Published: 2015-09-15 09:00:00 CEST
Mash Group Oyj
Press release

Euroloan Group PLC interim report 1.4.-30.6.2015

New record turnover and profit as growth continues during the second quarter. Current receivables growth increases. EBIT and EBIT/Sales continue to improve and the outlook for the third quarter is very positive.

Helsinki, Finland, 2015-09-15 09:00 CEST (GLOBE NEWSWIRE) -- Improved liquidity has enabled Euroloan to continue to grow during the second quarter, and the growth has continued into the third quarter, with new record monthly lending volumes in both July and August. Turnover grew to over 2,9 million EUR, corresponding to a yearly rate of 11,6 million EUR compared to 9,9 million EUR in 2014.

Assets have continued to increase in the form of current consumer receivables, as a result of increasing lending volumes and a growing customer base. The growth has been focused on core lending, increasing current receivables by 17%, which equals a corresponding annualized compounded growth rate of over 89%.

The Group completed several business transactions during the second quarter, which in total have had a positive one-time net effect of 1,35 million euros. Business areas have been streamlined, and the increase in financial resources facilitates investments in future additional growth. Chairman Tommi Lindfors explains: “We have divested some peripheral services and have freed additional resources to grow our core business. We are confident that this will have a very positive effect for the Group as a whole. The fact that we made a net profit on the transactions shows that our long-term investment strategy is paying off”.

Quarterly incoming cash flows from lending operations increased by 5% from 9,2 to 9,5 million EUR, a result of increased volumes and improvements in receivables management. Positive developments, such as the decrease in credit losses and improved customer loyalty have continued, resulting in lower risk and improved operational profitability. Improved customer selection, better scoring, incoming new customers and improved customer loyalty have increased profits from continuing operations considerably. The improved incoming cash flows contributed to the cash reserves remaining on a high level. Net profit increased from 0,01 million EUR to 1,18 million EUR compared to the previous quarter. Increased lending volumes by the end of the second quarter and into the third quarter are expected to reduce excess cash reserves and further improve both turnover rate and overall operational profitability.

The Group’s equity ratio remains at a high level, at 32%. Profitability (EBIT/Sales) increased from 28% to 53%, as a result of continuous improvement in operations, credit assessment and pricing criteria, as well as one-time items.

  Q2 2015 Q1 2015
Balance (million EUR) 57,8 53,4
Balance Growth 8 % 18 %
Current Receivables (million EUR) 37,1 31,6
Current Receivables Growth 17 % 6 %
Turnover (million EUR) 2,9 2,6
EBIT (million EUR) 2,3 0,7
EBIT/Sales 53 %* 28 %
Net profit (million EUR) 1,18 0,01
Equity ratio 32 % 33 %

*Excluding one-time items, EBIT/Sales was 31%.

Negotiations for long-term funding structures have progressed. In November 2014, Euroloan mandated a consortium of four international financial services providers to raise capital to meet Euroloan's rapid growth targets and to strengthen the Group's capital structure ahead of Basel III and CRD IV capital requirements. The total planned structure includes a combination of Common Equity Tier I, Additional Tier I, Tier II and senior debt exceeding total of EUR 100 million during the next 2-3 years, of which Euroloan has secured 15 million Euros. A strong capital base gives the Group flexibility to grow while maintaining high capital ratios on its balance sheet.

 

Interim Financial Statement

BALANCE SHEET Q2 2015 Q1 2015 2014*
ASSETS      
NON-CURRENT ASSETS      
   Intangible assets 11 344 175,99 11 353 465,97 11 072 293,61
   Tangible assets and investments 28 526,20 28 526,20 28 526,20
TOTAL NON-CURRENT ASSETS 11 372 702,19 11 381 992,17 11 100 819,81
       
CURRENT ASSETS      
  Current Receivables 37 060 350,26 31 592 124,87 29 872 532,29
  Cash and Bank Receivables 9 349 015,51 10 402 105,02 4 192 692,81
TOTAL CURRENT ASSETS 46 409 365,77 41 994 229,89 34 065 225,10
TOTAL ASSETS 57 782 067,96 53 376 222,06 45 166 044,91
       
EQUITY & LIABILITIES      
EQUITY      
  Share capital and issue 80 000,00 1 434 998,00 1 434 998,00
  Translation difference -30 503,71 -30 503,71 -30 503,71
  Reserve for invested non-restricted equity 15 967 568,66 15 108 290,66 15 108 290,66
  Retained earnings 1 173 868,58 1 193 444,58 1 210 578,95
  Profit for the Financial period 1 191 806,87 11 971,58 6 793,63
TOTAL EQUITY 18 382 740,40 17 718 201,11 17 730 157,53
       
