AKTIV KAPITAL ASA - First quarter report for 2007

4/27/2007, 8:22 AM (Source: GlobeNewswire)
Main points for the first quarter in 2007 (1st quarter in 2006)


* Payments from portfolios amounted to NOK 496.9 million in the 1st
quarter of 2007, an
* increase of 9.9%
* Total operating revenue amounted to NOK 415.2 million (+8.5%)
* Profit before tax amounted to NOK 174.3 million (+208.0%)
* EBITDA in the 1st quarter amounted to NOK 368.4 million (351.9)
* Pre tax cash flow per share amounted to NOK 7.53 (6.58)
* Total portfolio acquisitions during the 1st quarter amounted to
NOK 200.0 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.


In the 1st quarter of 2007, Aktiv Kapital achieved operating revenues
of NOK 415.2 million compared to NOK 382.6 million in the same period
last year. The portfolio segment represents NOK 323.9, Debt
collection segment NOK 65.4 and the AFS segment accounts for NOK 25.8
million.

Cash received from portfolios in the 1st quarter amounted to NOK
496.9 million (452.1), an increase of 9.9% compared to the 1st
quarter of 2006. Operating profit was NOK 187.9 million. EBITDA in
the 1st quarter was NOK 368.9 million (351.9). The increase in
payroll and other operating expenses is mainly due to expansion of
businesses in Spain, Germany, Canada and further expansion in the UK.

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.

Comments on the results for the 1st quarter of 2007

Portfolios
Total cash collections on portfolios in the 1st quarter of 2007
amounted to NOK 496.9 million, which is an increase of 9.9% compared
to the 1st quarter of 2006. The interest income on portfolios
amounted to NOK 323.9 million in the 1st quarter of 2007. This is an
increase of 14.1% compared to the 1st quarter of 2006.

In the 1st quarter of 2007, Aktiv Kapital invested NOK 200 million in
new portfolios, net of put backs, including existing forward flow
agreements. Portfolio purchases and forward flow agreements in UK
resulted in more than 96 000 new accounts with a face value of
approximately £ 130.3 million (NOK 1 587.8 million). In Spain,
portfolios with a face value of approximately € 75.6 million (NOK
617.5 million) were acquired. The portfolios consist of more than 17
000 accounts. Portfolio acquisitions in Canada resulted in more than
91 000 new accounts with a face value of $ 150 million (NOK 798.6
million). In addition, smaller portfolios in Austria, Denmark,
France, Germany, Norway, Sweden and Switzerland were acquired.

Debt collection
Income from debt collection in the 1st quarter of 2007 amounted to
NOK 65.4 million (60.2). The operating profit amounted to NOK 10.8
million in the 1st quarter of 2007 compared to NOK 6.8 million in the
1st quarter of 2006, an increase of NOK 4.0 million.

The increase in operating profit during the 1st quarter of 2007 is
mainly due to increased revenues while operating expenses have
remained stable. Fees for legal enforcements in Norway was reduced
as of January 1, 2007 and is expected to result in lower legal
enforcement expenses throughout 2007.

Administrative and financial services (AFS)
With revenues of NOK 25.8 million (24.4) in the 1st quarter 2007, the
revenue growth for the AFS business segment is 6%. The operating
profit in the 1st quarter 2007 amounted to NOK 3.9 million (5.1).

The revenue growth in the 1st quarter 2007 is mainly attributed to
revenue growth in Sweden. The decrease in operating profit of NOK
1.2 million is mainly due to increased communication expense and
allowance for doubtful accounts.

Net financial items
The quarters net financial expenses amounted to NOK 13.7 million
(42.2). Included in net financial items in the 1st quarter 2007, is
a net foreign currency exchange gain of NOK 31.8 million (1.1) as
well as an unrealised gain on interest hedge contracts of NOK 2,6
million (0,0).

Interest expense in the 1st quarter of 2007 has increased compared to
the 1st quarter in 2006 due to a combination of a higher debt level
and an increase in interest rates.

Financing
The Group's finance strategy is to manage and to limit both currency
and interest risk. The long term financing is made in relevant
currencies reflecting the underlying expected future cash flow from
the portfolios. As such, the non current interest bearing loan
amounting to NOK 3 174 million (net of amortised arrangement fee) as
of March 31, 2007 is, together with a loan financing the Canadian
operation, reflecting a currency basket with 34% GBP, 33% EUR, 18%
SEK, 7% NOK and remaining 8% as a combination of CHF, DKK and CAD.
The interest exposure related to the borrowed amount in different
currencies are reduced through the use of a combination of interest
swaps and interest caps in the main currencies GBP, EUR, SEK and NOK.

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

At March 31, 2007 the Group had liquid assets of NOK 612.7 million of
which NOK 595.9 million were unrestricted and NOK 16.8 million were
restricted. The net interest bearing debt of the Group was NOK 2
732.9 million.


Outlook
Economic activity in Europe is expected to remain favorable in 2007
and consumer credit is still increasing in most European markets. As
such, we expect that the number of non performing consumer loan
portfolios available for sale will increase in the current year and
generate an attractive pipeline of collection cases.

The trend in volumes and margins in the debt collection segment has
improved and will require focus to sustain this development.
Increasing interest rates in major European markets may lead to
increased default rates which ultimately enable Aktiv Kapital to
acquire more portfolios. The German economy shows signs of recovery
and will affect consumer's ability to repay non performing loans.

The favorable liquidity position and significant asset base gives the
Company a solid foundation for continued expansion. Further, the
strong cashflow from existing portfolios also provides significant
opportunities to grow the company.


Oslo, April 26, 2007
The Board of Directors of Aktiv Kapital ASA


The first quarter report and presentation can be found on
www.newsweb.no.

The presentation and the report with tables can be downloaded from
the following links:


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