COFACE (COFA) Q2 2024 earnings summary

Executive summary

• Net income for H1 2024 reached €142.3 million, up 10.4% year-over-year, with annualized ROATE at 15.3% and solvency ratio at 195%, above the target range.

• Turnover declined 3.1% year-over-year to €923 million, mainly due to a 5.3% drop in trade credit insurance premiums, while business information and service revenues grew double digits.

• Combined ratio improved to 63.4%, with a net loss ratio of 35%, five points better than last year.

• Return on average tangible equity rose to 15.3% from 13.4% last year.

• Solvency ratio at 195%, above the 155–175% target range, supporting financial strength and growth opportunities.

Financial highlights

• Operating income increased by 17.5% year-over-year to €217.2 million.

• Recurring investment income for H1 2024 was €48 million, with average accounting yield at 1.7%.

• Realized gains from divestment in money market funds and capital gains contributed to strong financial income.

• Insurance finance expenses stabilized at €18 million.

• Book value per share stands at €13.4; tangible book value per share at €11.8.

Outlook and guidance

• Management refrained from providing forward-looking statements due to economic uncertainty, but global growth forecast slightly raised to 2.5% for 2024.

• Demand for credit insurance is expected to remain strong amid heightened risk and volatility.

• Persistent moderate inflation and political risks could pressure margins and increase company failures.

• Investments in business information, technology, and data will continue as part of the Power the Core plan.

• Services growth is offsetting short-term trade credit insurance decline; focus remains on strategic plan execution.