(Reuters) -Europe’s largest debt collector Intrum reported third-quarter earnings below expectations on Wednesday, amid its drive to restructure its own finances.
Adjusted operating profit fell 5% to 951 million Swedish crowns ($90.21 million) for the quarter ended Sept. 30, from 1.00 billion crowns a year earlier. That missed analysts’ expectations of 1.04 billion crowns, a company-provided poll showed.
Intrum shares have taken a 40% hit since the start of this year, as investor concerns mounted over the manager of bad loans’ own debt pile, which stood at some 49 billion crowns at September end.
Profit margin in its servicing segment, a key business area as Intrum aims to improve its profitability from collecting debt owed to others, grew to 18% in the reported quarter, compared with 12% last year. This was above the 16% margin analysts had expected.
Intrum targets to reach an annual servicing margin of 25% by 2026.
“We are starting to see the effect of our recent efficiency efforts with absolute costs coming down compared to last year,” said CEO Andres Rubio in a statement, but added that further efforts could be needed.
($1 = 10.5419 Swedish crowns)
(Reporting by Greta Rosen Fondahn; Editing by Jacqueline Wong and Rashmi Aich)
