In light of the Covid-19 pandemic and the current market situation, B2Holding provides an update on the Company’s operations and financial position.
B2Holding has presence in 23 countries across Europe, and the Company sees large variations on how operations are affected by the Covid-19 pandemic. In this challenging situation, the primary focus of the Company has been the safety and health of the employees. Since mid-March, the Group entities have successfully managed to shift more than 90% of the operations to remote home offices. The operational impact is limited to a minimum and all business activities continue to operate as before the crisis.
Business operations
The impact on collections have been limited during the first quarter, as March was the first month where the effects of the pandemic became visible. As of today, we see limited impact in Northern Europe where the Estimated Remaining Collections (ERC) represent 36 % of total ERC in B2Holding per year end 2019. Of the countries most affected by the pandemic at this point, such as Italy and Spain with a combined ERC of around 7 %, we observe a larger reduction in collections so far. France, which represents around 5% of ERC, is less affected so far.
In the South Eastern European countries, representing 13% of ERC, the collections are moderately impacted so far. The same is the case in Poland which represents 16% of ERC. In the Central European countries, representing 23% of ERC, the Balkan countries are most affected also as a result of the relatively large earthquake in Zagreb on March 22. Czech and Hungary are less affected so far. Going forward the Company expects collections to be affected by the pandemic, but we still have limited visibility on the actual effect on collections and would need to collect more data over a longer period of time in order to observe trends.
As we are well diversified geographically and we observe moderate to low impact in most of our countries, we are less impacted as a group by those countries most affected by the pandemic.
Ethical and responsible collections drive our business in these challenging times. Now, more than ever, our commitment to act in a sustainable manner and safeguarding a respectful treatment of customers is prevalent in our organisation. We closely monitor our operations to ensure that we fulfill our social responsibility with the required sensibility towards those customers that are most vulnerable.
Financial position
With reference to the corporate update provided in connection with the bond buy-back on 19 March 2020, the financial position of B2Holding is solid. Per end of March, B2Holding had a liquidity reserve of EUR 243 million. As was also stated in the corporate update 19 March, the Group has temporary reduced portfolio purchases to a minimum in order to preserve and strengthen liquidity going forward.
“B2Holding has a robust balance sheet and a good foundation to face the uncertain business outlook. Nevertheless, the implemented restrictions to prevent the spread of the virus will have a negative impact on European economies and will also affect our collections and recoveries and consequently our results in 2020. Although the short-term market outlook is uncertain, we believe that the NPL volumes coming to the market post the crisis will increase, with a potential positive effect on pricing of portfolios and increased yields. With NPL volumes expected to increase, we also see a potential for increased servicing revenues”, says Erik J. Johnsen, CEO of B2Holding ASA.
Cancellation of proposed dividend for 2019
On 28 February 2020, the Board of Director's announced its intention to propose a dividend of NOK 0.08 per share for the financial year 2019 to the Annual General Meeting. Due to the uncertainty associated with the Covid-19 pandemic and unknown macroeconomic consequences, the Board of Directors has resolved to cancel the previously announced proposal to pay a cash dividend of NOK0.08 per share for 2019.
This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.
For further information, please contact:
Erik J. Johnsen
CEO, B2Holding ASA
Mobile: +47 415 77 055
E-mail: ejj@b2holding.no
or
Rasmus Hansson
Head of M&A and Investor Relations, B2Holding ASA
Mobile: +47 952 55 842
E-mail: rh@b2holding.no
