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Delfin Group Interim / Quarterly Report 2024
2238_rns_2024-08-09_05ccefd4-404c-4e18-9ce3-7f6862eef5fa.pdf
Interim / Quarterly Report
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Financial report
Be the best place for everyday financial services and circular retail VISION
VALUES
Progress Respect
Courage Customer-oriented
Unaudited results for 6 months Ending 30 June 2024
Key results
Business highlights Business performance Q&A session
Key results
Total loans issued
Total revenue
Net loan portfolio
Profit before tax
In Q2 2024, the company reached a record-high loan issuance amount of EUR 26.1 million, a 20% increase year on year as a result of stronger loan issuance.
The net loan portfolio increased by 14% in the first six months of 2024, reaching EUR 101.5 million.
Quarterly revenues reached another all-time high, reaching EUR 14.8 million, a 24% growth compared to the previous year. All of the business lines have contributed to the revenue growth, but mainly consumer lending.
Profit before tax in Q2 reached EUR 2.3 million. Over the last twelve months, growth of the profit has been mainly affected by increasing interest and credit loss expenses due to a growing loan portfolio.
Highlights: consumer lending
- Stable growth results in the consumer lending segment.
- Focus on promotion of the new credit line product with virtual card.
- Work on mobile app improvements to provide the best user experience.
- Preparation for launch of consumer lending in Lithuania.
Highlights: pawn lending
Digitalisation is a driver for the pawn lending segment in future.
- In Q2, DelfinGroup launched a digital pawnshop solution.
- This is the first fully remote pawn lending experience in the Baltics.
- The new service allows people to obtain a secured loan by completing an online application with no additional fees.
- The contract is signed remotely, and the goods are sent to the branch via parcel machine.
Highlights: Retail of pre-owned goods
Key results
Business highlights
Business performance
Q&A session
Expansion in Lithuania
Consumer lending licence received
- Admission to the public list of consumer loan service providers in Lithuania.
- Up-to-date consumer lending is the largest business segment for DelfinGroup.
- The company plans to start offering consumer lending services in Q3 2024.
Branch network expands to 7 stores
- Continued work on existing business segment expansion in Lithuania – pawn lending and retail of pre-owned goods.
- Banknote brand presence and customer demand increase month-over-month.
- Two new branches were opened in Vilnius in July 2024.
Branch network development in Latvia
Efficiency of the branch network has been set as a focus in Latvia to secure sustainable business operations.
Opening of new branches and expansion of Banknote XL network:
New Banknote XL branch in Daugavpils, Saules iela 55
New Banknote XL branch in Rēzekne, Atbrīvošanas aleja 119
New branch in Balvi, Brīvības iela 57
New branch in Riga, Melnsila iela 22A
Capital markets highlights
| PUBLIC BOND ISSUE |
• DelfinGroup plans a new public bond issue of up to EUR 15 million. • The aim is to refinance the existing bond of EUR 10 million with maturity in September 2024. • Available for Baltic retail and institutional investors with an affordable min. investment amount. DelfinGroup has a proven track-record with 7 repaid bond issues over a 10-year period. • |
|---|---|
| STOCK | • Shareholder count surpassed 9 500 shareholders. One of the highest free floats on the Baltic stock exchange of 47%. • |
| BONDS & P2P | Bondholder count surpassed 500 bondholders. • • One of the best risk scores on Mintos investment platform. Banknote risk score on Mintos platform reached 8.7 and VIZIA 9.0 (10 being the best score). • |
Team development
The DelfinGroup team is constantly developing to support the company's ambitious goals of increasing its value.
A seasoned fintech professional, Edgars Kokins, joined DelfinGroup as Chief Revenue Officer. Edgars will drive processes related to increasing DelfinGroup product and service sales.
COO Sanita Pudnika resigned from the Management Board position at the end of June 2024. Since then, the COO role has been transformed.
New Country Manager joined the team to support expansion in Lithuania.
Focus on strengthening data and marketing teams. Upcoming changes in finance team.
Banknote online store
Banknote online store is a fast-growing sales channel where clients can conveniently purchase pre-owned and verified items.
Use promo code DGBONDS until 31 August 2024 and receive a 15% discount at Banknote online stores for jewelry purchases!*
*Excluding investment gold and coins. Discounts do not add up.
Key results
Business highlights
Business performance
Q&A session
Consumer loans
Weighted average term of loans
Consumer net loan portfolio
Average loan*
Non-performing loan ratio
The consumer lending portfolio continued increasing, as did the average loan amount and term. At the end of Q2 2024, the net loan portfolio reached 92.9 million euros.
