Amsterdam April 19, 2007 - Atradius N.V., a global leader in credit
insurance and collections, today reported a 27.9% increase in net
profit from continuing operations to EUR 105.3 million in 2006 from
EUR 82.3 million in 2005. Including discontinued operations, net
profit in 2006 was 5% higher than in 2005. The improvement was driven
by a 1.7% increase in gross earned premium to EUR 1,076.5 million
from EUR 1,058.8 million in 2005 and a 7.8% decline in net operating
expenses to EUR 315.0 million in 2006 from EUR 341.6 million in 2005.
Financial Highlights
* Net profit from continuing operations grew 27.9% to EUR 105.3
million (2005: EUR 82.3 million)
* Net profit increased 5.0% to EUR 105.3 million (2005: EUR 100.3
million)
* Net investment result expanded 20.9% to 55.5 million (2005: EUR
45.9 million)
* Total income after reinsurance rose 2.6% to EUR 749.3 million
(2005: EUR 730.2 million)
* Net expense ratio improved to 41.0% from 47.4% in 2005
* Net claims ratio of 45.8% compared to 43.9% in 2005
* Net combined ratio improved to 86.8% from 91.3% in 2005
* Return on average shareholders equity was 16.3% in 2006 compared
to 18.1% in 2005 (2005: 15.1% excluding the net profit from
discontinued operations)
Insurance Segment
Gross earned premiums increased 1.7% compared to 2005. Income from
credit checking fees increased 2.4%. Traditional credit insurance
revenues grew 3.4%, which was mainly driven by growth markets in
Eastern Europe, the USA, and Australia. In addition the structured
credit and political risk solutions of Special Products provided a
EUR 19 million boost to insurance revenue. The continued success in
new market development and expansion were partly offset by
competitive pressure on pricing in mature markets.
Bonding revenues were EUR 10 million lower than last year, which
reflects the portfolio optimisation efforts in order to return to
profitability.
The reinsurance business whereby Atradius offers reinsurance
solutions to third parties, reported less earned premium than last
year. This is solely due to a change in the accounting estimate for
revenue recognition, resulting in a shift in earned revenue of close
to EUR 25 million to future years. Without this change in accounting
assumptions, the insurance revenues would have shown growth of 3.9%
compared to 2005.
Peter Ingenlath, Acting CEO of Atradius commented, "Our focus on
developing new innovative credit insurance products that more
effectively meet the needs of our customers along with improved
customer service is helping drive our growth. Along with this we
continue to make great strides in improving the performance of our
Bonding unit through our focus on maintaining and building profitable
revenues in Italy, France and Nordic."
Service Segment
Service income increased 12.5% to EUR 55.0 million from EUR 48.9
million in 2005. The increase was driven by a 21.0% increase in
Collections revenue.
Peter Ingenlath mentioned, "Collections and Information services
continue to grow in importance and value. We are one of only a few
companies that can offer an extensive international collections
service. This is helping drive growth in revenues and spurring our
continued expansion. In 2006 we opened new Collections offices in
Poland and Australia and we anticipate adding new offices in Hungary,
Mexico, Ireland and Hong Kong in 2007.
Markets
Revenue grew in all Atradius markets except for Germany and Belgium.
In Germany, portfolio growth was offset by the positive claims
environment which resulted in additional premium refunds. In Belgium
premiums were down as a result of cancellations and slower new
business development.
The Company's Nordic and UK markets grew by 8.6% and 4.2%
respectively over last year as strong product offerings resulted in
solid new business development and customer retention. Revenues in
Italy grew 3.6%, but most other Southern European markets averaged
only marginal growth for the year. Eastern European markets grew, on
average, more than 80% over last year while Australia (18%) and NAFTA
(16%) also maintained strong growth in revenues as Atradius expanded
coverage and further built brand and product recognition in these
markets. The Global business unit, which provides service to
multinational companies with credit insurance needs in different
countries, grew 24% in 2006 benefiting from office expansions in new
and emerging markets.
Geographic Expansion
In 2006, Atradius opened new offices in Hong Kong and China, entered
into operating partnerships with China Continent Insurance Company,
expanded its joint venture with Tokio Marine and Nichido Fire
Insurance Company in Japan, developed a foothold in Brazil and early
in 2007 opened an office in Singapore. In addition, the shareholders
of Atradius have agreed on the terms of the combination of Atradius
and Crédito y Caución. This combination is expected to be completed
before year end pending various regulatory and anti-trust approvals.
Peter Ingenlath added; "Expansion into new and less developed credit
insurance markets offers attractive growths opportunities through
business with the local subsidiaries of customers from the core
markets but also with local companies."
Outlook
Peter Ingenlath concluded; "We are seeing indications of a tightening
business environment in a number of our markets. As a result we
anticipate a gradual deterioration of the credit environment over the
course of the year which based on the current pricing developments
may tighten margins.
As was the case in 2006, our primary goal in 2007 will be to maintain
a sound risk portfolio while increasing turnover. We see continued
opportunities to achieve this by building revenues in our core
markets as well as our smaller and emerging markets by leveraging our
recent geographic expansion and continuing to introduce relevant
product upgrades. We will also support our growth through continued
expansion of credit insurance and collections services in new markets
like Turkey, Brazil, Russia, India and China, continued growth in the
US and Canada and through our proposed business combination with
Crédito y Caución. We are looking forward to completion of the
combination by year end. This will substantially expand our coverage
of Spain and Portugal and improve our ability to pursue business
opportunities throughout South America."
About Atradius:
Atradius is a leading credit insurer with total revenues of around
EUR 1.3 billion and a 24% share of the world credit insurance market.
It insures approximately EUR 400 billion of world trade annually
against non-payment and provides a comprehensive range of risk
transfer, financing and trade receivables management services. With
3,500 staff and more than 90 offices in 40 countries, Atradius has
access to credit information on 45 million companies world-wide and
makes more than 12,000 credit limit decisions daily. It is "A" rated
by Standard & Poor's (outlook stable) and A2 by Moody's (outlook
stable).
Further information:
Atradius Corporate Communications
Andrea Riedle
Tel.: +49 221 2044 1433
E-Mail: andrea.riedle@atradius.com
www.atradius.de
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