Release Date: July 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Operating income rose by 4% compared to the previous year.
- NBI margin slightly increased to 9.1% from 9.0% last quarter.
- Cost of risk decreased to 4% during Q2, down from 4.7% in Q1.
- Strong momentum in payment solutions, with Sweden growing 21% and Finland 26%.
- Transaction volumes and the number of cards both grew by 4% year on year.
Negative Points
- Operating profit decreased significantly to SEK59 million from SEK244 million last year.
- High level of credit loss provisions remains stable compared to March.
- Consumer loans growth is slower, especially in Norway due to system risk buffer requirements.
- Total costs increased by 11% versus last year, driven by personnel and IT expenses.
- The Board decided not to propose an interim dividend due to historical low results.
Q & A Highlights
Q: When it comes to asset quality, is it still Sweden and Finland that stick out as particularly challenging? And has anything changed there in the quarter, aside from just regular seasonality?
A: Related to Sweden and Finland, we saw the biggest uptick in higher amounts and consumer loans from Q4 and Q1. That's also where we see the strongest recovery now. We can see clearly that a bigger part of the business is impacted by higher provisions overall. However, where the loan book has the biggest size in terms of volume, it has a bigger impact, and that's why you see a bigger recovery in Sweden and Finland in consumer loans. - Magnus Fredin, CEO
Q: Do you see any reason that the bid from CVC would not go through?
A: That's not something I would like to comment on. It's up to the shareholders to decide where they stand on that. They need to decide individually what they think is best for them. - Magnus Fredin, CEO
Q: Can you provide more details on the cost-saving initiatives and their expected impact?
A: We have completed the centralization program, reducing the number of employees in Denmark and Norway substantially. This initiative is expected to provide annual savings of SEK40 million from 2025. Additionally, we initiated a second efficiency program, which includes further organizational measures, renegotiations of major suppliers, and replacing IT systems. This program is expected to deliver additional savings of SEK40 million from 2025. - Sofie Lindell, CFO
Q: How is the performance of the payment solutions segment compared to consumer lending?
A: Payment solutions have strong momentum, growing 14% versus Q2 2023. In consumer loans, we are prioritizing profitability over growth, which is evident in the loan book. The NBI margin in payment solutions is somewhat down due to mix effects, but we are working on pricing adjustments to account for increased funding costs. - Sofie Lindell, CFO
Q: What are the future strategic focuses for Resurs Holding?
A: We will continue to focus on payment solutions and the strong demand in that area. To take the next step, we need to invest in the next generation of system landscapes and architecture to modernize our system landscape overall. We are finalizing our business plans and will communicate the full strategy after the summer period. - Magnus Fredin, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
