Q2 2024 Hoist Finance AB (publ) Earnings Call Transcript
Key Points
- Hoist Finance AB (FRA:4HF) reported a strong profit before tax of SEK383 million for Q2 2024.
- The company achieved a return on equity (ROE) of 18%, with an underlying ROE of around 15%, aligning with their core financial target.
- Hoist Finance AB (FRA:4HF) closed SEK2.2 billion in investments during the quarter, marking the third consecutive quarter of such high investment levels.
- The company has a solid pipeline for the rest of the year, with SEK2 billion in portfolios already signed post-quarter closing.
- The collection performance remained strong at 106%, indicating effective operational improvements and a healthy portfolio.
- The company incurred restructuring costs in Germany, Italy, the Netherlands, Belgium, and Cyprus, impacting overall profitability.
- There were significant non-recurring costs, including SEK30 million for IT in-sourcing and SEK20 million for strategic work, which may not be sustainable.
- The increased liquidity reserves required for the new specialized debt restructure (SDR) status are expected to add SEK70 million in annual funding costs.
- The funding cost on average is plateauing, and while it is expected to gradually decrease, it remains a concern in the current interest rate environment.
- The company faces challenges in maintaining the high collection performance, as the current 106% is not considered the new normal.
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Good morning, everyone, and welcome to Hoist Finance earning toll now for the second quarter 2024. I'm Harry Vranjes, CEO of Hoist Finance. And with me here, as usual, healthy this time, I have Christian Wallentin, our CFO, and together today will take you through the results and highlights of the second quarter.
And it has been a very busy quarter with deliveries on many, many fronts. But before we do that, just like in the last few quarters, I just want to repeat for any new joiners, the message about what we at Hoist Finance are about. So we are a performing financial institution working with non-performing loans. We are different compared to other peers in the industry.
Hoist Finance is a regulated credit market institution supervised by the Swedish FSA. And as such, we have a different regulatory environment than a different funding model than most of our peers. Our main funding source some 70% is coming from savings accounts from Republic. We have savings customers in Sweden, Germany,
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