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Investing.com -- Intrum AB stock fell 4.8% despite reporting second quarter earnings that beat analyst expectations, as revenue trends remained weaker than forecast despite the completion of its debt restructuring process.
The Swedish debt collection company reported adjusted EBIT of SEK 1.39 billion for the second quarter, which was 17% ahead of consensus forecasts. However, total revenues came in at SEK 4.21 billion, 3.6% below expectations. The earnings beat was primarily driven by stronger joint venture results and lower expenses, which were 5.1% below UBS estimates.
The company’s leverage ratio increased to 4.8x from the previous quarter, affected by lower 12-month cash EBITDA due to exited portfolios and foreign exchange effects. Despite these challenges, Intrum delivered its strongest results in over a year, with a bottom-line performance approximately 10% above consensus.
Intrum announced the completion of its debt restructuring yesterday, which included a 10% write-down of existing debt, a 10% equity dilution, and additional credit facilities to support bond buybacks. The restructuring, which took over a year to complete, was effective as of July and is not yet reflected in the second quarter financial statements.
UBS: "While Q2 results beat expectations, it was once again driven by weaker than forecast revenue trends, more than offset by lower expenses."
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