· Consolidated net revenues for the second quarter of 2013 amounted to SEK 1,152 M (1,037). · Operating earnings (EBIT) amounted to SEK 301 M (218). Operating earnings include positive revaluations of purchased debt portfolios amounting to SEK 6 M (3). · Both including and excluding revaluations of purchased debt portfolios, the operating margin was 26 percent (21). · Net earnings for the quarter amounted to SEK 206 M (139) and earnings per share were SEK 2.57 (1.77). · Disbursements for investments in Purchased debt amounted to SEK 597 M (667). · Cash flow from operating activities amounted to SEK 621 M (428).
Comment by President and CEO Lars Wollung
Intrum Justitia has seen positive developments during the first half of 2013, with healthy growth in earnings and an improvement in the operating margin over the second quarter. The operating margin amounted to 26 percent and operating earnings were up 42 percent, adjusted for revaluations of purchased debt portfolios and currency effects, compared with the year-earlier period. On a rolling 12-month basis, earnings per share increased by 25 percent. Cash flow from operations rose 45 percent to SEK 621 M.
We are seeing persistently strong growth within the service line Financial Services. Purchased debt investments amounted to SEK 597 M, an excellent level considering the fact that few major portfolio acquisitions were made over the quarter. Stability in our business for the purchasing of receivables is therefore good, with an extremely well diversified portfolio. The return on the portfolios amounted to 22 percent, well above the targeted 15 percent.
Credit Management demonstrated growth in both revenues and operating earnings in the second quarter, partly driven by increased volumes from our purchased debt portfolios. Our operational improvement measures are achieving the desired results and we are continuing with our drive to increase internal efficiency to ensure long-term growth.
Our investment in a new service line, Intrum Justitia Finance, is developing according to plan. We see good potential for this business to boost the Group's long-term growth. Intrum Justitia Finance offers services early in the payment chain that complement the existing Credit Management and Financial Services offerings, initially with factoring services and various payment and financing solutions for e-trade.
In the second quarter we saw positive developments in all three of our geographical regions. There was a beneficial impact on the regions from an increased level of investment in purchased debt. Moreover we are seeing positive effects from us increasing the number of cases being pursued in the legal systems, primarily in Northern and Central Europe. In Western Europe we are reaping the benefits of our streamlining work on credit management operations. We are, however, still facing challenges in the region following the uncertain macro situation in several countries.
In the second quarter, Intrum Justitia also issued SEK 1 billion in bonds within the framework of its MTN program. This has enabled us to secure additional financing for continued expansion and further diversifies our borrowing.
Presentation of the Interim Report
The interim report and presentation material are available at www.intrum.com/Investor relations. President & CEO Lars Wollung and Chief Financial Officer Erik Forsberg will comment on the report at a teleconference today, starting at 9:00 a.m. CET. The presentation can be followed at www.intrum.com and/or www.financialhearings.com. To participate by phone, call +46 (0)8 505 56478 (SE) or +44 (0)20 336 45372 (UK).
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