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BEST Capital Group continued to improve operational efficiency in 2019

BEST Capital Group’s operating revenues in 2019 exceeded PLN 222 million, while its consolidated operating profit amounted to nearly PLN 85 million. This means an increase of more than ten percent compared to 2018, despite the negative impact of the revaluation of claim portfolios on the Group’s results. This non-cash event decreased last year’s revenues and profits by PLN 40 million.

 

Non-performing debt portfolios managed by BEST Capital Group are its main source of revenue. In spite of limited investments in new portfolios, total repayments from the managed claims in 2019 remained high and exceeded PLN 299 million, of which PLN 263 million are repayments directly due to BEST Capital Group, while PLN 36 million are repayments due to a co-investor in the fund BEST III NSFIZ (BEST Capital Group has a 50% share in this fund).

 

Our consolidated operating revenues in the past year amounted to PLN 222.2 million, up by 17% compared to 2018. By observing a strict cost regime, BEST Capital Group managed to generate PLN 84.7 million of operating profit, i.e. 13% more than a year earlier, despite having incurred significant costs in 2019 due to court and enforcement fees in connection with activities aimed at securing the assets held.

 

– In 2019, we were approaching an economic downturn, and at a time like this, the prices of claims offered for sale are high. Consequently, we focused on improving our operations, the collection rate of claims acquired in previous years and cost efficiency. We are happy with the results, and the current market situation confirms our belief that this was the right decision. We have also prepared for repaying our liabilities, and we are approaching the maturity dates of our bonds with confidence – said Krzysztof Borusowski, President of the Management Board of BEST.

 

A non-cash event – the revaluation of our claim portfolios – had a significantly adverse effect on the financial results presented in the financial statements for 2019, leading to a decrease of last year’s revenues and operating profit by PLN 40 million.

 

The total consolidated net profit of BEST CG in 2019 amounted to PLN 43.4 million, up by 24% compared to 2018. The net profit attributed to BEST’s shareholders was lower than a year ago and amounted to PLN 20.3 million, which was due to the above-mentioned negative revaluation of claims, but it did not affect the fund BEST III NSFIZ.

 

In 2019, the full cash EBITDA of BEST CG remained high at PLN 222.9 million, compared to PLN 220.4 million a year earlier.

 

– With our earnings from the operating activities, we were able to punctually repay PLN 126 million worth of financial liabilities, including the redemption of another series of bonds worth PLN 35 million. With limited investments in new portfolios, the basic debt ratio of BEST CG, i.e. the ratio of net debt to equity, decreased to 1.03 at the end of 2019, and was one of the lowest in the industry. This is also the lowest this ratio has been since 2014 based on end-of-year balance – said Marek Kucner, Vice-President of the Management Board of BEST.

 

The Management Board is confident that BEST CG is well prepared for uncertain times on the markets due to the COVID-19 pandemic and related restrictions.

 

– So far, the coronavirus pandemic has not caused any disruptions to the operating activities of BEST CG. Since the day the state of epidemic was announced in Poland, we have provided telework opportunities for a large part of our team and ensured continuity of key processes. We have not yet observed any significant deviations in the repayment of claims. Before publishing the annual report for 2019, we presented information on repayments made from claims managed in the first quarter of 2020, which reached a record level of a total of PLN 86.6 million, of which repayments due to BEST Capital Group amounted to PLN 77.8 million, a 33% increase compared to the corresponding period of 2019. Since the beginning of this year, we have also punctually redeemed three series of bonds with a total nominal value of PLN 110 million – added Krzysztof Borusowski.

 

Full financial results of BEST CG for the first quarter of 2020 will be published on 19 June this year.

 

Selected financial results of BEST Group

(PLN million)

2019

2018

change YOY

operating revenues

222.2

190.2

+17%

operating profit (EBIT)

84.7

75.1

+13%

net profit, of which:

43.4

34.9

+24%

  attributable to BEST’s shareholders

20.3

32.1

-37%

full cash EBITDA

222.9

220.4

+1%

 

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