MNI China Daily Summary: Wednesday, July 10

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CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS WEDS

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Intrum Bonds Up To 1pt Cheaper On Q1; CEO Implies Ongoing Talks With Cerberus

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  • Intrum Q1 revenue was in line with BBG consensus at +8% YoY driven by M&A activity in servicing while adj-EBIT was ~3% behind at +8% YoY (consensus based on just 6 estimates)
  • Leverage flat at 4.4x against the MT target of 3.5x. Cash EBITDA rose 2% YoY, flat on a LTM basis while Cash & CE of EUR 4.75bn was slightly up vs. EUR 4bn at FY23.
  • Targets unchanged. Expects difficult debt collecting environment to persist for some time. See rolling 12m adj-EBIT margin in high teens around year-end (was 16% in FY23 and 10% in Q1). Cost savings of SEK 400mn and SEK 300mn in 2024 and 2025 have been identified in addition to the SEK 800mn implemented in 2023. Re-iterated that they have enough liquidity for >90% of 2024/2025 maturities.
  • BBG CEO interview headlines imply ongoing discussions with Cerberus on future cooperation while discussions on capital structure are ongoing with debtholders.
  • EUR 25s are 11c higher though their 26s, 27s, 28s are 50-100c cheaper. Headlines imply equity over 10% lower – noting that bottom line loss of EUR 238mn came against BBG consensus of a EUR 80mn loss.
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  • Intrum Q1 revenue was in line with BBG consensus at +8% YoY driven by M&A activity in servicing while adj-EBIT was ~3% behind at +8% YoY (consensus based on just 6 estimates)
  • Leverage flat at 4.4x against the MT target of 3.5x. Cash EBITDA rose 2% YoY, flat on a LTM basis while Cash & CE of EUR 4.75bn was slightly up vs. EUR 4bn at FY23.
  • Targets unchanged. Expects difficult debt collecting environment to persist for some time. See rolling 12m adj-EBIT margin in high teens around year-end (was 16% in FY23 and 10% in Q1). Cost savings of SEK 400mn and SEK 300mn in 2024 and 2025 have been identified in addition to the SEK 800mn implemented in 2023. Re-iterated that they have enough liquidity for >90% of 2024/2025 maturities.
  • BBG CEO interview headlines imply ongoing discussions with Cerberus on future cooperation while discussions on capital structure are ongoing with debtholders.
  • EUR 25s are 11c higher though their 26s, 27s, 28s are 50-100c cheaper. Headlines imply equity over 10% lower – noting that bottom line loss of EUR 238mn came against BBG consensus of a EUR 80mn loss.