Grenke AG, a German-based provider of leasing for small and medium-sized enterprises, reported a net profit of €20.5m in the first quarter of 2022 (Q1 2021: €14.0m), which is up 46.8% compared to the first quarter of 2021.
“With these results, we are fully back on our growth trajectory and on track to achieve our full-year guidance for 2022, with a net profit forecast of €75 to 85m,” said Michael Bücker, Chair of the Board of Directors of Grenke AG.
Chief Financial Officer, Dr Sebastian Hirsch, added: “All indicators show that we have put the low point behind us and can expand our new business as planned.”
The stable payment behaviour of customers had a positive effect in the first quarter of 2022, which enabled us to reduce our expenses for settlement of claims and risk provision by 29.2%, from €44.6m in the same prior-year quarter to €31.6m in the reporting quarter. The resulting loss rate in the first quarter of 2022 was 1.4% (Q1 2021: 2.0%), and at the lower end of our guidance range of 1.4% to 1.7%.
Grenke Group’s total assets amounted to €6.5bn as of the March 31, 2022 reporting date (December 31, 2021: €6.7bn), mainly as a result of a targeted reduction in liquidity. The largest balance sheet item – non-current and current lease receivables – was unchanged as of the reporting date, amounting to €5.1bn (December 31, 2021: €5.1bn). Liquidity in the form of cash and cash equivalents amounted to €0.7bn as of March 31, 2022 (December 31, 2021: €0.9bn; March 31, 2021: €1.1bn). The equity ratio was 19.7% and continued to exceed our self-set target of a minimum of 16%.
For the 2022 financial year, the Board of Directors continues to expect new leasing business of between €2bn and €2.2bn, compared to €1.7bn in the previous year.
In the medium term, the Board of Directors expects new leasing business to double by 2024, compared to new leasing business of €1.7bn in 2021. The lower level of new business over the past two years is expected to reduce operating income for the full-year 2022.
Based on the high profitability of the existing portfolio of contracts, the Grenke Board of Directors anticipates net profit in the range of €75m to €85m. In the financial year 2024, the Board of Directors expects net profit to double compared to the 2021 level of €72.2m (excluding the income from the sale of the viafintech investment).