DOVXF - Intrum: Balance Sheet Risks Baked In But Challenges Remain
2024-02-20 22:35:42 ET
Summary
- Cerberus's book sale is earnings negative, but refinancing is favorable.
- Intrum business model relied on access to cheap funding.
- We believe that Intrum's share price already discounts the balance sheet risks. That said, we prefer to remain neutral.
Intrum AB (ITJTY) (INJJF), formerly known as Intrum Justitia AB, is a Swedish Credit Management Services company that engages its activities mainly in Europe, focusing on the United Kingdom, Portugal, Italy, and Denmark, among others. The company covers a range of solutions in the entire credit management chain. It offers payment and credit services and provides credit information and advisory services. In addition, it specializes in debt collection and surveillance. Intrum's shares declined by approximately 72% in one year, reflecting significant risks for the shareholders, given a very high debt burden. In January, the Italian doValue burned over a fifth of its capitalization in a single session after the announcement of unexpected devaluations in Spain. Even the English servicer Lowell, controlled by the private equity fund Permira, is short of breath due to a debt of around €1.3 billion. Here at the Lab, we have good coverage of the EU Financials sector. Intrum has a strategic partnership with Intesa Sanpaolo ( latest Q4 update ), a well-known company within our team....
Intrum: Balance Sheet Risks Baked In, But Challenges Remain