- Net interest income in the first half of 2016 climbs 16.0% to EUR 106.0 million (previous year: EUR 91.4 million).
- Consolidated Group net profit in the first half of 2016 grows 28.8% from EUR 38.5 million in the previous year to EUR 49.6 million.
- Upward revision in the 2016 net profit forecast: Consolidated Group net profit now expected in the range of EUR 98 – 102 million (previous forecast: EUR 93 – 98 million)
Baden-Baden, July 28, 2016, GRENKE AG (ISIN DE000A161N30): The positive earnings development in the first half of 2016 is a direct result of the absolute decline in our expenses for the settlement of claims and risk provision and an improved cost/income ratio. Net interest income increased 16.0% to EUR 106.0 million (1.HY 2015: EUR 91.4 million) as a result of the new business growth generated in prior years.
The expenses for settlement of claims and risk provision in the first half of 2016 declined 1.9% bringing the total to EUR 28.3 million (1.HY 2015: EUR 28.9 million). Net interest income after settlement of claims and risk provision increased by 24.2% from EUR 62.6 million in the previous year’s comparable period to EUR 77.7 million.
The profit from service business (item’s title changed from previous title "profit from insurance business" for reasons of clarity) increased by 17.0% to EUR 27.6 million (1.HY 2015: EUR 23.6 million). Profit from new business was 20.0% higher at EUR 29.8 million compared to EUR 24.8 million in the first-half of 2015. Including gains/losses from disposals, which tend to be volatile on a quarterly basis, income from operating business increased 21.1% from EUR 110.9 million in the previous year’s comparable period to EUR 134.3 million.
Expenses in the first half-year rose at a slower rate overall than the expansion in new business. The moderately higher number of staff raised staff costs by 13.1% to EUR 34.4 million in the first half of 2016 compared to EUR 30.4 million in the previous year’s period. Selling and administrative expenses were 19.0% higher at EUR 28.8 million compared to EUR 24.2 million in the first-half of 2015.
The operating result increased by 26.7% to EUR 66.6 million after EUR 52.5 million in the first-half of 2015. The Consolidated Group’s net profit in the first half of 2016 climbed 28.8% to EUR 49.6 million (previous year: EUR 38.5 million).
We are raising our net profit forecast for the current 2016 fiscal year and expect net profit in the range of EUR 98 – 102 million (previous forecast: EUR 93 – 98 million). This forecast would represent growth of 21 – 26 % compared to the net profit of EUR 80.8 million reported for the year 2015.
At 16.7%, the Consolidated Group’s equity ratio remained at the previous year’s level (31. December) and above our long-term target of a minimum of 16%.
This performance was generated by 991 employees compared to 909 employees in the first half of 2015 (full-time equivalents, excluding the members of the Board of Directors and trainees).
"After expanding net profit in the first six months by a gratifying 28.8 percent, the GRENKE Consolidated Group is well on its way to exceeding the previous net profit forecast of EUR 93 – 98 million for the year. We are therefore raising our forecast for the current fiscal year and now expect net profit in the range of EUR 98 – 102 million. After the significant rise in net profit in the previous year of 24 percent, we expect net profit in the 2016 fiscal year to rise a further 21 – 26 percent. Going forward, we will continue to follow our proven and successful business strategy. For the second half of 2016, we plan to complete additional cell divisions in established markets and intend to enter the Polish market with our factoring products", commented Wolfgang Grenke, Chairman of the Board of Directors of GRENKE AG, on the results.
"Regional growth and the diversification of our product range are integral components of our growth strategy. GRENKE Bank plays an important role in this regard because it offers attractive products such as business start-up financing, among others. The volume of EUR 10.4 million achieved in the first half of 2016 represents an increase of 39 percent. These activities position us as a solid financing partner for small- and medium-sized companies. Deposits at GRENKE Bank also saw a sharp rise of 23 percent in the first half of 2016", said Jörg Eicker, Chief Financial Officer (CFO) of GRENKE AG.