Fellow Finance - Somewhat weaker than expected
Fellow Finance’s H1/2020 results were somewhat weaker than expected, with revenue of EUR 5.8m (Evli EUR 6.3m) and an adj. EBIT of EUR -0.1m (Evli EUR 0.3m). The adj. EPS was below our estimates at EUR -0.10 (Evli EUR -0.05). Coronavirus uncertainty and temporary regulations affected facilitated loan volumes, down 36.8% in H1/20 compared with H1/19.
- Revenue in H1 amounted to EUR 5.8m (EUR 7.2m in H1/19), below our estimates (Evli EUR 6.3m). Revenue declined 19.8% in H1. Compared with H1/19 commission fees declined by 38% and interest yields increased by 31%.
- Fellow Finance facilitated loans during H1 for a total of EUR 69m (EUR 109.3m in H1/19), a decrease of 36.8%. Loan volumes were affected by uncertainty caused by the coronavirus pandemic, which interrupted new investments, along with temporary regulations in Finland and Poland, which limited loan intermediation possibilities.
- The adj. EBIT in H1 amounted to EUR -0.1m (EUR 1.4m in H1/19), below our estimates (Evli EUR 0.3m) driven by the lower than expected revenue.
- The adj. EPS in H1 amounted to EUR -0.10 per share (EUR 0.07 in H1/19), below our estimate of EUR -0.05.
- Guidance: Fellow Finance withdrew its guidance in March and did not reinstate a guidance in conjunction with the H1 report.
- Repayment levels of business and consumer loans did not face any significant deterioration despite the challenging environment.
- Business financing volumes grew 15% compared to H1/19 despite the environment and tightened credit approval criteria.