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 strong solvency at 195%.

• Turnover was €923 million, down 3.1% year-over-year, mainly due to a 5.3% drop in trade credit insurance premiums amid sluggish client activity.

• Service revenues grew 6.5%, with business information up 16.9% and third-party debt collection up over 20%.

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

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

Financial highlights

• Gross earned premiums fell 5.3% year-over-year to €754.3 million, while other revenues rose 7.9% to €168.5 million.

• Net financial income surged to €40.8 million, driven by realized capital gains and higher yields on new investments.

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

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

• Shareholders' equity stood at €2,002.9 million, down 2.3% from year-end 2023, mainly due to dividend payments.

Outlook and guidance

• Management refrained from providing forward-looking statements due to economic uncertainty, but continues to invest in business information, technology, and services as part of the Power the Core plan.

• Strategic focus on growing business information and services to offset short-term declines in trade credit insurance.

• Management expects ongoing pressure from slowing economies, inflation, and claims normalization.