- Net interest income surpasses previous year’s level by 14.7%
- Consolidated Group net profit in the first nine months increases by 27.1%
- Company reconfirms forecast raised at time of half-year results of Consolidated Group net profit in the range of EUR 98 – 102 million
Baden-Baden, October 28, 2016: The positive earnings performance in the first halfyear of 2016 continued for the full nine-month period. The robust, high-margin new business of earlier periods and a persistently low interest rate environment led to a 14.7% rise in net interest income for a total of EUR 161.1 million (9M-2015: EUR 140.4 million).
Expenses for the settlement of claims and risk provision continued their decline falling 6.0% reaching EUR 41.2 million in the first nine months compared to their level of EUR 43.8 million in the same period of the previous year. This decline supported a sharp rise of 24.0% in net interest income after settlement of claims and risk provision to EUR 119.9 million compared to EUR 96.6 million in the previous year.
The profit from service business (item’s name was changed in first half of 2016 from "profit from insurance business") increased 16.7% to EUR 43.0 million (9M-2015: EUR 36.9 million). Profit from new business was 17.4% higher at EUR 43.8 million after EUR 37.3 million in the first nine months of 2015. Including gains/losses from disposals, which tend to be volatile on a quarterly basis, income from operating business increased 19.9% year-on-year to EUR 204.7 million compared to EUR 170.7 million.
The Consolidated Group’s expenses had a comparatively lower increase in the ninemonth period. Based on the higher number of employees versus the prior year, staff costs grew 12.4% to EUR 52.1 million (9M-2015: EUR 46.3 million). A similarly moderate rise was recorded in the Consolidated Group’s second largest expense item – selling and administrative expenses – where higher administrative costs moved this item 13.9% higher to EUR 43.8 million (9M-2015: EUR 38.5 million). The operating result increased 28.0% to EUR 103.3 million compared to a level of EUR 80.7 million in the same period of the previous year, which supported the rise of 27.1% in the Consolidated Group’s net profit to EUR 75.9 million (9M-2015: EUR 59.7 million).
Based on the above results, we reconfirm our forecast for the current fiscal year, which we raised with the announcement of our half-year 2016 results, and continue to expect net profit in the range of EUR 98 – 102 million.
The Consolidated Group continued to maintain its solid balance sheet structure as per the September 30, 2016 reporting date. At 17.1%, the equity ratio was slightly higher than its level of 17.0% at the end of the 2015 fiscal year and was also above our long-term target of a minimum of 16%.
This gratifying performance was generated by an average of 1,011 employees (9M-2015: 918 employees on average; full-time equivalents, excluding the members of the Board of Directors and trainees).
In commenting on the nine-month results, Wolfgang Grenke, Chairman of the Board of Directors of GRENKE AG said: "We are very pleased overall with our performance in the first nine months in which we maintained the level of success achieved during the first half-year. We reconfirm our forecast range for net profit of EUR 98 – 102 million, which we raised with the release of the 2016 half-year results. The aforementioned positive developments give us tremendous confidence that we will end the fourth quarter and the fiscal year as a whole at a very gratifying level. With respect to our future growth, we will continue to work consistently on expanding our international presence and further diversifying our product range. Our broad range of refinancing instruments and our solid balance sheet featuring an equity ratio of 17.1% leave us optimally positioned to reach our future targets".
Changes to the Board of Directors
As per December 31, 2016, Mr. Jörg Eicker will leave the Board of Directors of GRENKE AG on amicable terms to pursue new challenges. "The Supervisory Board and the Board of Directors would like to thank Mr. Eicker for his valuable contribution these past years to GRENKE AG’s positive and successful business performance and market position and, above all, for his contribution to the development and execution of important projects for refinancing the GRENKE Group", stated the Chairman of the Supervisory Board of GRENKE AG, Prof. Dr. Ernst–Moritz Lipp.
The Supervisory Board intends to appoint Mr. Sebastian Hirsch to the GRENKE AG Board of Directors at its meeting in late November. Mr. Hirsch will assume responsibility for the areas Refinancing and Treasury. Mr. Wolfgang Grenke (Chairman of the Board of Directors) will be responsible for the area Investor Relations, and Mr. Sven Noppes, General Representative, will take over responsibility for Risk Management and Reporting.