Q2 2024 Axactor ASA Earnings Call Transcript
Key Points
- Cash EBITDA increased by 3% year-over-year, reaching EUR 61 million, marking one of the highest levels for Axactor ASA (FRA:2LJ).
- Strict cost control led to a reduction in operating expenses by EUR 3 million or 11% year-over-year.
- The company successfully executed a planned shift in investment levels, with investments at attractive prices improving the total gross IRR on the back book.
- The 3PC segment delivered a growth of 8% in Q2, driven by double-digit growth in Spain and Norway.
- Axactor ASA (FRA:2LJ) is compliant with all covenants, maintaining a healthy EBITDA margin of 51% due to cost control measures.
- Gross revenue declined by 2% year-over-year, impacted by macroeconomic challenges and government-imposed debt relief initiatives.
- The NPL segment reported a negative growth of 3% this quarter, with total income from the segment declining by 12%.
- The annualized return on equity was only 4%, pressured by higher interest rates and a challenging collection environment.
- 95% of the company's interest-bearing debt is unhedged, exposing it to interest rate fluctuations.
- The collection performance in Norway and Germany was challenging, ending at 93% for the quarter.
Good morning and welcome to Axactor's second quarter presentation. Together with me, I have our CFO, Nina Mortensen, which will present the financials. The presentation will be divided into four parts. First, I will take you through the Q2 highlights, then Nina will go through the financial updates. Before I present an updated outlook. As always, we will round off with a Q&A session.
Let us move to slide 3 and have a look at the highlights for the second quarter. Gross revenue declined marginally year-over-year by 2%. And the main reasons for the negative development are still the macroeconomic environment, the debt relief initiatives from the government, and the relatively moderate investment levels we had in 2023.
However, cash EBITDA was up 3% year-over-year, reaching EUR61 million, which is one of the highest, if not even the highest level in a single quarter for Axactor. Strict cost control in all markets offset declining gross revenue and inflation. EBITDA ended at EUR30 million, down from EUR33 million last year, but still
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