KRUK Spólka Akcyjna

For 6M 2026, the company reported PLN 555 million of net profit, with no growth versus 6M last year. Cash EBITDA increased 8%, recoveries grew 5%, assets grew 12%, and leverage was 2.6x. Management said revenue was affected by the depreciation of the Romanian currency, costing roughly PLN 50 million in revenue, and financial costs fell because hedging produced a gain of about PLN 53 million. For investments, the company secured PLN 864 million in 1H and reiterated a full-year deployment target of PLN 2.5 billion. Management also said full-year gross IRRs should remain around the 20s, similar to 2025 but perhaps slightly lower.

Management described the first half as solid but not quite as strong as hoped, saying the business should see better results in the second half. The CEO/lead executive emphasized disciplined investing, saying the company would not compromise on IRRs even in competitive markets like Poland and Romania. He also pointed to healthy asset growth, stronger cash generation, and progress on the IT replacement and future AIF reorganization as evidence the company is positioning for continued growth over the next several years.

The financial commentary focused on the gap between reported profit and cash generation, with cash EBITDA up 8% and cash flow generation described as very strong, supported by almost PLN 0.4 billion of cash. Management said financial costs declined thanks to hedging, which generated about PLN 53 million in gains over 6M 2026, while legal costs were lower due to the normal portfolio life cycle. Leverage remained contained at 2.6x, and management said the business is well capitalized with good access to debt and capacity to increase leverage if needed.

In Q&A, analysts asked whether the company can maintain near-20% IRRs on 1H 2026 debt purchases; management replied full-year IRRs should be similar to 2025, perhaps somewhat lower, but still around the 20s and not materially below that. Another question asked why recoveries are growing more slowly than carrying value, and management said assets now have long recovery curves, with cash flow breakeven around 6 years and recoveries spread over about 20 years, while competition has pushed purchase prices higher. Management also clarified that the difference between accounting EBITDA and cash EBITDA comes from revenue recognition: accounting revenue is net of purchase price, so cash EBITDA better reflects operating cash flow.