- Focus on strategic expansion of the business model
- Business volume and consolidated earnings down from prior year
- Contractual negotiations with renowned investor for first Trade Finance fund complete
DF Deutsche Forfait AG (Prime Standard, ISIN: DE0005488795) took extensive measures to expand its business portfolio in the first nine months of 2013. By increasing the activities in its Asset Management segment, it has extended the placement radius for foreign trade receivables. At the same time, the DF Group obtained additional financing by issuing a corporate bond (Entry Standard, ISIN: DE000A1R1CC4) and securing further lines of credit.
Contrary to initial expectations, the financial figures from the first nine months do not yet reflect the company’s additional flexibility. This was due to a temporary slowdown in the demand for financing solutions in July and August, as well as delays in placing the first Trade Finance fund. Consolidated profit in the first nine months was EUR 1.3 million, well below the prior year’s earnings of EUR 2.1 million. Earnings per share were thus EUR 0.19 (prior year: EUR 0.31). Business volume was EUR 438 million, down from EUR 519 million in the first nine months of the prior year. Gross profit including finance results, the most important factor for the success of the forfaiting business, was 6% below the prior year at EUR 9.4 million. This is a margin of 2.1% for the first nine months. The fact that this margin remains high underscores the appeal of the business model. Due to investments in the new Asset Management segment and costs for entering the African market, administrative costs grew 12% year-on-year to EUR 7.6 million.
Expansion to placement opportunities: Key points for the first Trade Finance fund and an ABS program agreed
In early November, Deutsche Kapital Ltd. (DKL), Dubai, a wholly-owned subsidiary of the DF Group, concluded negotiations with a renowned bank that intends to invest client assets under its management in our Trade Finance fund. The first closing has not taken place, contrary to initial plans. We expect this to be completed until year-end. The bank has made the strategic decision to invest part of the client assets under management in the fixed income segment in the “trade receivables” asset class. DKL will manage a separate portfolio for the clients of this bank.
At the end of November, the DF-Group agreed with a renowned partner on the framework conditions for an ABS program worth an initial EUR 50 million. The documentation should be completed in the next few weeks, and we expect an initial draw-down in Q1 2014.
Frank Hock, CFO of DF Deutsche Forfait AG, stated: “We are pleased that the contractual negotiations with the bank to assess a transaction in our new Trade Finance fund have been successfully completed. Now we must promote the investment along with our new partner and gradually obtain further investors for the new ‘trade receivables’ asset class. The framework conditions are highly promising thanks to the prevailing low interest rates. The ABS program will expand our placement opportunities starting in 2014 and give us access to additional investor groups.”
In light of the above conditions, the 2013 earnings will depend on whether the first closing occurs before year-end. They also depend on the extent to which we can post earnings from the Trade Finance fund and private placements of export receivables during the fourth quarter.
The full report on the first nine months of 2013 is available on the company’s website under “Investor Relations.”