News and Press releases
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DDM Holding AG
DDM Debt AB
DDM Treasury Sweden AB
DDM Debt AB: Q4 and year-end 2016 report
Net profit of EUR 4.2 million for the first period of operations and new EUR 50 million bond issued in 2017
- Net collections of EUR 9.7M
- Cash EBITDA of EUR 8.7M
- Net profit for the period of EUR 4.2M
- A significant transaction in Slovenia was completed in July, with a cash investment amount of EUR 17M
- EUR 11M bond at 13% interest was issued in July to finance the investment in Slovenia
- Loan repayments of approximately EUR 4.5M relating to the EUR 11M bond
- Pipeline of future transactions remains strong
Highlights fourth quarter 2016
- Net collections of EUR 4.5M
- Cash EBITDA of EUR 4.1M
- Net profit for the period of EUR 0.8M
- Loan repayments of approximately EUR 1.6M relating to the EUR 11M bond
Significant events after the end of 2016
- Further loan repayments of approximately EUR 3.4M were made in January
- EUR 50M of senior secured bonds at 9.5% were issued by DDM Debt AB in January 2017, with the proceeds used to refinance existing debt within the DDM Holding Group, to acquire DDM Treasury Sweden AB’s subsidiaries holding the portfolios and for future portfolio acquisitions
Comment by the CEO
DDM Debt’s first period of operations, from 3 March to 31 December 2016 was marked by the closing of a landmark transaction for DDM in July. We invested approximately EUR 17M in Slovenia in a portfolio of non-performing banking claims. The acquisition was funded by a bond of EUR 11M issued in July, along with additional funding raised by DDM Holding AG. The bond at 13% interest had a maturity date 12 months from the issuance date and monthly repayments were made.
Net collections from the Slovenian acquisition were strong in both the fourth quarter of 2016 and for the period 3 March to 31 December 2016, amounting to EUR 4.5M and EUR 9.7M respectively.
Cash EBITDA (net collections less operating expenses) for the fourth quarter was EUR 4.1M and for the period 3 March to 31 December 2016 amounted to EUR 8.7M.
Cash flow from operating activities before working capital changes for the fourth quarter was EUR 4.0M and for the period 3 March to 31 December 2016 was EUR 7.4M, due to the strong performance of the Slovenian portfolio. On the back of the strong cash flows, in accordance with the terms and conditions of the EUR 11M bond issued in July 2016 in connection to the first Slovenian portfolio acquisition, repayments of approximately EUR 1.6M were made during the fourth quarter, resulting in total repayments of approximately EUR 4.5M in 2016. Since the end of 2016 further loan repayments of approximately EUR 3.4M were made on the EUR 11M bond in January. This means that 72% of the bond was repaid at 31 January 2017.
These positive developments have continued in 2017 and DDM Debt AB successfully issued EUR 50M of senior secured bonds in January. The new bonds have a final maturity date in January 2020 and a 9.5% coupon rate, which is significantly lower than our previous cost of funding. This is another important step in improving the capital structure. Part of the proceeds were used to refinance existing debt within the DDM Holding Group and to acquire DDM Treasury Sweden AB’s subsidiaries holding the portfolios, with the balance to be used for future portfolio acquisitions.
We continue to see strong growth in the pipeline of portfolios for sale across our region. DDM continues to receive a significant number of invites to bid for large portfolios and we are well placed to continue the rapid expansion in our investment activities.
Given the large amount of investment opportunities, funding continues to be a key focus to sustain growth. We are targeting further improvements in our capital structure. With the strong cash flows and recent bond issuance we remain positive on the outlook for DDM and feel confident that we will be able to continue to deliver according to our strategy.
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 year-end report requires DDM Debt 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.