Intrum Sees Higher Revenues but Lower Earnings and Purchases in 2008

European accounts receivable management company Intrum Justitia said Tuesday that earnings and debt portfolio purchases were down for the full year and fourth quarter of 2008 as the firm’s collections were impacted by the global economic downturn.

Stockholm, Sweden-based Intrum reported consolidated revenues of $440.3 million for the full year 2008, a 14 percent increase over 2007. In the fourth quarter, the debt buyer and collector reported revenues of $122 million, up 14.9 percent from the year ago period.

But net earnings were down in both periods. For the full year 2008, Intrum reported net earnings of $52.9 million, down 4.4 percent from 2007. In the final quarter of the year, Intrum said its net earnings were $11.5 million, a 38 percent slide from the fourth quarter of 2007.

Intrum said that it took a $7.3 million impairment against its operations in Scotland. Without the impairment, operating earnings actually increased 1.4 percent in the fourth quarter.

Investments in purchased debt in 2008 fell 12.5 percent to $104.6 million. But Intrum noted that the total does not include a $40 million payment made in 2008 on a massive debt portfolio it bought in late 2007 (“Two European ARM Giants Announce Big Portfolio Buys,” Dec. 18. 2007).

“We are pleased with our stable purchased debt operations, which, despite current macroeconomic conditions, generated a return of 19.6 percent in the fourth quarter,” said Intrum CEO Lars Wollung. “We remain cautious in our investment decisions, but see greater opportunities in the years ahead.”

At the end of 2008, Intrum had 16.6 million collection cases in process, up from 15.5 million at the end of 2007.

Regionally, Intrum’s revenues were flat in its home Sweden, Norway & Denmark region while revenues were up in the following regions: Netherlands, Belgium & Germany; Switzerland, Austria & Italy; France, Spain & Portugal; and Finland, Estonia, Latvia & Lithuania. Revenues were down in the United Kingdom & Ireland and Poland, Czech Republic, Slovakia & Hungary regions.