MINORITY INTEREST 0,00 0,00 0,00
GROUP RESERVE 28 004,63 28 004,63 28 004,63
       
LIABILITIES      
    Non-current Liabilities 6 449 000,00 21 212 000,00 18 815 000,00
    Current Liabilities 32 922 322,92 14 418 016,32 8 592 882,75
TOTAL LIABILITIES 39 371 322,92 35 630 016,32 27 407 882,75
TOTAL EQUITY & LIABILITIES 57 782 067,96 53 376 222,06 45 166 044,91

*Full-year figure

INCOME STATEMENT Q1-Q2 2015 Q2 2015 Q1 2015 2014*
TURNOVER 5 533 159,30 2 902 772,65 2 630 386,65 9 900 552,63
Other operating income 1 350 835,95 1 350 675,47 160,48 4 510,59
Materials and services -24 136,88 4 096,70 -28 233,58 -91 137,34
Personnel costs -935 487,67 -454 205,03 -481 282,64 -1 433 396,14
Depreciation -191 155,29 -97 327,65 -93 827,64 -680 040,34
Other business-related costs -2 734 137,97 -1 450 485,60 -1 283 652,37 -5 152 751,39
EBIT 2 999 077,44 2 255 526,54 743 550,90 2 547 738,01
Financial income and expenses -1 807 270,57 -1 075 691,25 -731 579,32 -2 623 187,76
EBT 1 191 806,87 1 179 835,29 11 971,58 -75 449,75
Tax 0,00 0,00 0,00 82 243,38
Net Profit 1 191 806,87 1 179 835,29 11 971,58 6 793,63

*Full-year figure

The interim financial figures provided are unaudited, and based on the Company management’s estimates of the situation with the information currently available and planned development. The estimates include, for instance, planned and partially realized one-time costs, investments, amortization and depreciation, financial and other costs. Calculated taxes, which have not been finalized at this point, and impairment of goodwill are not included in the interim figures. Unexpected events, decisions by authorities, service providers, market disturbances and other factors may affect the actual financial figures significantly compared to these estimates. The reader is advised to read the 2014 annual review and financial statement for the latest audited figures and more information about the Group. 

 

Outlook

“We made significant changes in marketing and sales, which hampered growth during the second quarter but have increased the growth rate toward the end of the quarter and into the third quarter. Challenges in the marketplace caused by changes made by service providers and the need for fully automated and integrated online marketing tools necessitated the marketing overhaul.” says CEO Samuli Korpinen. “Some of our expected growth in consumer lending for the second quarter was delayed due to this, but we saw the importance of gearing up our approach to marketing and sales to match the state-of-the-art capabilities of our fully automated online lending systems. We are growing so fast that it is important to be proactive and be prepared for the next leap, which will entail growth in several market areas at once. The investment and effort we put into marketing automation is now paying off and we are already seeing the effect in the early third quarter, with two consecutive months of record lending volumes in July and August. Our focus on sales will continue, and we expect continued growth for the third quarter, with more of our available cash reserves converted into increased lending volume. The overall outlook for the third quarter is very positive, which we expect to continue for the whole year”.

The group expects both a significant growth in turnover for the third quarter and, due to the growth in current receivables, higher incoming cash flows from repaid loans for the following months. The outlook regarding turnover, income and total balance sheet for the financial year is that they will grow from the previous year, but the Board notes that the availability of liquidity in particular will affect the outcome significantly for the second half of 2015. The current outlook regarding funding and growth for 2015 is very positive.

 

Euroloan Group PLC (Euroloan) is a rapidly growing international finance group specialized in financial technology (FinTech). The group’s headquarters are located in Helsinki, Finland, with offices in Stockholm, Sweden and Warsaw, Poland. Euroloan has developed the most efficient financing business models and systems in the market. Euroloan’s fully automated and internationally scalable cloud banking services provide real-time credit solutions for consumers and small-to-medium size businesses. Euroloan has consolidated its market position and increased its market share continuously since the company was established in 2007. More information about the company can be found at www.euroloan.com.

         For more information, please contact:
         Jonas Lindholm
         Euroloan Group PLC
         Tel +358 10 217 1003