ARM Firm Intrum Justitia Reports Decline in Earnings and Revenue

Intrum Justitia, one of the largest accounts receivable management firms in Europe, said Monday that net earnings for the second quarter of 2010 dropped 19 percent led by a decline in revenue of 12.2 percent.

The Sweden-based debt purchasing and collection agency said that net earnings declined from $14.4 million in the second quarter of 2009 to $11.6 million in Q2 2010. Operating earnings increased 13.9 percent in the quarter to $24.6 million. Intrum partially blamed the wind-down of operations in Scotland for the decline in net earnings.

Revenues for the group also declined in the second quarter, falling 12.2 percent to $125.6 million. Currency exchange caused a 7.4 percent decline in revenues, according to the company.

Intrum said that its debt collection unit, called Credit Management, accounted for $111.1 million in revenues in the second quarter of 2010, a decline of 9.5 percent. The Purchased Debt unit accounted for $27.5 million in revenues, down 18.9 percent from the prior year period. In the second quarter, Intrum spent $27 million on debt portfolio purchases compared to $50.3 million a year ago. The company also noted that it had made an initial investment in purchased portfolios in Russia during the quarter.

“Intrum Justitia continues to develop well in 2010 despite the economies of Europe still being subdued by slow macroeconomic recovery,” said Intrum President and CEO Lars Wollung.

At the company’s presentation of results to investors, Wollung also discussed the possibility of strategic acquisitions for the firm’s ARM offerings.

“It can be expected that we will make acquisitions in the future. If this will happen in the second half of the year or later, I would not like to comment on," he said. Wollung repeated that Intrum Justitia is interested to take over both big portfolios of receivables as well as companies.