Grenke AG, a global provider of leasing for SMEs, has raised its profit forecast for 2021.
The board of directors now expects a consolidated group net profit after taxes of between €60m and €80m, compared to the previous forecast of €50m to €70m published with the publication of the 2020 Annual Report.
According to preliminary figures, Consolidated Group net profit reached €32m in the first six months (1H 2020: €33.2m). Based on the preliminary half-year figures for 2021, the need for risk provisioning decreased.
Due to the high level of uncertainty resulting from the pandemic, the board of directors had previously projected a higher level of risk provisioning. The main reason for the change in the assessment is the continued stable payment behaviour of customers. The board of directors of Grenke AG expects this to continue in the second half of 2021.
The target range for net profit in the current fiscal year was raised as a result.
“Even though a high level of pandemic-related uncertainty remains, we are starting to see a normalisation in our operating business. This gives us strong confidence in the performance in the second half of the year. Our risk provisioning at the beginning of the year was appropriately cautious in view of the circumstances. The positive trend now allows us to raise our net profit outlook for the second half-year, despite our continued conservative risk provisioning,” said Grenke chief financial officer, Dr Sebastian Hirsch.
According to preliminary figures, the profit and loss item settlement of claims and risk provisioning decreased to €84m in the first half of 2021 (1H 2020: €123.1m). In the previous year, this item had increased significantly as a result of expected payment defaults at the beginning of the Covid-19 pandemic.
Primarily due to the continuing negative impact of the pandemic, the board of directors still expects new leasing business in the range of €1.7bn and €2bn, following a level of €2bn in 2020. The board of directors also continues to expect to achieve an equity ratio of more than 16 per cent.