Hoist Finance (HOFI) Q2 2024 earnings summary

Executive summary

• Profit before tax reached SEK 383m in Q2 2024, up from SEK 178m year-over-year, with return on equity at 18% (15% underlying, adjusted for non-recurring items).

• Net interest income grew 24% year-over-year, driven by portfolio growth, repricing, and optimized funding costs.

• Portfolio investments reached SEK 2.2bn in Q2, with total portfolio book value at SEK 26.8bn, up 13% year-over-year.

• Asset sales in Germany and Italy and efficiency improvements generated SEK 105m–150m in net gains; IT insourcing completed with SEK 30m one-time cost and expected SEK 40m annual savings from Q3 2024.

• Board decided to pursue Specialised Debt Restructurer (SDR) status, effective January 2025, simplifying the business model and improving regulatory capital treatment.

Financial highlights

• Total operating income increased 34% year-over-year to SEK 1,213m; underlying growth at 27% after adjusting for extraordinary items.

• Net profit for Q2 was SEK 274m, up 70% year-over-year; EPS at 2.87, a 98% increase.

• Collection performance remained strong at 106% for the quarter.

• Book value grew 13% year-over-year; investments of SEK 2.2bn in Q2, third consecutive quarter above SEK 2bn.

• Total costs increased 9% year-over-year, with indirect costs up 2%.

Outlook and guidance

• Financial targets unchanged: above 15% ROE, 15% EPS growth, and CET1 ratio 2.3-3.3 percentage points above regulatory requirements.

• Strong pipeline for Q3 and Q4, with SEK 2bn in signed portfolios post-quarter and continued investment pace expected.

• SDR status expected to add SEK 70m in annual net funding costs due to higher liquidity requirements, but seen as most cost-efficient solution.

• Capital Markets Day scheduled for September 12, 2024, to provide further updates.

• Full-year tax rate estimated at 21%; YTD effective tax rate at 18%.