Axactor (ACR) Q2 2024 earnings summary

Executive summary

• Gross revenue declined 2% year-over-year, mainly due to macroeconomic headwinds, government debt relief, and moderate 2023 investments.

• Cash EBITDA rose 3% year-over-year to EUR 61.1 million, supported by strict cost control and reduced operating expenses.

• EBITDA margin remained strong at 51%, with EBITDA at EUR 30.3 million, down from EUR 33 million last year.

• Annualized return on equity was 4%, pressured by high interest rates and a challenging collection environment.

• Net profit after tax for Q2 2024 was EUR 4.3 million, down from EUR 10.6 million in Q2 2023.

Financial highlights

• Total income for Q2 2024 was EUR 59.1 million, down from EUR 65 million in Q2 2023.

• Cash EBITDA for Q2 2024 grew 3% to EUR 61.1 million.

• OPEX ratio dropped to 32%, the lowest recorded in a single quarter, driving EBITDA growth.

• NPL investments ramped up to EUR 70.4 million in Q2 2024, with gross IRR on the NPL book up to 19%.

• Collection performance at 93% for the quarter.

Outlook and guidance

• Challenging collection environment and cost inflation expected to persist through 2024.

• Management expects to absorb cost inflation through further OpEx reductions.

• Investment target for 2024 remains EUR 100–200 million, with EUR 81.2 million invested YTD Q2.

• Only modest reduction in funding costs expected in 2024 due to slow interest rate declines.

• Compliance with all covenants as of Q2, but limited headroom on leverage and interest coverage ratios.