AKTIV KAPITAL ASA - Third quarter report for 2006

10/27/2006, 8:15 AM (Source: GlobeNewswire)



Highlights 3rd quarter in 2006 (3rd quarter in 2005)
Payments from portfolios NOK 454.4 million (+8.9%)
Total operating revenue NOK 351.6 million (+4.1%)
Profit before tax NOK 93.2 million (-33.3%)
EBITDA NOK 359.4 million (349.1)
Cash flow per share NOK 6.20 (6.30)
Change in portfolio collection estimates
of NOK 0 million (-0.6)
Total acquisitions in 3rd quarter of NOK 176.6 million including
portfolios in UK with face value of approximately GBP 101 million
and 62 000 accounts and in Sweden with a face value of approximately
SEK 150 million and 6 000 accounts



Highlights for the nine months ended September 30, 2006 (September
30, 2005)
* Payments from portfolios NOK 1 347.9 million (+8.0%)
* Total operating revenue NOK 1 090.9 million (+3.6%)
* Profit before tax NOK -179.5 million (-189.1%)
* EBITDA NOK 1 058.6 million (1 024.2)
* Cash flow per share NOK 20.27 (18.88)
* Change in portfolio collection estimates
of NOK -494.4 million (-200.9)
* Total portfolio acquisitions of NOK 1 240.3 million

EBITDA is defined as operating profit + depreciation of tangible
fixed assets+amortisation of intangible fixed assets- interest income
on portfolios (including the change in portfolio collection
estimates) + cash received on portfolios.

Earnings per share is defined as profit for the period divided by
number of shares less treasury shares.


Cash flow per share is defined as (profit for the period+
depreciation of tangible fixed assets+amortisation of intangible
fixed assets- interest earned on portfolios (including the change in
portfolio collection estimates)+ cash received on portfolios) divided
by the number of shares less treasury shares.


In the 3rd quarter of 2006, Aktiv Kapital achieved operating revenues
of NOK 351.6 million (337.7). The quarterly review of the portfolios
resulted in no changes in portfolio collection estimates.

Cash received from portfolios in the 3rd quarter amounted to NOK
454.4 million (417.4), an increase of 8.9% compared to the 3rd
quarter of 2005. Operating profit was NOK 141.8 million. EBITDA in
the 3rd quarter was NOK 359.4 million (349.1). The increase in
payroll and other operating expenses is mainly due to the inclusion
of the subsidiary in Canada acquired in the 4th quarter of 2005 and
increased fees.
Accounting principles
These interim financial statements have been prepared in accordance
with IAS 34 and with the same accounting principles as in the annual
financial statements. The financial statements for the 3rd quarter in
2005 have been restated to best reflect the adjustments recorded in
the 4th quarter in 2005 which related also to the 3rd quarter in
2005.

Comments on the results for the 3rd quarter of 2006

Portfolios
In the 3rd quarter in 2006, cash collections on portfolios were NOK
454.4 million representing an increase of 8.9% compared to the 3rd
quarter in 2005. Interest income on portfolios for the 3rd quarter
2006 amounted to NOK 254.0 million, an increase of 2% compared to the
3rd quarter in 2005. Operating profit in the 3rd quarter in 2006
amounted to NOK 141.8 million.

During the 3rd quarter, Aktiv Kapital's portfolios purchases and
forward flow arrangements in UK resulted in more than 62 000 new
accounts with a face value of approximately £101 million (NOK 1 227
million). In Sweden, consumer credits from a major issuer in the
Swedish market was acquired. This portfolio consists of over 6 000
accounts with a face value of approximately SEK 150 million (NOK 133
million). Additionally, portfolios were acquired in Austria, Canada
and Germany.

In the 3rd quarter 2006, the net cash flow from portfolio activities
was NOK 347 million of which close to NOK 177 million was invested in
new portfolios, (NOK 270 million).

As a result of these transactions, including existing forward flow
arrangements, Aktiv Kapital has invested NOK 1 240 million in new
portfolios in the first 9 months of 2006, compared to total portfolio
acquisitions of NOK 857.8 million for the full year of 2005.

Debt collection
Income from debt collection in the 3rd quarter of 2006 amounted to
NOK 61.0 million (60.3). The operating profit decreased from NOK 12.3
million in the 3rd quarter of 2005 to NOK 7.9 million in the 3rd
quarter of 2006.
The decrease in operating profit during the 3rd quarter is mainly due
to the competitive situation with margin pressure and increased
operational costs in Norway. A cost reduction program will be
implemented in Norway in order to reduce costs.

Administrative and financial services (AFS)
With revenues of NOK 22.5 million (21.4) in the 3rd quarter, the
revenue growth for the AFS business segment is 5%. The operating
profit in the 3rd quarter of 2006 amounted to NOK 4.1 million (4.2),
a decrease of 3%.

Net financial items
The quarters net financial items amounted to NOK 48.6 million (25.0).
Interest expense was higher than in the corresponding period of the
previous year due to a higher debt level. Net financial items for 3rd
quarter 2006 of NOK 48.6 million includes a net currency exchange
loss of NOK 5.9 million (net exchange gain of NOK 3.2 million) and
fees of NOK 4.1million.

Tax
Quarterly earnings were charged with an estimated tax rate of 20
percent. The Group's tax expense is dependent, in part, on how
earnings are distributed between subsidiaries in different countries
with different tax rates.

Dividend payment
In accordance with the resolution of the Annual General Meeting on 22
May 2006, NOK 212.4 million (165.2) has been paid as a dividend in
the 2nd quarter to the parent company's shareholders.

Financing
The initial drawdown on the loan agreement of NOK 3 500 million
signed in June 2006, was completed in mid July and refinanced the
Group's existing interest-bearing mortgage debt related to existing
portfolios. The drawdown of the loan is made in relevant currencies
reflecting the underlying expected future cash flow from the
portfolios. As such, the drawdown of NOK 3 103 million is, in
combination with 2 minor loans financing the 2 Crystal Production
vessels and the Canadian operation, reflecting a currency basket with
33% GBP, 31% EUR, 19% SEK, 9% NOK and remaining 8% as a combination
of CHF, DKK, CAD and USD.

The upfront fees related to the refinancing are amortised over the
loan period of 5 years.

At September 30, 2006 the Group had liquid assets of NOK 529.1
million of which NOK 520.9 million were unrestricted and NOK 8.2
million were restricted.

Outlook
The different European countries are at different stages in their
economic cycle. While the UK market shows increased number of
personal defaults, the German market is showing signs of recovery
from a weak situation. It is important to interpret these trends to
time investments in new portfolios as well as maximize collection
from existing portfolios. We expect that the number of portfolios
available for sale will increase in the years to come. This increased
number of portfolios available may lead to lower prices and stimulate
a lower short term growth particularly in the UK market. The Central
and Eastern European market may stimulate a higher investment
activity.

The good liquidity position and strong equity basis gives the Company
a solid foundation. The cashflow from existing portfolios provides
significant opportunities to grow the company further.

The Board has a positive outlook for the Company.
Oslo, 26 October 2006
The Board of Directors of Aktiv Kapital ASA


The presentation and the report including tables can be downloaded
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