Generalfinance (GF) Q2 2024 earnings summary

Executive summary

• Net profit for H1 2024 reached €8 million, up 19% year-over-year, with turnover rising 20% to €1,369 million and strong growth in distressed financing.

• ROE stood at 27%, and cost/income ratio improved to 35% from 39% a year earlier.

• Acquisition of Workinvoice for €6.4 million announced, aiming to enhance digital lending and fintech capabilities, with integration expected by year-end.

• Expansion into Spain planned, with operations expected to start in autumn, pending regulatory approval.

• Shareholders' equity increased to €67 million as of June 30, 2024, and capital ratios remain well above regulatory requirements.

Financial highlights

• Net banking income rose over 28% year-over-year to €21 million, driven by a 29% increase in interest margin and net commissions.

• Operating costs increased 17% year-over-year to €7.4 million, mainly due to staff and non-recurring expenses.

• Cost/income ratio improved to 35.4% in H1 2024 from 39.1% in H1 2023.

• Pre-tax profit from current operations was €12.1 million, up 25% year-over-year.

• Gross non-performing loans increased to €7.6 million, with a gross NPE ratio of 1.75%.

Outlook and guidance

• Guidance for year-end net income confirmed at over €20 million, with business performance in line with the current Business Plan.

• Commercial performance and profitability are forecast to accelerate in the second half of the year.

• Workinvoice acquisition and Spanish expansion not yet factored into current guidance.

• Renewal processes for key funding lines and securitisation are underway and expected to conclude by year-end.

• The company is monitoring macroeconomic and geopolitical risks, including the Russia-Ukraine conflict and inflationary pressures.