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DDM Holding AG
DDM Debt AB
DDM Treasury Sweden AB: Q4 and full year report January - December 2016
Strong cash flows from portfolios
- Net collections decreased by 2% to SEK 223.1M (2015: SEK 228.6M)
- Cash EBITDA decreased by 7% and amounted to SEK 189.0M (2015: SEK 202.7M)
- Net loss for the year of SEK 2.9M (2015: profit of SEK 36.0M)
- A large Hungarian transaction formally closed at the end of April 2016, resulting in significantly stronger cash flows
- The SEK 31M 18% subordinated notes were repaid on their final maturity date of 30 September 2016, decreasing future financial expenses and the average cost of borrowing
Highlights fourth quarter 2016
- Net collections decreased by 61% to SEK 56.0M (Q4 2015: SEK 143.9M)
- Cash EBITDA decreased by 60% and amounted to SEK 47.8M (Q4 2015: SEK 118.9M)
- Net profit for the period of SEK 13.7M (Q4 2015: profit of SEK 38.1M)
Significant events after the end of the year
- A further portfolio was acquired in the Czech Republic for approximately SEK 48M
- The SEK 300M 13% senior secured bonds were fully redeemed in February 2017, following the issuance of EUR 50M of senior secured bonds at 9.5% by DDM Debt AB in January
Comment by the CEO
Cash flows from existing portfolios continued to be strong in the fourth quarter of 2016, particularly in Hungary and the Czech Republic.
Net collections in the fourth quarter of 2016 decreased by 61% compared to the fourth quarter of 2015, as the prior year benefitted from the large acquisition in Hungary at the end of the year. For the full year 2016 net collections decreased by 2% compared to the prior year.
Cash EBITDA (net collections less operating expenses) for the fourth quarter amounted to SEK 47.8M, a decrease of 60% compared to the same period of 2015, driven by the lower net collections. For the full year 2016 cash EBITDA was SEK 189.0M, a decrease of 7% compared to the full year 2015.
The result for Q4 2016 benefitted from a tax income of SEK 6.6M, mainly due to the recognition of deferred tax assets on tax losses carried forward.
Cash flow from operating activities before working capital changes for the fourth quarter of 2016 was SEK 35.6M, compared to negative SEK 143.0M for the fourth quarter of 2015, benefitting from the cash flows from the large Hungarian acquisition. Cash flow from operating activities before working capital changes for the full year 2016 was SEK 157.5M, compared to negative SEK 90.9M for 2015. The strong cash flows along with the disposal of a portfolio in Poland in the third quarter enabled the full redemption of the SEK 31M 18% subordinated notes on their maturity date of 30 September 2016, which was financed using cash on hand. The redemption has enabled DDM Treasury Sweden AB to reduce its gross debt and financial expenses in the fourth quarter.
Since 31 December 2016 the DDM Treasury Group has acquired a further portfolio in the Czech Republic for approximately SEK 48M (approximately EUR 5M). This was the third portfolio that we have acquired from the seller, confirming DDM’s reputation as a trustworthy buyer.
Since the end of the year DDM Debt AB has also acquired DDM Treasury Sweden AB’s subsidiaries holding the portfolios, allowing the SEK 300M 13% senior secured bonds to be fully redeemed in February following the issuance of EUR 50M of senior secured bonds at 9.5% by DDM Debt AB in January.
CEO Gustav Hultgren and CFO Fredrik Olsson will comment on the DDM Group’s results during a conference call on 28 February 2017, starting at 10:00 a.m. CET. The presentation can be followed live at www.ddm-group.ch and/or by telephone with dial-in numbers: SE: +46 8 566 426 62, CH: +41 225 675 548 or UK: +44 203 008 9801.
The information in this interim and full year report requires DDM Treasury Sweden AB (publ) to publish the information in accordance with the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication on 28 February 2017 at 8:00 a.m. CET.