Solid start to 2024 delivering net profit of €9.6 million and Adjusted EBITDA of €34.9 million
Robust balance sheet and cash position
Fitch assigns new credit rating of ‘B’ with stable outlook
Operational highlights
• Online loan issuance volume of €138.6 million in the Period compared with €137.0 million in the prior year period. Demand for credit remains strong in most markets, with growth driven by the Czech Republic and Spain.
• New growth opportunities: taking a deliberate, step-by-step approach. Encouraging signs from both the UK joint venture (ondal.co.uk) and the Mexican business (kimbi.mx).
• TBI Bank loan issuance increased by 22% to €251.4 million in the Period, compared to €206.4 million in Q1 2023.
Financial Highlights
• Interest income up 13% year-on-year to €103.9 million in the Period compared with €91.7 million in the prior year period.
• Cost to income ratio for the Period was 43.3%, an improvement from 46.0% in the prior year period, despite the increase in total operating costs year-on-year.
• Adjusted EBITDA was €34.9 million for the Period, up 24% year-on-year, delivering a 34% adjusted EBITDA margin. The interest coverage ratio as of the date of this report is 2.0x, impacted by the increased interest expense at TBI Bank in recent quarters.
• Net profit for the Period was €9.6 million, a 70% increase from €5.6 million in the prior year period.
• Fundamental asset quality indicators at product level remain broadly stable. Net impairment charges of €41.3 million reflect the larger portfolio and different product mix in online. Cost of risk at 13.4% for Q1 2024, a slight improvement from FY 2023.
• Net receivables up 3% to €1,120.6 million as of 31 March 2024 compared with €1,084.4 million as of 31 December 2023.
• Overall gross NPL ratio at 9.9% as of 31 March 2024 (13.9% for online), compared with 9.4% as of 31 December 2023 (14.2% for online). TBI NPL ratio at 9.3% as of 31 March 2024, compared with 8.6% as of 31 December 2023.
Liquidity and funding
• Strong liquidity position, with €45.0 million of cash in the online business at the end of the Period.
• In March 2024, the Group repurchased €0.4 million notional of its EUR 2026 bonds from TBI Bank EAD.
• Second instalment payment of €6 million due for the sale of the Polish business received in April 2024.
• In May 2024, Fitch assigned new credit rating of ‘B’ with stable outlook.
Kieran Donnelly, CEO of 4finance, commented:
“We made a robust start to 2024 with gross income of €122 million, up 19% on the same period in 2023, and Adjusted EBITDA of €35 million, up 24% year-on-year as we sustain the momentum in our core business. Demand for convenient and responsible credit products remains strong.
“We're seeing good progress with our new operations in Mexico and are about to move to the next stage in the UK joint venture; while TBI Bank continues to develop both as an asset and as a profit centre.”
