DelfinGroup publishes its 2024 financial targets

Lending company AS DelfinGroup has published its financial targets for 2024. According to the plans, it looks to double the consolidated net loan portfolio by 2024, reaching €70 million. By increasing profitability, it plans to achieve a profit before tax of €12.9 million in 2024. This announcement replaces any other forward-looking information provided by AS DelfinGroup.

Judging by the historical alternative lending market data of Latvia’s Consumer Rights Protection Centre’s (PTAC), DelfinGroup estimates that in the coming years it plans to grow faster than the non-bank consumer lending market, reaching a 17% market share in 2024. The company expects 8% annual growth in Latvia’s overall non-bank consumer lending market during the coming years. According to DelfinGroup’s estimates, in 2020 AS DelfinGroup’s market share in the segment was 10%. It plans to strengthen its market position in the pawnshop services segment and reach 42% of the total pawnshop loan market portfolio by 2024. According to information available to the company, AS DelfinGroup’s market share in the pawnshop loan segment in Latvia reached 36% in 2020.

DelfinGroup’s Chairman comments

Didzis Ādmīdiņš, Chairman of AS DelfinGroup: “AS DelfinGroup’s ambitious performance targets are based on our experience and rapid growth rates to date, supported by a sound business strategy and corporate governance in line with the best practices. In the second half of this year, we plan an initial public offering (IPO) of shares and admission to trading on the Nasdaq Riga stock exchange regulated market. A successful IPO will reduce the company’s financial costs. Raising additional equity will enable the Company to strengthen its market position, focus on the development of existing products, as well as develop new consumer lending products for various groups of society.”

DelfinGroup’s financial targets for 2024

The financial targets for 2024 are based on and valid for the assumption of €10 million to €15 million being raised in the planned IPO process. The table summarizes the audited results of AS DelfinGroup for 2020 and its financial targets for 2024.

Indicator*2020 audited results2024 targets
Net loan portfolio€34.6 million€70 million
Cost-to-income ratio57%<45%
Cost of interest-bearing liabilities12.7%<8%
Return on Equity (ROE)44%>30%
Equity ratio20.1%>27%
EBITDA**€9.3 million€17.6 million
Profit before tax€4.65 million€12.9 million
Dividend payout ratio55%>50%

DelfinGroup’s member of management board & Chief Financial Officer comments

Kristaps Bergmanis, member of the management board and Chief Financial Officer, AS DelfinGroup: “The existing branch network is a solid foundation for serving a much larger customer base. As the company’s revenue grows, we plan to ensure higher overall efficiency and profitability of the company. We project that by the end of 2024, the cost-to-income ratio will decrease below 45%. Based on the planned IPO and presence in capital markets, our target is to reduce the cost of interest-bearing liabilities to below 8% per year in 2024.” 

Bonds issuance

On 9 July 2021, AS DelfinGroup issued bonds via private placement of €5 million with an annual coupon interest rate of 9.75%, thus continuing to execute its long-term strategy. Demand for bonds exceeded the issue volume 1.85 times. The proceeds from the bond issue are used to refinance current liabilities, which will ensure a reduction in the company’s total funding costs. For more on this, check out the recent blog post.

In March of this year, AS DelfinGroup announced plans for an initial public offering (IPO) of shares in the second half of 2021. To find out more about this event, those who are interested are welcome to sign up for the news on the company’s website:

About DelfinGroup

DelfinGroup, formerly known as SIA ExpressCredit, was founded in 2009 and is the owner company of the loan originators Banknote and VIZIA. DelfinGroup is the second-largest non-bank consumer lender in Latvia. Since its inception, the company has issued €303 million of pawn loans and consumer loans, and the client base has reached almost 400 000 customers. In 2020, the company’s revenue was €23.7 million, the loan portfolio reached €34.7 million, EBITDA increased to €9.3 million, and profit before taxes reached €4.6 million. Starting from 6 May 2021, there have been changes in the ownership structure, and some equity investors overlap with Mintos.

*APM (alternative performance measure), where calculations are based on Consolidated results: Cost-to-income ratio = ((Sales expenses) + (Administrative expenses) + (Other expenses (excluding Loss from cession of non-performing loans)) ) / ((Net sales) – (Cost of sales) + (Interest income and similar income) + (Other operating income) – (Interest expenses and similar expenses)), Cost of interest-bearing liabilities = weighted average nominal interest rate calculated by amount of interest bearing liabilities as at period end, Return on Equity (ROE) = (Net profit for the period) / ( ((Equity as at start of the year) + (Equity as at year end)) / 2), Equity ratio = (Equity)/(Total assets), EBITDA, Earnings before interest, taxes, depreciation and amortization = (Profit before tax) + (Interest expenses and similar expenses) + (Rights of used assets depreciation) + (Depreciation of fixed assets) + (Amortization), Dividend payout ratio = (Dividends paid during the period)/(Net Profit for the period).

**EBITDA source: Indicator for the year 2020 according to Management report of audited AS DelfinGroup Consolidated Annual account for the year ended 31 December 2020.

Important: The information provided herein is not investment advice nor a proposal. This is only general information about the intention and plans of AS DelfinGroup in connection with the possible IPO process. All investment decisions must be based on a prospectus approved by the Financial and Capital Market Commission and professional assessment or advice.


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