Most of the important line items were preannounced in the market update on 17 January. Gross revenue was EUR 86m, 2% shy of ABGSCe, and cash EBITDA was EUR 55m, 7% below. Reported P&L items were significantly affected by the EUR 37m negative revaluation of the NPL portfolios, which relate to portfolios acquired during the start-up phase of the company. In addition, the company made an EUR 6m impairment of the REO book. In sum, this led to net revenues of ~EUR 22m vs. ABGSCe of EUR 60m. Adjusted for the NPL revaluation, revenue would be 2% shy.
We account for updated ERC and new REO reporting
Our main estimate revisions on the back of the Q4 report stem from the updated ERC profile, which is less front-end loaded than previously. In addition, Axactor will now report REOs as part of discontinued operations. This means that REO sales, direct opex related to REOs and cost of sales incl. amortisations will no longer be reflected above the net profit line in the P&L. Given the high amortisation and low profitability of REOs, this will have a positive effect on reported margins. The REO business is now at the very end of its tail and we forecast that REOs will be almost gone by YE’22. Moreover, REOs will no longer be included in gross revenue, but the cash contribution will be included in cash EBITDA. Lastly, we lower capex estimates for 2022 by 24% to EUR 220m, which is in the middle of the EUR 200-250m guidance for 2022.
We estimate a fair value range of NOK 6-22/share
On the back of the Q4 report, we lower our cash EBITDA estimates by 14% for 2022 and 12% for 2023. Following the estimate revisions, we now estimate a fair value range of NOK 6-22/share based on DCF. With a larger revision to the collection curve (relating to older vintages) and with REOs now classified as discontinued operations
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