Fellow Finance - Earnings flash - Revenue growth not there yet
Fellow Finance’s H1/21 results fell short from our estimates on the growth side, with revenue of EUR 5.5m (Evli EUR 6.2m), driven by the loan mix due to growth in lower margin business financing. EBIT amounted to EUR 0.5m (Evli EUR 0.5m). The guidance for 2021 remains intact, expecting growth in 2021 but for the result to remain slightly unprofitable due to growth investments.
- Revenue in H1 amounted to EUR 5.5m (EUR 5.8m in H1/20), below our estimates (Evli EUR 6.2m). Revenue declined 5.3% y/y in H1. The 31% growth in loan volumes as expected did not translate into similar revenue growth due to the loan mix but the impact was larger than we had expected. Compared with H1/20 commission fees declined by 8% and interest yields declined by 2%.
- Fellow Finance facilitated loans during H1 for a total of EUR 91m (EUR 69.1m in H1/20), growing 31%. Loan volumes rebounded well from the weak comparison period levels. Growth was strong in business financing, but growth was also seen in Finnish consumer financing. International operations are still seeing challenges, with focus on relaunching the Polish and German operations and running down operations in Sweden and the Czech Republic, in line with Fellow Finance’s strategy.
- The EBIT in H1 amounted to EUR 0.5m (EUR -0.1m in H1/20), in line with our estimates (Evli EUR 0.5m).
- The EPS in H1 amounted to EUR -0.01 per share (EUR -0.1 in H1/20), in line with our estimate of EUR -0.01.
- Guidance for 2021 (reiterated): Fellow Finance expects revenue growth compared to 2020 but for the result to remain slightly unprofitable due to investments in new products and growth.