Published: 2021-05-14 15:07:46 CEST
mogo
Interim report (Q1 and Q3)

Mogo Finance reports unaudited results for the three months ended 31 March 2021

From strong product performance and high-quality portfolio to consistent profits

OPERATIONAL AND STRATEGIC HIGHLIGHTS

  • Sustained performance across all active markets with reduced Covid-19 impact.
  • Improvement of portfolio quality driven by effective debt collection processes and underwriting policies in the past twelve months.
  • Solid growth of most recently launched vehicle financing product groups. The Premium car financing solution Primero[1] in Latvia has reached a net loan portfolio of EUR 15 million with EUR 1.9  million issued in 2021 Q1. More than 10,000 motorcycle taxis financed in Kenya.
  • Continuous steady vehicle sales income—more than EUR 3 million for a third consecutive quarter.
  • Successful divestment of the Kazakhstan operations on hold since the beginning of the pandemic.
  • Steady issuance balance in Q1 (Q-o-Q) despite the Covid-19 restrictions in the Baltics, shortage of motorcycle supply in Kenya, and persistent movement and operational limitations which affect vehicle sales activities in several markets.
  • An adaptable single WEB/CRM platform designed to enable release of new targeted products within one day. Several targeted projects to help vulnerable society groups across different markets projected to be launched in Q2.
  • An introduction of the non-financial reporting practice based on the ESG framework, disclosing information and data on the environmental, social, and corporate governance aspects. First ESG Report to be launched in 2021.

 

FINANCIAL HIGHLIGHTS AND PROGRESS

  • Revenue up 41.4% to EUR 32.8 million (3M 2020: EUR 23.2 million) and normalized revenue reaches EUR 33.6 million in line with high quality portfolio development both in legacy vehicle business as well as consumer business lines.  
  • EBITDA up 54.5% to EUR 13.6 million (3M 2020: EUR 8.8 million) and normalized EBITDA reaches EUR 14.5 million driven by a continuous focus on most profitable markets and more optimal organizational structure.
  • Net profit before FX increased to EUR 3.4 million (3M 2020: EUR 1.2 million) supported by revenue growth as well as control over portfolio quality.
  • Increase in total equity by 27.0% to EUR 43.8 million (31 December 2020: EUR 34.5 million) attributable to successful business results as well as shareholders equity contribution during Q1 2021.
  • Successful Latvian bonds refinance with more than 600 new bondholders onboarded and positive outcome of Eurobond bondholders meeting held during first quarter with all proposals uniformly adopted.

 

 

Modestas Sudnius, CEO of Mogo Finance, commented: The Group continued to demonstrate strong performance for the third consecutive quarter after the initial Covid-19 shock. In the first quarter of 2021, our revenues continued to improve, reaching EUR 32.8 million. Revenue growth was achieved through smart capital allocation by shifting capital from the markets put on hold to operational markets, and by steadily improving portfolio quality.

The consistent and steadily improving performance across the 11 vehicle finance markets in tandem with the consumer financing business were the key drivers for strong financial results. Even though movement restrictions imposed on some markets had an impact on car sales, the demand for vehicle financing did not decrease, only the vehicle purchase cycle became longer. Now, with all the major markets seeing vaccination programs being rolled out and markets opening, we see an opportunity to accelerate issuances and continue strengthening our market position.

During the first quarter of 2021, we managed to achieve significant operational and corporate milestones. I am pleased that, despite the challenging economic climate, we managed continue successfully developing Premium car financing solution together with a local bank in Latvia and motorcycle taxi financing in Kenya. Further development of these solutions is part of our future strategy. Also, we will continue to digitize our processes across the Group, with a focus on improving  automated debt collection engine and optimizing our web platform.

The Group looks to the future with confidence. Our recent performance in tandem with a dedicated team and the necessary technology in place makes me very confident that we will succeed in creating value to all our stakeholders. We also anticipate the future with a revised corporate strategy and rebranding from Mogo Finance to Eleving Group. We will keep offering products with the “Mogo” brand across our countries, yet, with the new corporate identity, the Group makes the transition from product and service orientation to impact making. The ultimate goal of our business is to empower diverse communities around the world by providing them with financial inclusion thus enabling upward social mobility. The revised mission statement closely intertwines with the newly established non-financial reporting practice as well as the launch of several social and ESG initiatives that will reflect in our product performance as well.”

