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A record year for the BEST Group

A dynamic improvement in performance and one of the lowest debt ratios in the industry.

 

The operating revenue of the BEST Group earned in 2013 reached almost 124 million PLN, i.e. about 61% more than in 2012. On the other hand, comprehensive income attributable to BEST shareholders amounted to 71.5 million PLN, which represents an increase of 162%.

 

In 2013 the financial performance of the BEST Group, an entity specialising in acquisition and collection of debt portfolios, was the highest in the Company’s history. Operating revenue reached almost 123.9 million PLN, i.e. was about 46.8 million PLN (61%) higher than in 2012. This increase is observed mainly in the 'Debt Investment' Segment and results from BEST's taking control over the BEST I NSFIZ securitisation fund in November 2012. In 2013, the operating revenue of that fund accounted for nearly 52% of the BEST Group revenue. A significant portion of this revenue was attributable to an increase in the value of debt portfolio holdings.

 

- BEST is both the owner and the manager of BEST I NSFIZ. After six months of managing the fund in 2013, eliminating the risks and implementing an optimal strategy for its service, we were able to lower the discount rate (known as risk premium) applied to valuation of the expected future proceeds. Revaluation of debt portfolios owned by BEST I NSFIZ added approx. 30 million PLN to the Group's results,” explains Krzysztof Borusowski, President of BEST. As a result, after four quarters of 2013, the BEST Group's comprehensive income attributable to the Company shareholders amounted to 71.5 million PLN and outperformed the 2012 figure by 162%.

 

An important factor for the assessment of the BEST Group's standing is the debt ratio, which has long been among the lowest in the industry. At the end of Q4 2013, the net debt to equity ratio stood at 0.39, while the level accepted by the current bondholders of BEST ranges between 2.0 and 2.5.

 

“This ratio is crucial for investors because it shows the extent to which the company uses financial leverage. With the current level of cash and equity, we are thus able to raise additional debt financing in a considerable amount. The programme of public issue of bonds, which we have just announced, assuming the acquisition of up to 300 million PLN, fits squarely into the current financial parameters of the BEST Group,” comments Marek Kucner, Vice-President of BEST in charge of finance.

 

The BEST Group results recorded in Q4 2013 alone were lower than those recorded in the same period last year. This is mainly due to the fact that in late 2012 BEST bought BEST I NSFIZ and in Q4 recognised the transaction-related profit. Moreover, while comparing the quarterly results of the BEST Group, one should also note that a significant portion of its operating revenue is related to the profit earned on investments in debt portfolios, acquired by securitisation funds. Profit-taking occurs when the fund certificates are redeemed, which in turn is the consequence of current investors' needs and the fund capabilities. For this reason, the BEST Group's revenue associated with the redemption of fund certificates occurs at different times and with varying intensity.

 

A significant impact on the BEST Group's performance has also been exerted by the change in value of its shareholding in BEST III NSFIZ, which is jointly controlled by BEST (50%) and the Hoist Group (50%). The last quarter of 2013 was unique in this respect, since the value of redeemed certificates (nearly 9 million PLN) was higher than the increase in the value of certificates still held by the BEST Group at the end of the period. As a result, the total impact of those events on Q4 revenue was negative and stood at minus 1.36 million 

PLN. On the other hand, the value of certificates redeemed throughout 2013 was significantly lower than the increase in the value of certificates still held by the BEST Group at year end. Therefore, the effect was positive and amounted to 9.26 million PLN.

 

Financial highlights of the BEST Group:

(in million PLN)

Q3 2013

Q4 2012

Y/y change

2013

2012

Y/y change

Operating revenue

19.7

28.1

-30%

123.9

77.0

+62%

Profit on sales

7.1

15.6

-55%

79.5

39.4

+102%

Net profit*

4.6

12.0

-62%

69.7

26.2

+166%

Comprehensive income*

5.2

12.8

-60%

71.5

27.3

+162%

* attributable to BEST Shareholders

 

 

***

This material is for promotional purposes only. The legally binding document containing information on the bond issue programme developed by BEST S.A. and the bonds issued as part of the programme is the basic prospectus which will be published on the BEST S.A. website (www.best.com.pl) following the approval thereof by the Polish Financial Supervision Authority (KNF). The Bonds will not constitute a bank deposit or be covered by the deposit guarantee scheme.

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