(In the announcement sent at 7:40 am, the first sentence of the last paragraph correctly states that Grenke expects new business in the third quarter to be about 70 (NOT: 60) percent year-on-year. The company has corrected its information accordingly. It follows the corrected version of the message.)
Grenke sees signs of business recovery
FRANKFURT (Dow Jones) – Although the leasing provider Grenke saw a slump in profits in the second quarter, it sees the first signs of a recovery in its own business. The Group’s new business declined by 34 percent to EUR 598.1 million in the quarter, but according to Grenke it was stronger in June and thus at the end of the second quarter than at the beginning of the quarter. On the sales side, the interest result rose by 8.8 percent to 98.0 million euros, as Grenke announced.
In July new business was now 70 percent in the same month of the previous year, higher than in June at 55 percent. Grenke conceded, however, that the company could not assess whether and how quickly business would continue to move upwards.
The Group’s claims settlement and risk provisioning increased to EUR 62.2 million in the second quarter from EUR 50.8 million in the first quarter. These expenses caused the profit for the period to fall by 59 percent to EUR 14.2 million.
For the third quarter, Grenke expects new business to be around 70 percent of the previous year’s level. However, further developments will remain dependent on the pandemic in 2020. At the beginning of the year, growth of between 14 and 18 percent was initially announced for new business. Grenke is able to work profitably even in the crisis. However, the profit will be below the level that was announced at the beginning of the year in a target corridor of 153 to 165 million euros.
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(END) Dow Jones Newswires
July 30, 2020 03:54 ET (07:54 GMT)
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