 

Maris Kreics, CFO of Mogo Finance:The Q1 results of 2021, with almost than 50% higher year-over-year revenue and nearly three times higher comprehensive income before forex, provide a conclusive proof that the actions taken during 2020, with a bolt-on acquisitions among them, paid off. Our forex situation during the first quarter of 2021 remained contained without major adverse or overly positive effects. This can be attributed to both our hedging strategy as well as decreased exposure to volatile currencies.

Over the course of the last quarter, the Group’s portfolio quality slowly but constantly improved. Still, in its underwriting policy, the Group remained more conservative than before March 2020; however, the company started to relax some underwriting policy guidelines. These relaxations were performed in the countries where the macroeconomic climate is stable, and the portfolio quality exceptionally good.

We are also positive regarding our prospects with regard to our Eurobonds refinancing. To that end, we have been deploying certain amounts of capital towards Eurobonds repurchases over the last several months, and we have been increasingly focused on the simplification of our balance sheet, including decreasing receivables for Longo sales transaction, divesting selected markets, and the like. Our positive outlook towards the prospective Eurobond refinancing has been further strengthened by the excellent reception of our Latvian bond refinance that took place during the first quarter, with more than 600 new investors joining our community.”

   

The full unaudited report for the nine months ended 31 March 2021 is available under: https://mogo.finance/investment/results-and-reports/

   

Conference Call:

A conference call in English with the Group's management team to discuss these results is scheduled for 18 May 2021 at 15:00 CET.

Please register http://emea.directeventreg.com/registration/7055899

 

Contact:

Mogo Finance

Maris Kreics, Chief Financial Officer (CFO)

Email: maris.kreics@mogofinance.com

About Mogo Finance:

Mogo Finance Group is international and fast-growing Financial Technology company with vast reach across the globe. Mogo Finance Group, keeping car financing business as predominant, also utilizes consumer financing in selective markets. Recognizing the niche underserved by traditional lenders, Mogo Finance provides financial inclusion and disruptively changes the used car and consumer financing industry across its countries. Up to date the Company has issued over EUR 650 million secured loans and running a net loan and used car rent portfolio of over EUR 200 million. Established in 2012, with headquarters in Riga, Latvia, Mogo Finance operates in 14 countries in the Baltics, Central, Eastern and South-Eastern Europe, the Caucasus, Central Asia, and Eastern Africa.

www.mogofinance.com

 

IMPORTANT INFORMATION

The information contained herein is not for release, publication, or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or any other countries or otherwise in such circumstances in which the release, publication or distribution would be unlawful. The information contained herein does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. Persons into whose possession this announcement may come are required to inform themselves of and observe all such restrictions.

This announcement does not constitute an offer of securities for sale in the United States. The bonds have not been and will not be registered under the Securities Act or under the applicable securities laws of any state of the United States and may not be offered or sold, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

This announcement does not constitute a prospectus for the purposes of Directive 2003/71/EC, as amended (the "Prospectus Directive") and does not constitute a public offer of securities in any member state of the European Economic Area (the "EEA").

This announcement does not constitute an offer of bonds to the public in the United Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the bonds. Accordingly, this announcement is not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of this announcement as a financial promotion may only be distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons in (i), (ii) and (iii) above together being referred to as "Relevant Persons"). Any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this announcement or any of its contents.

PROFESSIONAL INVESTORS ONLY – Manufacturer target market (MIFID II product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs key information document (KID) has been prepared as the bonds do not constitute packaged products and will be offered to eligible counterparties and professional clients only.

 

[1] A Premium car financing solution created through a strategic partnership with a local bank, which allows to achieve a combination of bank-level product pricing with FinTech speed, exceptional customer service, automation, and flexibility. Primero Finance is bridging the gap between conventional banking/leasing sector and subprime consumer financing.

 

   


Eleving_Group_Report_Q1_2021_ENG FINAL.pdf