Due to stable demand and increasing ticket and term size, the consumer loan portfolio grew by 30% over a 12-month period.
Strong focus on loan portfolio quality that ensures solid NPL ratio level which is in line with DelfinGroup expectation.
issued
*Average consumer loan balance for one client at the end of period. **Increase of Q3 2022 NPL ratio due to reversal of a one-off cession deal.
Age analysis of consumer lending portfolio*
Consumer loan portfolio quality remains stable with current loans of more than 87%.
Continued focus on lower-risk lending clients to reduce portfolio expenses.
A result of a thorough and databased client underwriting processes.
Pawn loans
Pawn net loan portfolio*
Average pawn loan amount
Repaid pawn loans**
The pawn lending segment continues to show stable results. The pawn loan portfolio has increased by 11% in the last six months.
Average pawn loan amount has grown over the last year as the inflation has pushed up prices for items and jewelry.
Redemption rate of pledged items remain stable around 70% over the last years.
* Active portfolio excluding portfolio part where collateral is available for sale. ** Pawn loans repaid or extended within 2 months since issuance. *** Q2 2024 is represented only for June as methodology and the data acquisition system was changed during the period.
Retail of pre-owned goods*
Sale of pre-owned goods**
Gross margin***
Stable and consistent growth has been achieved in the retail segment by promoting the circular economy principles in Latvia and Lithuania.
Retail sales of pre-owned goods in Q2 2024 increased by 14% compared to last year's respective period, reaching EUR 4 million.
The gross margin is, on average, around 40%, slightly increasing in Q2 2024 due to rising gold prices.
*Excluding wholesale of precious metals (scrap). **Including directly purchased goods from clients and unredeemed items from pawnshop. ***2023 gross margin figures restated as per audited annual statements of 2023.
Sales split by product category
Sales split by product category (6M 2024)
Clients have access to a wide range of pre-owned goods at Banknote online store and branch network. The most demanded product categories are electronics, such as smartphones, computers, TVs and jewelry.
Jewelry is polished and sold with its original appearance but for a more affordable price.
Diversification
Although the most significant part of the revenue stream comes from the consumer loan segment, we see great potential in gradually growing other DelfinGroup segments.
Revenue by business segments 6M 2024
Distribution of active clients by age on 31 March 2024***
1% 12% 21% 20% 17% 16% 12% 18-19 20-29 30-39 40-49 50-59 60-69 70+
DelfinGroup products cover all age groups thanks to customised financial solutions.
*including sold pawn pledges and pledge storage commissions **excluding wholesale of precious metals (scrap) and pawn pledges ***Active consumer lending segment clients
Consolidated income statement
| INCOME STATEMENT, EUR'000 | 2024 Q2 |
2023 Q2 |
Change % |
2024 6M |
2023 6M |
Change % |
|---|---|---|---|---|---|---|
| Total revenue | 14,838 | 11,970 | +24% | 29,098 | 23,303 | +25% |
| Cost of sales | -1,166 | -1,096 | +6% | -2,670 | -2,468 | +8% |
| Credit loss expense | -3,550 | -2,769 | +28% | -6,971 | -5,236 | +33% |
| Interest expenses and similar expenses |
-2,662 | -2,052 | +30% | -5,222 | -3,844 | +36% |
| Gross profit | 7,461 | 6,052 | +23% | 14,233 | 11,754 | +21% |
| Selling expenses | -2,575 | -2,054 | +25% | -5,163 | -4,116 | +25% |
| Administrative expenses | -2,482 | -1,957 | +27% | -4,550 | -3,723 | +22% |
| Other operating income | 38 | 12 | +214% | 62 | 27 | +132% |
| Other operating expenses | -117 | -82 | +42% | -219 | -146 | +50% |
| Profit before tax | 2,324 | 1,971 | +18% | 4,363 | 3,797 | +15% |
| Income tax expense | -482 | -202 | +138%* | -902 | -414 | +118%* |
| Net profit | 1,842 | 1,769 | +4% | 3,461 | 3,382 | +2% |
| EBITDA | 5,422 | 4,345 | +25% | 10,450 | 8,268 | +26% |
* Increase of tax due to approved changes in corporate income tax law at the end of 2023. As a result, tax is calculated from full profit amount whereas in Q1 2023 tax was calculated only from the approved dividends.
