from EUR 266.9 million last year.
- Net loan portfolio reached EUR 508.5 million as of 31 March 2017, up 3% during the Period.
- Cost to revenue ratio for the Period was 56%, vs. 47% for the three months to 31 March 2016, reflecting a significant increase in staff numbers during last year, acquisitions and investment for future growth.
- Financial strength remains solid with a capital to assets ratio of 26% as of 31 March 2017 and capital / net loans of 49%.
- Credit discipline and effective NPL management maintained, with a non-performing loans to online loan issuance ratio of 8.9% as of 31 March 2017, improving from 9.3% at year end, and a reduction in net impairment / revenue to 22%.
- The number of registered online lending customers reached 6.7 million as of 31 March 2017, up 36% from a year ago, with a further 1.4 million registered banking customers added through TBI Bank.
- Approvals granted for passporting of TBI Bank credit card license to Poland and for portfolio transfers from Sweden and Denmark alongside continued strong financial performance from TBI Bank.
- Developing new product offerings, using both brands, to adapt to regulatory changes in Georgia.
- Expanded TrustPilot and Ekomi online customer review programme to five markets with strong ratings and positive feedback.
- Launched pilot of Point-of-Sale offering in Spain with Zaplo brand offering 3-12 month loans with c.30% APR.
- Completed significant refinancing in April with new USD 325 million 5 year bond issue to extend our funding structure, including tender of 2/3 of old USD bond with removal of its put option, and early redemption of SEK 2018 bond.
George Georgakopoulos, CEO of 4finance, commented:
“With revenue growth of 16% and profit before tax of EUR 17.0 million, our first quarter performance showed the benefits of our diversification. We have seen growth in a number of European markets (particularly Spain and Denmark) with our investment in the instalment loan offering in European markets delivering additional revenue and Latin America achieving unit economics and poised for growth. Regulatory changes in Georgia and Lithuania have impacted on results, but we are adapting our products in both those markets with the benefit of our well established brands.
“TBI Bank continues to contribute positively to 4finance, with deposit and loan growth seen in the consumer business and encouraging progress in our strategic initiatives to bring additional products and lower funding cost to our online business.
“The recent USD 325 million, 5 year bond offering brought many new institutional investors to the group and represents a liquid benchmark sized transaction. Together with the associated refinancing of our SEK and old USD bond, we have no significant debt maturities until summer 2019 and now have the funding to support our continuing profitable growth.
“It has been a very active start to 2017 for 4finance. Our focus on credit quality continues to improve our results. We expect the benefits of our cost efficiency drive to be reflected later in the year. Our strategy remains firmly multi-market and multi-product as we continue to expand our sustainable, diversified business.”
Key Financial Ratios
|Three Months Ended 31 March 2017 (unaudited)||Three Months Ended 31 March 2016 (unaudited)||Year Ended 31 December 2016 (audited)||Year Ended 31 December 2015 (audited)|
|Net loan portfolio (in millions of EUR) (1)||508.5||309.1||493.9||308.3|
|Capital/assets ratio (2)||26%||42%||25%||40%|
|Capital/net loan portfolio (3)||49%||62%||47%||56%|
|Adjusted interest coverage (4)||2.6x||4.0x||3.6x||4.1x|
|Profit before tax margin (5)||16%||22%||21%||23%|
|Return on average equity (6)||21%||37%||31%||41%|
|Cost/revenue ratio (7)||56%||47%||48%||42%|
|Net impairment to revenue ratio (8)||22%||25%||23%||24%|
|Non-performing loans to loan issuance ratio(9)||8.9%||9.4%||9.3%||9.0%|
A conference call with management to discuss these results is scheduled for Wednesday 31 May at 15:00 UK timeTo register, please visit www.4finance.com/investors
Established in 2008, 4finance is the largest and fastest growing online and mobile consumer lending group in Europe with operations in 16 countries. Putting innovative data-driven analysis into all aspects of the business, 4finance has grown rapidly, issuing over EUR 4 billion to date in single payment loans, instalment loans and lines of credit.
4finance operates through a portfolio of market leading brands with strong regional presence including Vivus, SMSCredit and Zaplo. A responsible lender, offering simple, convenient and transparent products and service, 4finance is meeting growing customer demand from those under-served by conventional lending.
4finance has group offices in Riga (Latvia), London (UK) and Miami (USA), and currently operates in Argentina, Armenia, Bulgaria, the Czech Republic, Denmark, the Dominican Republic, Finland, Georgia, Latvia, Lithuania, Mexico, Poland, Romania, Spain, Slovakia and Sweden. The group also provides consumer and SME lending through TBI Bank, its EU licensed banking operations in Bulgaria and Romania.
Forward looking statements
Certain statements in this document are “forward-looking statements”. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements.