Aktiv Kapital Earnings Down in Second Quarter on Currency

Norwegian debt buyer and collector Aktiv Kapital said last week that profits and revenues were down in the second quarter of 2008, primarily due to the strengthening of its home currency. The company also reported a large jump in debt purchasing activity.

Oslo-based Aktiv reported second quarter before-tax profits of $22.2 million, a decline of 25 percent from pretax profits reported in the same period last year. Revenues also slid 2 percent to $72.8 million.

Total cash collections on purchased portfolios amounted to $90.85 million in the quarter, a 2.8 percent decrease from Q2 2007. Aktiv’s contingency collections unit supplied $13 million in revenue in the second quarter, up 10 percent from the same time in 2007.

Aktiv blamed the strengthening of the Norwegian Kroner against other currencies where the company has operations as the main culprit for the declines in revenues and profits. The company singled out the advance of the Kroner against the British Pound. Aktiv reports its financial results in Kroners.

But the company also acknowledged that it was having some trouble among its purchased debt portfolios. Two portfolios acquired in late 2007 did not perform as expected in the second quarter. Aktiv blamed low debtor contact levels for the poor performance.

Aktiv said that in the second quarter it invested $61.2 million on portfolios with a face value of $823.8 million, roughly double what it spent in the second quarter of 2007. The vast majority of the face value of accounts purchased in the quarter was located in Canada, the United Kingdom, and Germany.