Consolidated balance sheet
| BALANCE SHEET, EUR'000 | 30.06.2024 | 31.12.2023 | Change % |
|---|---|---|---|
| Fixed and intangible assets | 3,032 | 2,680 | +13% |
| Right-of-use assets | 2,804 | 2,887 | -3% |
| Net loan portfolio | 101,549 | 89,026 | +14% |
| Inventory and scrap | 3,782 | 3,391 | +12% |
| Other assets | 1,860 | 1,149 | +62% |
| Cash | 4,354 | 5,929 | -27% |
| TOTAL ASSETS | 117,381 | 105,061 | +12% |
| EQUITY | 22,972 | 21,322 | +8% |
| Share capital and reserves | 4,538 | 4,538 | +0% |
| Share premium | 6,891 | 6,891 | +0% |
| Other capital reserves | 215 | 170 | +26% |
| Retained earnings | 11,329 | 9,724 | +17% |
| LIABILITIES | 94,409 | 83,739 | +13% |
| Interest-bearing debt | 86,298 | 76,971 | +12% |
| Trade payables and other liabilities | 5,015 | 3,600 | +39% |
| Lease liabilities for right-of-use assets |
3,096 | 3,168 | -2% |
| TOTAL EQUITY AND LIABILITIES | 117,381 | 105,061 | +12% |
Financial ratios
EBITDA margin*
ROE**
Equity ratio
Adjusted equity ratio including subordinated bonds
Cost of interest-bearing liabilities
Decrease of ROE starting from Q4 2023 due to changes in corporate income tax legislation in Latvia. All tax amount was attributed to Q4 2023.
Interest coverage ratio*
**Annualized.
Cost-to-income ratio*
Capital structure
Capital structure 30.06.2024
Bond financing track record*
DelfinGroup on Mintos
- Since 2016
- 80+ thousand active investors
- Investors from 100+ countries
On 25 July shareholders approved the company's intention to organise a new bond issue in the Baltic States. The company plans to issue a total of 15 million euros in bonds in all three Baltic States, attracting retail and institutional investors. The funds raised will be used to refinance existing bonds and liabilities.
Dividends
Dividend yield of 7.9%*
Unique dividend distribution proposal in Baltics
Quarterly dividends
- At least 4 dividend payments per year
- Up to 50% from previous Q profit
| Dividend period |
Dividend payment date |
EUR/share | EUR total | Payout ratio*** |
|---|---|---|---|---|
| Q2 2024 | Upon shareholders approval** |
0.0202** | 916 626** | 49.76%** |
| Q1 2024 | 14.06.2024 | 0.0178 | 807 720 | 49.89% |
| Q4 2023 | 16.04.2024 | 0.0143 | 648 898 | 49.99% |
| Q3 2023 | 28.12.2023 | 0.0214 | 969 839 | 49.80% |
| Q2 2023 | 29.09.2023 | 0.0195 | 883 732 | 49.95% |
| Q1 2023 | 30.06.2023 | 0.0177 | 802 157 | 49.73% |
| Dividend period |
Dividend payment date |
EUR/share | EUR total | |
|---|---|---|---|---|
| Annual | 12.07.2024 | 0.0088 | 399 322 | |
| Annual | 17.05.2022 15.07.2022 |
0.0552 | 2 501 642 |
*Based on share price of EUR 1.042 on 5 May 2024 and including management's proposed dividends from Q2 2024 net profit. **Proposed dividends, distribution is subject to Shareholders meeting decision. ***Dividend amount paid from the net profit of the respective quarter.
Share performance
Share price and turnover, €
| 30.06.2024 | DelfinGroup | Financial industry* |
|---|---|---|
| a italization m € | 49.3 | - |
| E M € |
0.149 | - |
| P/E | 7.29 | 6.14 |
| ROE | 33.3% | 19.5% |
Share dynamics compared to indexes
Decrease of the share price since Q2 2023 due to the largest sharehol er's public share offerings. In Q2 2023 the shares were offered at a discount from the previous market price of EUR 1.35 per share and in Q2 2024 the shares were offered at EUR 1.09.
DelfinGroup investors have received additionally EUR 0.249 per share in dividends since IPO.
*Average ratio for financial services companies listed on Nasdaq Baltic Main list on 30.06.2024. as per last published financial data.
Q&A session
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Icon Description automatically generated Use promo code DGBONDS until 31 August 2024 and receive a 15% discount at Banknote online stores for jewelry purchases!*
shop.banknote.lt veikals.banknote.lv *Excluding investment gold and coins. Discounts do not add up.
