DLL, a global provider of asset-based financial solutions, reported a net profit of €180m ($206m) for full-year 2020.
Despite the difficult economic environment and softening business demand, the company grew its portfolio to €34.9bn ($42.9bn), an increase of 2% when excluding currency movements.
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This was achieved under challenging market conditions and supported by broad diversification across multiple industry sectors and more than 30 countries.
Bill Stephenson, chief executive and chairman of the executive board, said: “This past year was unprecedented, and both our business model and global workforce displayed amazing adaptability and resilience.
“It was reassuring to see that our underlying financial performance remained solid and allowed us to maintain our strong presence in the market. I am proud of our efforts to support our customers and help them overcome so much adversity during this crisis year.”
Despite the significant impact the pandemic had on credit impairments, the company reported net income of €1.5bn ($1.7bn), which represented almost 6 per cent growth over the prior year.
Marc Dierckx, chief finance officer and member of the executive board, said: “We remain comfortable with the overall quality of the portfolio and the long-term outlook on performance.”
Impairments
On a year-on-year basis, impairments almost doubled to €409m ($467m), representing 121 basis points of the average portfolio.
“The economic hardships brought on by the pandemic limited the ability of some customers to service their debt,” Dierckx said.
“However, the resilience of our business model, coupled with our strong capitalisation, allowed us to successfully navigate through this period of uncertainty and deliver a net profit,” he added.
Of further note, a significant driver of the increased impairments were IFRS-9 (Stage 1 and Stage 2) impairments, which are heavily influenced by the macro-economic outlooks in the markets where DLL operates and by key indices such as unemployment.
IFRS-9 (Stage 1 and Stage 2) impairments were €190m ($217m), which was nearly four times higher than 2019 (€49m) and represented almost half of total impairments in 2020.
Outlook
“With the start of vaccine distribution in many countries, our focus now shifts to adapting to the ‘new normal’ and the promise of a return to better times,” said Stephenson.
“Even as we look ahead with optimism, we will reflect on our experiences of the past year, ensuring that DLL emerges from the pandemic as an even stronger and more agile company for our customers and our global workforce.”
“The strength of our business model and strategy were significantly tested and validated again,” added Stephenson.
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